Is Cost Control Really a General Counsel Priority?
The gap between what general counsels say and do about controlling outside counsel cost continues. At least that’s my take reading the Corporate Counsel magazine’s Best Legal Department 2009 issue.
Best Legal Department — 2009 has three feature-length stories about the 2009 winner (The Hartford) and two runners-up (Exelon and IBM).
In the Editor’s Note, Anthony Paonita writes
“All of our winning legal departments are under even more pressure than usual to cut costs, both internally and in their outside spending. Our finalists all said that they’re doing more in-house, and that they’re starting to make firms think differently when it comes to fees and staffing. We may be at just the start of a fundamental transformation in legal services.”
I don’t see how the articles support that conclusion. In fact, cost control discussion seems buried. Allow me to quantify: of approximately 7,200 words in the three feature articles, only 409 relate to cost control – less than 6%. (To count, I copied text to a word processor and used a permissive standard for text about cost control.)
If cost control were really tops on the agenda, I would think it would warrant a larger share of the discussion. Moreover, the cost measures described by and large are not inspiring.
The Hartford gets discounts “on all the work one law firm does for it by agreeing to allow star associates to handle some appeals.” Other measures: “In-house lawyers actively direct all facets of cases… and are responsible for ensuring that the company receives ‘the best possible representation for the least possible cost.” The Hartford also insists “that a firm use contract lawyers on document reviews.” Useful? Yes. Transformational? No.
The most intriguing cost control measure gets one sentence in the article on IBM, which “is in the process of creating a ‘back-office hub’ of recent law graduates who do lower-level work.”
I am in no way commenting on the winning departments. Rather, my comments illustrate only another example of a public proclamation of the importance of cost control that is not backed up by clearly demonstrated and quantified action.
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