Restructuring In-House Counsel's Utilization of Law Firms: Reducing Legal Spend without Increasing Risk

Mark Besser, Chief Technology Office, Qualitas Knowledge Management, USA

Traditional assumptions underpinning the outsourcing of all aspects of cases to law firms by in-house counsel should be revisited in view of recent seismic changes in the legal environment. Law firms are no longer presumptively the best qualified or cost-efficient sources to perform many tasks, particularly in the document-related area. The exponential growth of content created by emails and other forms of electronic data has caused document-related activities to be the predominant category of overall legal spend, approximately 70%. Law firms routinely outsource these low-level tasks to third-party vendors and charge a large mark-up for doing so. They also make critical and costly decisions regarding legal technology and also outsource the work. This begs a litany of questions: should in-house counsel restructure the way they utilize law firms? If so, can they take on internal supervision of many of those tasks assigned to law firms that the firms outsource? Can this restructuring be effected without overburdening internal resources and creating additional risk? This article examines those questions and concludes that by restructuring their utilization of law firms, in-house counsel can reduce legal spend as much as 30% without increasing risk.

Qualitas offers law firms and legal departments dramatically lower risks and lower costs of managing legal-based activities. The legal industry is experiencing significant challenges caused by the explosion of documents and email, regulatory changes, the geographic dispersion of work centres, and rising costs. These conditions are of concern to every industry today….calling for a continual search for improved management of legal processes. They also concern many departments within an organization that must participate in responding to corporate-wide events, such as subpoenas for documents or the management of contracts (where the Office of General Counsel often has responsibility for only a fraction of a company’s active agreements).