Note: The following article was presented by Jim Loeffler at ALM’s Controlling Legal Costs Conference on 12/1/09 in New York City.
Look around other areas of your company, and you will find different approaches to budgeting – most of which are accurate and flexible enough to respond to changing circumstances. Budgeting for sales, production and other initiatives involve known quantities and variables with historical precedent: Accuracy has improved over time based on overall market or industry trends, evaluation of historical results and well-developed budget management workflows. Quite the opposite is true when it comes to legal matters.
A colleague recently asked me what middle market companies can do to streamline their internal legal function. By ”middle market”, I mean $1 - $5 billion companies, which typically spend about .5% of their sales on total legal costs. Generally, companies in this range have anywhere from 5 to 30 attorneys and assistants. Of course, these relationships will vary by industry and, for that matter, for each specific company. For those of you in this position, you’re in the driver’s seat. (Read More)
I participated in a panel discussion during Corporate Counsel’s Controlling Legal Costs conference last week. A colleague made the point that slashing costs with no holistic or cohesive plan may well do more harm than good. Carol Ann Petren is Executive Vice President and General Counsel for CIGNA, and she went on to point out that aggressive staffing cuts can increase outside counsel fees and expenses or result in higher liability exposure. I could not agree more. Focusing on cost minimization rather than performance optimization is a recipe for disaster. (Read More)
