A domestic financial services company was in the process of going through an enterprise-wide cost reduction initiative. The scope of the initiative included a review of outside counsel sourcing procedures and a targeted reduction in legal expenditures. The in-house team historically sourced work to a network of over 200 law firms based on geographic location, with few checks and balances to ensure the right work went to the right firm at the appropriate price point.
Our team was engaged by the General Counsel to reassess the law department’s sourcing strategy and identify cost savings opportunities. We analyzed $180 million of historic law firm invoice data to understand spend and staffing trends and assess alignment to industry standard billing practices. Our team identified opportunities to shift routine, lower risk work to a consolidated panel of regional counsel with negotiated volume discounts. To enable in-house counsel with data to support pricing discussions, our team developed negotiation packets including spend analysis dashboards, qualitative performance feedback on key matters and timekeepers, and alternative pricing structure examples.
Our analysis positioned the company to realize a 10% reduction in outside counsel spend, and provided an implementation blue print for developing more robust outside counsel management procedures, including adherence to best practice billing guidelines, implementation of volume discounts, use of detailed UTBMS billing task codes, and outsourcing of discovery tasks to lower-cost vendors.