5 ways in-house lawyers can control cost pressure
Cost Pressure: it might seem like an innocent enough term but, in my experience it’s one that belies long hours
It might seem like an innocent enough term but, in my experience it’s one that belies long hours, reduced family time and a negative impact on physical and mental health.
In fact, I think cost pressure is the corporate equivalent of politicians describing civilian casualties as “collateral damage”: a handy piece of jargon that dehumanises and legitimises the reality of what’s happening.
If you hear the term “Cost Pressure” being bandied about in your business, alarm bells should sound. But if you want a way to reduce cost pressure and gain greater control – here are 5 tactics I’ve noticed in-house legal teams use.
If you don’t ask you don’t get… simple as that.
With enough resources in place, your in-house team can spend time looking forward and thinking strategically, rather than just putting out the business’s fires.
You’re not going to get a bigger budget by holding your hand under your CFO’s nose, hoping they’ll understand all of this and just drop the money in. You need to be strategic. The way you frame the question and what information you have to support it, makes all the difference.
So start by working out how much you really need and what you want to do. Then build yourself a business case to back it up. (If you don’t know how to do this, learn it fast!)
So long as a CFO is involved, it will always come down to a numbers game. As a general rule, be prepared to prove how every extra dollar you’re given will save the business twice as much. Beyond that, do everything you can to show your commitment, even offering to tie in your KPIs – and your bonus – to support what you’re saying.
Technology can help you automate your workflows to reduce the number of people involved in any decision, as well as the number of decisions people need to make. It can also help you reduce the time people need to analyse information and reach a point of view, by putting everything that’s relevant in the one place (ie through a good document management or communication tool).
I’m not saying to run out and start subscribing to every new app just for the sake of it. Even ostensibly free technology will start costing you money if people become distracted by it or if it takes you in an unintended direction.
But there are now so many excellent apps that will help you streamline your processes and cost you virtually nothing – especially when you consider the amount of good they can bring to your business. So start asking your peers in other companies what they use and see how they could be rolled out in your group too.
Some of the apps I’ve seen used to good effect include:
o Trello – lets you keep track of both your professional and personal life.
o Dropbox – for sharing and keeping track of documents.
o Hipchat or Slack for communicating among the team and across the business.
o A decent intranet site for the business with FAQs. (OK. It’s old school, but it works.)
Another way to keep costs under control and leave a bit more room in your budget is to push some of the work you’ve been doing onto other people. Again, I’m not encouraging you to ask people outside of your legal team to start performing their own legal analysis. But they may be able to take some of the admin load off your desk and do their bit to help you become more efficient.
For instance, upskill your internal business customers so that they start using forms and templates that will streamline their instructions and reduce effort at both ends. You could also empower them to make decisions, especially where the risk is known and negligible.
Set boundaries – let them know when they should and shouldn’t come to you. Tell them it’s not ok to ask for legal advice in the lift or to call you and ask you to drop everything to sign a form or swear an affidavit. Ask them to schedule those kinds of ad hoc bits of work in.
Find the right balance between fulfilling key legal tasks and getting involved in broader – often non-legal – business matters. After all, as you start to be seen as more valuable across the business you’ll start getting more and more requests for your time (including the impromptu requests for advice I mentioned above).
Control the amount of work that hits your desk by setting thresholds, whether they’re monetary (empower people in the business to make their own call for decisions involving inconsequential amounts) or hierarchical (ie any work that comes to you first needs to pass through a senior manager). And divert any non-legal work to other people in the business.
Sending anything financial to your CFO is a good start. It may even give them a finer appreciation for the work you do. You could even start using your workflow software (see point 2. above) to automatically move non-legal decisions to someone else in the business.
Finally, one of the best ways around cost pressure is to start finding ways to get better bang for your buck from your external providers.
These days there’s no need to go to one traditional full service law firm for all your work. You can often get great legal advice cheaper and more efficiently through different means – whether that’s by bringing a team of senior lawyers in-house for a specific project, outsourcing some types of work to different specialist lawyers or having lawyers directly on call when you need them.
But to do this most effectively, you need to be willing to unbundle the legal support you receive. Work out what tasks are better performed in-house or by one of your current legal advisers, and what you could get someone else to do much cheaper.
Instead of taking all work to the same providers, look at how to maximise your spend. Be prepared to shop around too. In many businesses there’s often a ‘lazy tax’ built in, meaning they can charge a premium simply because they’re counting on you not going through the hassle of switching providers and building new relationships.
If you think that’s happening to you, don’t be afraid to ask for a discount. You’ll usually get one.
If you’re committed to getting overcoming cost-pressure, give Dovetail a call.
We’ll share with you what we’re seeing in the market and show you how you can access to the best freelance lawyers in a transparent and flexible manner.