Companies regularly measure their performance against competitors and well-established benchmarks. Management scrutinizes corporate spending in order to maximize the efficiency and effectiveness of resources.
But, a review of expenses related to legal services is often overlooked. After reviewing the legal practices of several large law firms and in-house counsel of Fortune 500 companies, I have compiled this summary of recommendations to consider how to optimize the performance of legal services and the related workflow. A review of legal operations can provide ample opportunity to dramatically improve the efficiency and effectiveness of legal representation.
The structure of reviewing legal counsel may vary from organization to organization. However, there are several key attributes every examiner should assess. The team should determine whether the legal department is well organized and staffed. There should be objective measures in place. Additionally, companies should articulate and document best practices and related standards. Legal measures should include specific targets related to performance. In many cases, it is prudent to deploy data analytics as part of the process. A review of departmental policies and practices is also a part of the evaluation of overall governance.
Consider starting with the mission statement of the legal department and established goals. Examine how the department measures success. The objective is to ensure the organization and the lawyers representing the organization share a common vision.
Additionally, in most cases, legal costs and expenses can be substantially mitigated by using creative methods for controlling billing. It is prudent to have budgets in place and periodically compare actual costs to those established budgets.
In summary, legal counsel is a critical function that can help ensure the success of an organization. It is important to have a well defined legal structure and process to ensure resources allocated for legal services are well spent.
James Scott Fargason is a professor in the Flores MBA Program at Louisiana State University and author of Legal Services: Auditing the Process for the IIA Research Foundation.
