Law department cost management programmes are becoming more sophisticated in light of ongoing financial pressures, according to new research from Huron Consulting. Over half of the law departments surveyed (57 per cent) reported using market data and analytics to drive decision-making, most commonly to inform decisions about outside counsel fee arrangements and rate negotiations (41 per cent).

 Best practices lead to lower spending

According to law department respondents, those that employ best practices related to financial and outside counsel management had 48 per cent lower external legal spending as a percentage of company revenue than those without similar comprehensive programmes. Some of those best practices reflected in the survey responses include the following:

• Matter management and e-billing technology
• Detailed matter level budgets
• Alternative fee arrangements
• Evaluation of outside counsel adherence to billing guidelines
• Defined panels/pre-approved lists for sourcing

No increase in legal spend

Of the respondents, 43 per cent indicated that legal spend is expected to be the same as last year, and of entities with over $10 billion in revenue, 40 per cent indicated that they expect their legal spend to decrease in 2015. 'This year’s survey results confirm what we are seeing in the market – law departments continue to evolve in efficiency and value delivery,' said Bret Baccus, senior director, Huron Legal. 'As cost management programmes become more comprehensive, companies realise their opportunities for considerable savings, which can ultimately help provide increased value to the broader business.'