When Altman Weil reported that 67% of the law firms it surveyed were losing business to corporate law departments in-sourcing legal work, it reflected the beginning of an enduring trend. That development continues still, with strategic legal project planning fueling its expansion. From cybersecurity to compliance and case management to litigation support, corporate legal teams are creating a new blueprint for operating in a dynamic interdisciplinary environment both inside and outside of their organizations. By leveraging technology to benchmark, forecast, budget, and score performance, they have been able to take greater ownership of their transactions, dockets, and administration through effective legal project management.
For most companies, the plan begins with a focus on the overall vision for success and an effort to align objectives with tactics. Just as corporations no longer simply measure productivity by financial results alone, their law departments take a more holistic look at how their efforts help execute on the company’s mission. In fact, according to Consilio’s 2016 Law Department Benchmarking Report, the most common in-house initiatives for 2017 include an emphasis on a disciplined approach to spending, measuring performance, and implementing tools to manage information more effectively. Corporate counsel are proactively comparing their efforts to their peers and the industry at large while embracing legal project management and planning tools to enhance efficiency, increase cost control, and improve communication to key stakeholders.
They are building on that foundation by renewing their emphasis on budgeting to empower predictability in legal operations. Those teams that properly execute this element of their planning can report costs more accurately, which allows them to consider a wider variety of options and evaluate potential risks. Such conclusions also strengthen decision making both within the legal department and among peers in IT or Information CyberSecurity.
The influence of budgeting on in-house teams was apparent from the program covered at the 2016 Association of Corporate Counsel Annual Meeting, where presentations ranging from understanding financial statements and improving employee training, to managing a trademark portfolio and running a law department, referenced its impact. Most importantly, these topics share a common theme of proactive planning, which is being widely adopted among corporate legal teams.
Of course, the most significant benefit of budgeting is often predictability, which is a hallmark of legal project management. Those familiar with the cost of a given matter can generally provide guidance on the value of a particular strategy, the efficiency of a prior staffing model, or the benefits of implementing certain technology. In this case, past performance can often provide insight on future results.
Ultimately, benchmarking helps legal teams incorporate best practices, support continuous improvement, and apply organic information sharing to gain a competitive edge. When combined with thoughtful budgeting, which yields greater predictability and more collaborative decision-making, law departments can establish metrics to track and analyze their performance. This helps improve their relationship with a diverse cross-section of leaders within their organization, and more effectively engage with outside counsel or service providers. The breadth of what sophisticated teams are tracking is extensive. The HBR Consulting 2016 Law Department Survey, for example, highlights metrics ranging from staffing and cost allocation to alternative fee arrangements and intellectual property statistics. Metrics have become a critical element to measure law department operation success. Ongoing legal project planning using these metrics yields a far greater chance for success.
The unbundling of legal services to find best-in-breed firms and partners, rather than a single entity to serve as the central administrator. The expansion of responsibility to manage a wider array of tasks is transforming corporate legal departments to be more efficient. In fact, the data seems to be supporting that shift with the 2017 Report on the State of the Legal Market, published by the Center for the Study of the Legal Profession and Thomson Reuters’ Peer Monitor, which highlights that only 10 to 20 percent of law firm revenues are the result of traditional non-discounted billable hours.
It is, therefore, imperative that legal teams leverage technology that improves dynamic project planning and management to help them address existing and prospective challenges related to this transformation while maintaining forward momentum in all of their matters throughout the coming year.
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