5 ways CFOs can save costs on legal services - by Yvonne Wakefield
As budgets are reviewed and department heads pressed to justify their spend, Heads of Legal or General Counsels (GCs*) shouldn’t be spared. Legal spend is one budgetary item that need not be as high as it often is. Discerning GCs have their ears to the ground and are aware of the increasing number of cost-saving tools and service providers specifically positioned to help them achieve their goals.
*This Expert Insight is written by Yvonne Wakefield, founding CEO of Caveat Legal. She says that the head of a company's in-house legal team is generally called Head of Legal in South Africa, but she expects the term GC to win ground in the future, as it already has done overseas.
CFO and their GCs should know that:
- There are non-law firm legal service providers, through which GCs can have access to legal professionals that have traditionally worked for the top law firms but are now independent. This includes access to legal experts at all levels of seniority and the charge will be as little as half the cost of their erstwhile firms.
- Legal service providers, and especially the more innovative ones, should be very light on their feet, allowing them flexibility to allocate tasks in the most cost-effective manner, to set up teams that are completely tailored to the expertise required by the particular brief, and to charge fees on a close value/cost ratio. When these providers are structured properly, these decisions are not influenced by billing targets or internal team dynamics.
- Legal service providers should be quizzed on the technologies that they use to streamline their work and keep their costs to a minimum.
- There are a range of technologies focused specifically at addressing the challenges that GCs face, for example document generation and management systems, that can move them towards a less paper-intensive and more automated and secure department.
- There are alternatives to hourly billing arrangements and dreaded runaway legal bills. Legal service providers, whether traditional firms or not, should be prepared to work on fixed-fee or capped-fee bases. It is now the norm, at both traditional firms and alternative legal service providers, for clients to request quotes for specific pieces of work.
The bottom line is that with the advent of innovation and technology, the cost of legal services is on a downward trend, and CFOs should be taking full advantage of the gains that can be made.