I'm sure you've probably all heard the oft quoted Shakespeare line from Henry VI: "The first thing we do, let's kill all the lawyers". In my view, this is not such a bad idea if you interpret it metaphorically. After all, legal spend in many companies goes unmanaged and is way out of control. In addition, you might be paying $500, $600, $700 or more an hour to firms that take that money and channel part of it into campaign contributions to political candidates who want to make it easier to sue organizations like yours for product liability and related matters (in often unwarranted cases). It's a strange twist of irony, isn't it? (I say this as the step-son of a top notch Philadelphia litigator at a big name firm, knowing full well where campaign contributions from individuals like him typically go.)
In any event, it's my view that pursuing legal spend is not only a great way to reduce costs, it's also a moral responsibility given how much legal fees have escalated in the past decade (even before factoring in what lawyers do with their profits to keep buttering their bread). For this reason, I'll be introducing a new Spend Matters contributor later today who is an expert at legal cost reduction. He is an independent consultant and blogger who has written more about the subject than anyone else I know. And he's the first true category expert in an indirect spend area that will be contributing to Spend Matters on a regular basis. While I'd never support killing lawyers as Shakespeare suggests in partial jest, I'm a big fan of killing their profits -- and saving our companies millions of dollars in the process.
But pursuing legal spend is not as simple as negotiating better hourly rates with firms. It requires managing internal stakeholder expectations, dissecting the category in full and allocating different sub-elements into the proper buckets, understanding strategic vs. non-strategic spend, evaluating on-shore and off-shore options in certain areas, balancing in-house vs. external counsel, considering fixed-fee vs. hourly vs. incentive/gain-share arrangements and automating back-office elements of the corporate legal function -- to mention but a few of the areas that legal Spend Management requires. In other words, legal Spend Management is extremely complicated relative to other categories. And that's why I'm bringing an expert onboard to start a discussion about it. Stay tuned!