Taking More Work In-House

Given the state of the economy, it has been no surprise to find a host of recent articles concerning cost-cutting among corporate legal departments. Everything is on the table, including reductions in fees charged by outside counsel.

An Oct. 22 article (subscription) in Atlanta’s Fulton County Daily Report captured the ongoing discussion through quotes from several prominent GCs and legal department heads regarding various ways they are reducing costs. Almost every one of them mentioned “in-sourcing.” Robin H. Sangston, vice president and associate GC of Cox Communications Inc., offered a comment that many of the GCs echoed:

We have used a variety of approaches to controlling legal fees, including: bidding out 'commodity-type' work, moving work from higher-priced large firms to lower-priced smaller or boutique firms with lower overhead, using contract lawyers, implementing e-billing with our billing guidelines ... Given the state of the economy and the impact on almost all businesses, I would also expect that many companies will not entertain rate increases for next year.

The sum of it is that more and more work that would normally be the purview of outside counsel is being done in-house and costs are being reviewed closely; and the use of contract attorneys certainly fits well within this evolution. There are more flexible billing options and work arrangements and with the sheer number of talented attorneys leaving the traditional practice, the quality of the work performed is excellent.

What other measures are you taking today that you weren’t a year ago? Are these changes temporary or permanent in your department?

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Dan - October 25, 2008 10:46 PM

The sum of it is not that more work is going in house. The sum is that companies are being smarter all around in terms of deciding what to do with their legal work. From my perspective as a member of a boutique law firm, all I see is that companies are, as you say, "moving work from higher-priced large firms to lower-priced smaller or boutique firms with lower overhead."

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