Corporate legal departments (CLDs) must ensure they are spending their budgets wisely, and a large part of that is choosing the right law firms at the right cost. Looking ahead, the amount that CLDs spend on outside counsel will likely increase due to rising rates and increased matter volume. One way to keep costs under control while improving outcomes is to ensure early and ongoing collaboration and engagement with law firms. Open lines of communication make it easier to spot cost overruns and other inefficiencies, while also ensuring law departments select the right outside counsel in the first place.
Our new whitepaper, Four Keys to Better Legal Engagement, describes several non-negotiable components of a successful engagement process. They include:
- Establishing early and ongoing engagement between CLDs and outside counsel
- Setting pricing guidelines before commencing on a matter
- Supporting information sharing to ensure the matter stays on track
- Analyzing law firm performance for better future decision-making
Let’s take a closer look at the insights this new whitepaper contains.
360 degrees of collaboration
For law firm collaboration and engagement to be sufficient, it must begin before an agreement is signed and continue after the matter is closed. This “360 degrees of collaboration” approach includes four steps:
- Early engagement: Engagement must begin before a matter gets underway. It’s important to establish lines of communication early, particularly about goals, costs, and matter timeframes. Assessing a firm’s expertise, particularly about their rate, should happen pre-agreement before anything is signed. Early engagement also gives law firms a chance to tout any novel approaches, in addition to establishing parameters.
- Pricing guidelines: Similarly, legal departments should ask detailed questions about the estimated total cost for a given matter, in addition to the hourly rate and cost per phase. In 2024, law firm rates are expected to increase by an average of 7%. One way to ensure money is not being left on the table is to have a competitive bidding process, particularly for large matters. Comparing matters point-by-point can assist in negotiations and offer a clearer picture of the approach different law firms will take.
- Information sharing: While transparency is important before an agreement is signed, it must continue through the entire matter lifecycle. Having and sharing the right data points on an ongoing basis is a crucial component of successful engagement. Easy-to-find dashboards and automatic enforcement of billing guidelines can make transparency both easy and actionable.
- Analysis: Having data on the matter is also important for an analysis after the fact. Comparing the initial timeframe and budget to the actual length and cost of the matter, rating the law firm, and analyzing staffing can all help inform future law firm selection. Without this step, the full cycle of engagement is not complete.
By implementing processes that support 360 degrees of collaboration, law departments can ensure engagement is embedded into their interactions with law firms at every turn. By doing so, they can improve the quality and cost-effectiveness of the work.
For a deep dive into these best practices, download the whitepaper today.
