When you can't spend more, spend wisely. This was a view shared by a number of GCs at the recent Economist GC Summit in New York. With signs of economic slowdown and possible recession looming, it's likely most in-house legal teams will be looking for ways to stretch their legal dollars further. But where do you start?
One recommendation was to look at the split between inside and outside legal spend. For most companies, this spend is skewed roughly 60:40 towards outside spend. Several GCs argued that, by flipping this ratio and spending the majority of their budget on in-house resources, the overall value to the business of each legal dollar goes up. This aligns with the idea that in-house lawyers can, and should, learn and get close to the business, so that they have a deeper understanding of how to help the business anticipate and navigate legal and regulatory risks. Building connections between legal and the business should be easier for in-house teams than for outside counsel (although it's a good idea for both).
Another smart move is automation. By allocating resources to process improvement and technology, some legal tasks can be shifted into business-self-service, and other tasks can be done more efficiently by the in-house legal team. Why waste precious lawyer time drafting routine NDAs or reading through 10,000 contracts when there's technology out there to handle these tasks at a fraction of the cost?
So, as you plan next year's legal budget, why not make the 60:40 flip? That is, flip to 60:40 majority in-house legal spend, and boost legal's value-add in the process.