June 29, 2021

Helping in-house lawyers reduce litigation spend

CCL consultant Aidan Parsons examines the perennial challenges faced by in-house legal teams to do more with less and looks at litigation management as one area where they could realise cost and time efficiencies - with a number of options available to them.

The internet is awash with articles discussing the pressure on in-house lawyers to do more with less. The solution, according to the authors, is generally neatly packaged up in the service offering of the firm or company that the writer happens to represent. Unfortunately, there are not many articles that give in-house lawyers actionable steps that will have a material impact on their workload.

The good news is that, with a few small changes, most legal teams can free up a lot of time to focus on the matters that will deliver the most value for the business. This can be achieved in a number of ways, from excluding low risk, low value work from the legal review pile, to pushing work back into the areas of the business better equipped to deal with it.

A review of the workload of almost all in-house teams will invariably show that the legal department has somehow assumed responsibility for work that does not require any legal input. To make matters worse, many are so busy trying to keep their heads above water that they don’t have time to stop and think about how they could work more efficiently and effectively.

One of the key areas in which in-house counsel can realise cost and time efficiencies is litigation management. However, for many in-house lawyers, contentious work is one of the first things that is outsourced to a law firm. There are various advantages to this approach, risk mitigation not least among them, but there is also a downside for legal teams that are already stretching their budget to the limit.

Many in-house lawyers are from a corporate or commercial background and, as such, contentious matters can be unfamiliar and challenging. This often leads to in-house counsel electing to brief the whole management of a dispute to external counsel and ceding control of the strategy and budget to a law firm, whilst the in-house team are relegated to an administrative role. Costs can rack up quickly, pressure mounts on the in-house team and matters drag on for far longer than necessary.

But it doesn’t need to be this way. The traditional approach to dispute management- in-house team instructs law firm, law firm instructs barrister- is just one method of conducting litigation, and rarely will it be the most cost-effective or commercial approach.

1. Engage an expert

A lot of organisations will not require a full-time litigation counsel, but many would benefit from having the option to bring in an experienced litigator to provide strategic input and guide the other lawyers in the team through the process when litigation does arise.

The first port of call for many companies involved in litigation is often to engage a law firm, but this should not necessarily be the default course of action. Engaging a litigation specialist through a flexible legal resourcing company or briefing a barrister directly will ensure that the company has access to the relevant experts at an early stage, without involving a law firm. If the matter is of sufficient size or complexity to require the resources of a law firm, an experienced in-house lawyer or barrister will be able to assist in managing the firm and negotiating an appropriate fee structure for the dispute.

2. Turn to tech

Another key consideration for in-house legal teams engaged in litigation or complex investigation work is the management of the discovery process. Document review typically accounts for up to 70% of the costs of the matter, and therefore any savings and efficiencies that can be realised at this stage will make a significant impact on the overall cost.

Traditionally, this process is managed almost entirely by law firms, whose approach tends to be to throw bodies at the problem. Most lawyers cut their teeth on such exercises, meaning in-house teams are often paying premium rates for junior lawyers who have little or no litigation experience to justify the price tag.

Nowadays, advances in eDiscovery software and analytics technology mean that in-house legal teams can dramatically reduce the number of documents to be reviewed before sending them to their external advisors. It is not uncommon to reduce data volumes by 50% or more using targeted search terms, de-duplication tools and email threading software, meaning that matters that at first appear too big to handle internally can be dealt with by in-house resources. Data analytics tools also make it easier to find key documents, which may completely alter the litigation strategy or convince an organisation not to pursue the matter at all. Having this sort of insight can provide significant commercial benefits and puts companies one step ahead in the litigation process.

3. Horses for courses

In order to reduce litigation spend, or any aspect of legal expenditure for that matter, it is important to break a project down into its constituent parts and decide how best to manage the different elements. Many of the aspects of a dispute that are normally managed by lawyers do not necessarily need to be and bringing in team members with a different skill set can often lead to efficiencies and savings.

The IT team within a company will play an integral part in any dispute, as they are often those best placed to identify and access relevant data, which will ensure the legal team can progress the matter quickly.

From a document review perspective, engaging a team of paralegals or a legal process outsourcing company to work at the direction of the in-house team or law firm will usually be more cost-effective than using law firm paralegals or junior lawyers for the review. The targeted use of technology can amplify these cost savings still further.

Whilst the prospect of managing any kind of dispute can strike terror into the hearts of in-house counsel, outsourcing litigation work in its entirety represents a lost opportunity for corporate legal teams looking to reduce their external spend. With the right guidance, litigation can be managed in a commercial and cost-effective manner, whilst also expanding the professional experience of the lawyers in the in-house team.

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