Key to law firm cost control is “staffing patterns and risk/reward decisions” (Citigroup)

The General Counsel of Citigroup, Michael Helfer, is on record that his law department “gets discounts from virtually all our law firms. We provide various incentives for higher discounts although we will not agree to provide a firm with a certain amount of business in return for a certain level of discount.” Fairly standard stuff, until Helfer continued (Nat. Law Journal, Aug. 2005, Supplement at 10):

“I believe the real action is not in rates and discounts … but in staffing patterns and risk/reward decisions.” Bravo!

Helfer appreciates that law firms will leave no stone unturned, using platoons of staff and driving fees sky-high; to win. Only inside counsel can say, “the reward – benefit to this company of reducing liability – is not large enough for the risk – your squadrons of staff and their spiraling fees.” Firms see only one case, whereas the law department oversees a portfolio of cases and wants to minimize overall spend. Helfer is spot on.

Citigroup classifies some subset of its cases as major cases. It assigns individual lawyers to those cases and gives them a software system to help them manage in light of fees and exposure. Very progressive.

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