Four ways to reduce the budget Gap – plans, smaller firms, contract lawyers and offshoring

Michelle Banks, the general counsel of The Gap Inc. summarized at a recent panel four cost-management steps she has taken lately. I quote from the ACC Docket, Vol. 30, Dec. 2008 at 27.

The Gap is “asking its outside firms to provide staffing plans and budgets and increasingly holding them to it.” To aim at law firm minds and money is powerful if combined with some discipline (See my post of July 17, 2008: core team II with 11 references and citations to 7 earlier;
Aug. 8, 2006: core staff with 6 references; and
May 21, 2007: matter budgets with 9 references.).
I wish she had offered more detail on how she holds the firms to either staff plans or budgets.

Banks next mentions her version of the Manhattan Project (See my post of Aug. 24, 2006: origin of Manhattan Project with GE’s law department.), the abandonment of large firms and their replacement by mid-size or smaller firms. Her stronger point, even, is that the Gap tries to be more selective about whether to use any law firm at all.

As a third step, Banks states that her law department will now “use contract attorneys on an increasing basis (See my post of July 17, 2008: contract lawyers with 12 references.). Interestingly, she explicitly acknowledges that contract lawyers are a workaround when she is constrained by headcount.

As the fourth measure to control costs, Banks says “we’ve also outsourced some of our work to India, which is growing in popularity.” She probably means that she hears of more and more of her peers looking across the oceans for lower-cost services.

For more on each of these methods, see my blook on outside counsel management.

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