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Cost transparency initiatives

A piece in the McKinsey Quarterly, 2005, No. 4 at 9 explains that some IT managers, striving to have executives understand and accept the costs of technology, roll out “cost transparency programs.” I don’t know what that phrase means, but that hardly deters me from translating it to law departments, who also need executives to grasp the expensiveness of and need for outside counsel.

Rather than beat one’s head against the wall of budget cut backs, shine light into the black box of outside counsel costs – expose the numbers, educate the pockets. Publish the amounts spent by firm, by practice area, by business or staff unit – and show trend data on all of them if possible. Calculate blended billing rates for your key firms, and show the discounts you have gotten from standard rates.

As Sy Syms says, “an educated consumer is our best consumer.”

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