Law Department Management Blog
General counsel read and hear that they can reduce their spending by plunging into all kinds of techniques. True, at least to some extent, but some of the claimed savings are grossly exaggerated. I have collected a startling range of savings estimates or claimed actual amounts from more than 18 techniques. My wish is that we had cool-headed appraisals and reliable metrics for the financial results from all of them.
The 27 posts are in alphabetical order by quantified cost-saving technique (See my post of Jan. 13, 2006: in the average case, ADR reduced about six months of litigation time, saved about $10,000 per case in litigation costs, and achieved better settlements; Jan. 14, 2007 #3: savings of 10-35% from use of auctions; March 4, 2007: on average “companies save 30 percent to 50 percent by using contract attorneys and paralegals instead of sending the same work to a law firm”; Aug. 5, 2005: savings of 20% from budgets; May 24, 2007: ‘the insurer is saving an eye-popping $1 million over two years on continuing legal education classes”; Aug. 5, 2008: savings from convergence at GE and from ECA; Aug. 3, 2005: convergence saved Merrill Lynch in 2004 more than $16 million; Sept. 14, 2005: early case assessment yields 20 percent cost savings; March 15, 2006: savings from ECA by DuPont; May 14, 2005: vendor claimed “typical savings” from electronic invoice processing: “2-5% of total invoiced initially, 8-10% after tuning”; Nov. 3, 2005: Microsoft saves 2-3% a year on legal costs because of e-billing; Aug. 5, 2005: share discovery costs with other parties, and “savings typically range from 40% to 60%”; May 9, 2007: Pitney Bowes estimated “the company saves up to 15% on fixed-fee matters”; Jan. 30, 2006: hire former employees for litigation support – a department saved $1.5 million in legal expenses; Jan. 23, 2006: insource work and, for example, pocket $200,000 a year in outside counsel costs on EEOC-related matters “by training HR staff in how to investigate and respond to employment-related complaints”; Jan. 16, 2006: Honeywell’s “spending on legal services had fallen by at least 25 percent as a result of using” a legal research firm; March 23, 2007: litigation support vendors, and a law department that claimed “a 50 percent reduction in data processing charges and a 70 percent reduction in hosting charges.”; Aug. 5, 2005: return on matter management systems; April 13, 2007: average savings from matter management systems; Nov. 27, 2007: “cost savings of about 30 to 40% can be achieved through Israel offshoring and about 50 to 60% in Asia”; Jan. 3, 2006: GC saved his previous employer “hundreds of thousands of dollars a year by hiring experienced paralegals”; Nov. 13, 2005: Dow audit and pruning of patents saved $40 million; Nov. 24, 2005: Cisco built its own storage array and other litigation support and “reduce[d] our costs of discovery by approximately 97 percent” and “the expense of outside legal review by 30 percent”; May 8, 2007: with Ford’s policy to go to trial “the business decision to litigate means that settlements are usually 20-50 percent lower than they would be if they paid plaintiffs’ lowest demands.”).
I would appreciate it if you would send me any data on other savings projections or findings (See my post of Aug. 21, 2008: other comments on techniques and savings.).