Legal services can be expensive, and the fees associated with even relatively small matters can quickly add up. Moreover, legal expenses can be difficult to predict, as matters can unexpectedly become more complex and require more time and attention than you anticipated.
Legal spend management involves controlling legal fees through a careful assessment of cost, risk, and resources. Cost should be evaluated by matter as well as service provider. It is obviously best to save expensive, highly specialized attorneys for high-stakes matters, and to save more routine matters for lower-priced options. But deciding what constitutes “routine” legal work is not always clear, and a lawyer’s efficiency must be considered alongside his or her rate when considering overall cost. A more expensive but experienced attorney who can complete a given matter in a shorter amount of time may end up costing less.
Risk can also be difficult to assess. If your business repeatedly does the same type of transaction or has particular expertise in handling a certain type of deal, then you may consider the related legal issues relatively low-risk because you know what pitfalls to avoid without the extensive involvement of an outside lawyer. However, if your business finds itself in unfamiliar territory, then even seemingly innocuous matters can have serious consequences if not properly handled. In this scenario it’s best to hire a competent lawyer to help you determine the “unknown unknowns” related to the issue.
Resource assessment means taking inventory of all the people who can help with legal work – lawyers and non-attorney staff, both in-house and outside – and determining which work should be allocated to which personnel based on their skills and experience.