3 ways legal departments are cutting costs
The Australian Financial Review (subscription required) reports that a growing number of Australian companies are slashing “their legal spending to offset budget constraints and falling profits.”
And how are they going about it?
- Different firms/offices Telstra has moved some work to mid-tier firms and the cheaper offices (Adelaide, Brisbane and Canberra) of larger firms. And George Weston Foods is planning to give “lower risk, routine work” to smaller firms.
- Alternative fees For Ramsay Health Care, firms wedded to the billable hour will lose work to firms more “financially accountable to their clients.” GC, John O’Grady, explains that hourly billing “does not encourage excellence, strategic thinking or ingenuity.” Telstra has also implemented fee arrangements “not based on hourly rates” for some work.
- New legal panels Ramsey Health Care is considering its first corporate legal panel in 2009, while National Australia Bank has already launched a tender for its new panel this year.
Other approaches – Also mentioned in the article were: insourcing more work (Telstra); more staff training on areas of legal/compliance risk (Fosters); and better use of technology (Telstra).
So, what are you doing to cut costs?