On Consolidating Law Firms & Using Lower Billing Associates: Cost Saving Ideas That May Not Work

Recent study finds that consolidating legal work into fewer law firms & using lesser billing associates adds to legal costs.

As reported in an Inside Counsel article, a study by a legal software company indicated that as companies consolidates legal work, rates at those firms tended to increase so that overall, the consolidated legal work tended to cost more, not less.  The study also showed that matters staffed by newer associates tended to cost up to 20% more.

A big caveat here.

The study focused on corporate legal work.  And as I indicated in a prior blog post, corporate attorneys are not always the best examples of how to control outside legal costs.

So, at first blush, I was inclined to write the findings of this study off as having no value for claims litigation managers.  I was tempted to just view the study findings as another example of how corporate legal counsel can take two legitimate cost saving measures and work hard to make them not work.

Upon further review . . . Continue reading

How Lowering “Cycle Time” Can Reduce Both Outside Legal Costs & Internal Staff Costs

In the March issue of Claims Management magazine, attorney Jim Pattillo wrote a very interesting and valuable articled entitled “Legal Metrics that Matter with Defense Counsel.”  The article speaks to insurance claims professionals and outside defense counsel alike and gives valuable insights on how to measure the effectiveness of outside counsel.

Two of the more valuable metrics given in the article are “time to close” and “lawyers per indemnity dollar.”  The latter metric I have not seen written about before although it is definitely something I watch for in my legal bill reviews.  I invariably will alert the insurer when I see too many lawyers and paralegals working a file.  As Pattillo states in his article, “the legal expense is likely to be higher since each person who touches the file has to be brought up to speed.”  How true.

What Pattillo calls “time to close,” I call “cycle time.”  This is perhaps one of the most important yet most undervalued metric to be used to measure total legal costs. Continue reading