The COG Advice Series – How you can save money during a recession

Having worked in-house we understand the pressures in-house legal teams face to deliver savings on their external legal spend. These pressures only increase during a recession and as the economy struggles and the world moves into a ‘new normal’ because of COVID-19 – we have written this article to share our experiences of how REAL SAVINGS can be delivered.

Our expert team have over 20 years industry knowledge and experience of helping companies achieve savings. We have delivered hundreds of millions in real and sustainable savings for clients on their external legal spend. Here are just some examples of projects you could consider with high level case outcomes from our projects:

Panel Refresh – Most companies have panels in place but these panel arrangements need frequent refreshes and now is a perfect time to do it.  By working with clients to refresh their panels Coote O’Grady have achieved average savings of 27% from panel refresh exercises.

Moving work to ALSP’s – The traditional law firm is no longer your only option for legal work. Today’s buyer of legal services has many more choices available to them in a much more competitive environment.  We have worked with clients to move work to ALSP’s and delivered savings on one programme of £25M (54%).  We have also refreshed an ALSP panel and delivered 34% savings.

Legal Invoice (bill) Review – Reviewing legal invoice (bill) by line item, to ensure your law firms are adhering to your billing guidelines and agreed rate cards can capture large savings that could be missed by automated systems! We typically deliver savings of between 2% and 6% from these programmes but have saved as much as 26% in some instances!

Alternative Fee Arrangements (AFA’s) – AFA programmes focus on results and efficiency providing greater fee predictability and greater value.  We have worked with clients to put AFA programmes in place saving one client £6.9M (74%!)

Performance Management Programme – When it comes to managing the performance of your internal lawyers, you will probably invest significant time and energy into their development reviews and appraisals. Yet the story is usually very different for external Counsel. In our experience, the true value of external Counsel is not measured at all. If it is measured, it is not measured very well, e.g. clients will survey their internal buyers just before the panel process starts to get anecdotal perceptions on service.  By putting in place a robust performance management programme clients typically see savings of 11% / Real client saving example: £4M

Near shoring – Nearshoring is the process of transferring work to areas that are less expensive or more cost-effective and is a very low risk strategy for making savings on your external legal spend in our experience.  Savings of between 15- 40% have been seen / Real client saving example: £6M

eAuctions –  Electronic Auctions (eAuctions) for buying legal services allow potential suppliers to compete online, in real-time, to provide prices for the goods or services under auction. eAuctions have been successfully redefining Legal Procurement negotiations for several years now, but there are still many industries and businesses unaware of the benefits this type of negotiation can provide. Average savings of 40% / Real client saving example : £12M

Implementing a combination of, or just one of these legal spend management techniques can provide real and sustainable savings on your external legal spend.

For more information on how we could help you better manage your external legal spend in light of the current external environment please get in touch info@cooteogrady.com