Work Allocation Matrix
The following diagram illustrates an approach to making resource allocation decisions. Of course, each
organization’s sourcing decisions may vary based on the culture, legal needs, resources available, and
budget of the department.
Impact on Competitive Advantage
• Upper right corner. Matters that have a significant impact on the company’s competitive advantage
as well as high risk potential are often better handled internally at a high level because of their
strategic importance. For example, a company’s proposed entry into a new geographic market
has potentially high risk and a high impact on competitive advantage. Although some detail work
might be delegated internally or externally, higher level internal counsel needs to work with the
corporate development/M&A team to assess strategy, potential risk, regulatory and legal issues.
• Lower right corner. Lower risk matters that still have a high competitive advantage impact are also
often best handled internally. The higher alignment with competitive advantage indicates that
knowledge of the company’s business and perspectives are necessary. Because of the lower risk,
however, the department should attempt to leverage its resources to handle those matters at a
lower cost. Many types of contracts may fall in this range. They advance the company’s direction
but may not bear a high risk because of either the lower dollar value or subject matter. Training
internal business clients to handle these contracts themselves (with proper controls and escalation
points) is one way to keep this work inside the company but at a lower cost.
• Upper left corner. Matters with high risk potential but without significant strategic advantage are
better handled by well-qualified outside experts, since they are not likely to move the company
forward in its strategic plan. SEC investigations or some major litigation, for example, may be an
appropriate type of work to be performed by strong outside counsel. They require a degree of
expertise and have high risk potential, but because they are related to past history, they do nothing
to advance the company’s future strategic direction.
• Lower left corner. Finally, matters with low risk potential and low strategic value should be eliminated
or reduced, automated, performed by others in the company, or outsourced. For example, simple
human resources matters such as background checks do not need to be performed by the legal