THE BUSINESS CASE
In the wake of the Great Recession, corporate counsel across the globe may find
themselves facing new demands and pressures. Amidst an environment of
ever-increasing complexity and volatility, law departments strive to deliver higher
quality and enhanced value at a lower price.
In “the new normal,” every business function is under greater scrutiny and pressure
to shed the traditional “cost center” mentality. CEOs and CFOs now expect the
legal function to meet the same standards of operational excellence and focus on
performance that have long governed the profit centers of the business.
From cost center to value center
The results of ACC’s 2014 CLO survey1 indicate that corporate counsel hear the
message loud and clear. In 2014, 89 percent of respondents said they recognize the
importance of non-legal skills in their legal departments, and 62 percent point to
business management as the most critical non-legal skill.
While spend reduction remains a priority across the board, the fundamental challenge
is broader: the law department must prove its value to the business. Tried-and-true
cost management methods are still in vogue, with 73 percent of CLOs indicating the use
of alternative fee arrangements to control outside spend. However, a significant number
of law department leaders are thinking more broadly about their quest to reinvent the
department: 63 percent of CLOs reported bringing work in-house. In essence, these
law firm leaders are taking greater control over the challenge to “do more with less.”
Developed first in manufacturing operations, process improvement is a systematic
approach to elevate the efficiency and effectiveness of an organization by optimizing
its underlying processes. Process improvement efforts apply structured methods,
techniques, and tools to examine and modify processes with an eye toward continuous
improvement, using data measurement and rigorous statistical analysis as critical keys.
For law departments seeking to deliver on more aggressive service levels while keeping
costs down, process improvement can be a powerful tool.
When most successful, process improvement initiatives can help organizations better
articulate and focus on what matters to their clients. By assessing processes through
the lens of client-defined value, organizations are able to achieve meaningful gains in
efficiency and quality by eliminating activities that do not add value to the quality of the
client’s product or service experience.
1 ACC 2014 Chief Legal Office Survey, http://www.acc.com/legalresources/resource.