Hi Morgan,
I recently heard another story of in-house layoffs.
“[Unnamed consulting firm…take your pick 👩🏽💼👨💼👨🏽💼 ] has been in and our entire law department is getting crushed.”
It hurts to hear it. 😔
Especially when I’ve heard other enterprise teams tell me:
“If it weren’t for PERSUIT, we’d be laying off more people.”
But unfortunately, I’m not surprised.
With austerity measures the new norm — and GenAI only accelerating the race to find new efficiencies — the artifice that “legal is untouchable” is quickly crumbling.
And when the consultants are brought in, it's typically about one thing.
Creating new efficiencies and automations with a sole focus on reducing costs.
GCs face a choice point.
(1) Take charge of your own narrative by demonstrating discipline and process in how you manage your resources.
Or…
(2) Wait for someone else — like the next opportunistic consulting firm — to do it for you. And accept the consequences that go with it.
I’d like to think it’s an obvious choice.
What can GCs do to own their narrative?
With outside counsel handling an outsized share of the average enterprise legal team’s matters — and consuming around 50% of the total legal budget — it’s an obvious place to start.
As one PERSUIT customer GC cogently summed it up for me:
“For every matter that comes in, before they go out and hire a firm, I want our lawyers to be thinking about:
“What are we trying to achieve?
“What are the outcomes that we need to occur?
“And what is the best way to achieve those outcomes?”
When in-house lawyers start to exercise this new cognitive muscle 🧠 in how they engage their firms, they often discover:
(1) They’ve got the resources and expertise to handle many matters that they would have previously sent to their firms.
(2) For the matters they can’t handle in-house, a mid-tier firm or alternative legal service provider can provide the outcomes they need at a fraction of the cost of dialing up their favourite firm.
(3) And where it makes sense for the matter to be sent to their more traditional panel of outside firms, scoping the matter within the framework of those questions and having your firms competitively price the work is the best possible way to demonstrate discipline and process in how the in-house team is managing its (scarce!) resources.
“But compete for our matters? We can’t do that to our firms!”
[Real objection from a team that shortly after faced layoffs of more than 10% of their in-house team.]
I can’t say it any more plainly to the GCs who are listening.
While you’re busy worrying about whether you should put in place a disciplined process to manage the way your team engages your law firms and how to sell change to your team of lawyers, the rest of the business is worried about only one thing:
Driving better outcomes in the most efficient way possible.
And if the rest of the business is focused on outcomes and value for spend, then legal must also start operating with an outcomes-based lens in how they resource their matters.
When your CFO wants you to explain your logic for sending millions 💲💲💲 to the same 3 top-tier firms, you’ve got to have a way to show that you’re exercising discipline in how you’re engaging your outside counsel.
Or the people sitting next to you might be part of the next 20% reduction in staff.
GCs have two options.
The question is which one will you choose?
Cheers,
Jim
