How Corporate Law Departments Should Plan for 2022
What's your legal department's approach to budgeting? Nathan Cemenska, director of legal ops and industry insights for Wolters Kluwer's ELM Solutions, has a few suggestions for you. First, don't do what way too many law departments still do and tack a modest (3%) increase on to what you spent the last few years. That's a lazy path.
"Corporate legal departments (CLDs) are looking forward to 2022 with optimism, particularly after the challenges of the past couple of years," Cemenska writes. "But that optimism will only be realized through careful planning. Looking ahead, CLDs need to consider everything from budgeting to technology investments and many details in between."
"Be systematic and smart with budgeting,"Cemenska continues. "Your budgeting process should follow a methodical, 'scientific' approach that carefully examines your current mix of legal matters, how spend in those matters might change, the anticipated cost of any new matters likely to arise, and a 'wild card” cost for any unanticipated matters.'
Pointing to recent data from LegalVIEW® Data Warehouse, you want to pay sharp attention to "megamatters," which ELM's analysis of mountains of legal bills shows are "so highly correlated with outside counsel spend as to be practically determinative. In fact, somewhere between 2.5 percent and 5 percent of all legal matters generate 80 percent of outside counsel spend in a typical organization. Fortunately, there shouldn’t be too many of these, so you can study each one carefully, starting with the biggest."
Published April 25, 2022.
