Admit it. GCs have few friends when the company budget is being discussed.
Everyone thinks the GC is giving money away to his or her former law firm.
When the legal department is seen as a cost center, even GCs who are lawyer’s lawyers spend too much of their time playing defense on costs. This reputation as a cost center is an impediment to the GC’s ability to perform her job and a blow to her status in the C-Suite. Legal is not recognized as a full business partner. Legal spends its time defending costs diluting its message on the value it brings and how its substantive advice supports the business goals.
As the industry rapidly moves away from the misconception that higher and higher legal costs are unavoidable and unquestioned, the risk to the GC’s job is rapidly rising.
GCs need to play offense and show that they are running their department in a business-savvy way by gaining control of the data.
Top GCs, like at GE, for example, have introduced accountability and competition to their management of the legal budget by commanding a full 360 degree view of data on outside counsel spend, giving them the data to defend choice and management of counsel.
Through that control, GCs can demonstrate:
- That legal has the data and business tools to drive improvement;
- How certain costs may be driven by choices of the business rather than legal;
- That legal has the data to pursue business cases for success and improvement.
A legal department that is seen as a full business partner receives less blowback. According to former Sabre Corporation General Counsel, Sterling Miller,
“Being able to demonstrate that you are paying close attention to costs and that you are thoughtful in what you are spending and why, will make conversations with Finance (and the CEO) go much easier. In-house lawyers who run their matters, teams, or department like a business have more credibility at budget time –-and during those really tough times when the business is looking for more difficult cost cutting measures.”