We’ve heard a lot about big data and business intelligence lately. In fact, Gartner indicated Business Intelligence was the number one priority of CIOs for the second year in a row in their recent IT Spending Update for Q1 2013. However, within corporate legal departments, much of the conversation is still about taking on increased workloads while reducing total legal department expenditures.
One area we see this budget squeeze and business intelligence converging is in the practice of in-sourcing corporate legal work as a way to reduce costs. In fact, in a recent Altman Weil survey of chief legal officers, 46.9% of respondents have shifted work in-
house as a way to control law department costs.
“If cost reduction is the goal and in-sourcing is the vehicle, then business intelligence is the engine.”
If cost reduction is the goal and in-sourcing is the vehicle, then business intelligence is the engine. More and more leading corporate legal departments are adopting platform Enterprise Legal Management solutions which consolidate and analyze all legal department data (operational, spend, qualitative attorney ratings, regulatory forces and risks) and provide never before seen levels of intelligence for the legal department.
Big data from ELM solutions has powered increased in-sourcing as a cost savings measure in three fundamental ways:
- Ability to prove the business case to in-source: With unparalleled access to data such as cycle times, total time spent, attorney ratings, payouts, and external spend, business cases can be built and proven more easily and accurately than ever before. Until law firms get more serious about reworking their business models, these business cases will continue to point toward in-sourcing as the path to reduced costs.
- In-sourcing continues to feed the data center, increasing the value of keeping work in-house: The more work is kept in-house, the more data related to the matter is produced within the ELM solution, making the insights generated stronger and more valuable.
- At the matter level, this single source of truth provides the attorney more insight than external counsel: For many types of matters, this intelligence is tipping the scale of expertise in favor of in-house counsel rather than outside counsel firm.
Until the law firms fundamentally begin to rework their business model to compete, I expect the data and insight provided by ELM to continue to power more in-sourcing over the next 3-5 years, even as budget constraints potentially loosen with an improving economy.
For more information about trends involving in-sourcing corporate legal work, please view Mitratech’s latest white paper, “Moving Matters In-House: How Technology Enables Legal In-Sourcing”, which will be published on April 25. In addition, Mitratech will be attending the ALM Texas Lawyer In-House Counsel Summit tomorrow in Austin, Texas, where Jason Parkman, Mitratech CEO, will be presenting a session of the same name. I will also be in attendance at this event, and I look forward to speaking with some of you there.