Leverage is central to law firm profitability. Most levels of lawyers can delegate 20% of their work to less senior lawyers or to paralegals. Delegation should be optimal, not optional. Turnaround time, knowledge transfer, and stable legal teams are influenced by proper delegation. Failure to delegate tasks is a much more widespread challenge in legal departments since counsel usually does more than 90% of the work on a file. General counsel must monitor file count, file complexity, and cycle times against objectives.

Most law departments do not possess the information or analyze the data that they have to leverage law firm capabilities. The result is a default to retail hourly pricing and the usual discounts for volume.
Too few firms have robust templates for matter plans and budgets. Planning assumptions and a percentage certainty by phase and task are the exception.
When asked, law firms always meet the challenge to produce data about practice patterns, to generate robust matter plans and budgets, and to accelerate the introduction of alternative fee arrangements.

There are 3 ways for Directors of Legal Operations to collaborate with Procurement professionals when the company decides to be more structured when retaining external counsel. The first is to collate solid data on consumption patterns for legal services: fees and hours by area of law; volumes by complexity level; detailed matter budgets. The second opportunity for collaboration concerns leading practices, technology, and infrastructure related to workflows and service delivery. With this comes structured practices and results applied to law firm performance. The third area of collaboration between legal operations and procurement is the migration away from hourly-based fee arrangements.

Some 80 per cent of law firms have no templates or standards for budgeting complex legal work. Few in-house counsel feel at ease analyzing and challenging matter plans and budgets prepared by law firms.

Budgets should set out the hours for each fee earner by phase and task of a matter. This should be done after communicating planning assumptions to yield a budget plan that is 85 per cent reliable for a most likely outcome rather than a worst-case scenario.