FTSE 100 companies have had most success in reducing spend by improving their management of outside counsel rather than using technology, new research by The Lawyer has revealed.
In-house leaders surveyed cited panels, negotiating rates with external advisers and implementing billing policies as contributing factors for reducing their legal spend this year.
Just under a third of respondents said this approach has been “very successful” in reducing legal spend, with a further 64 per cent described it as “somewhat successful”. Only one respondent said they did not know or had not utilised these methods.
Sky was one respondent which found the method effective. The telecommunications giant has been busy looking at the cost of its external advisers – especially relevant in 2017 when the company became a takeover target for 21st Century Fox.
“We have grown-up conversations with our providers and they try and understand the challenges,” Sky director of legal for operations and innovation Hayley Stallard said. “We made good inroads, but cost is cost and you’ve just got to keep managing it.”
This survey of FTSE 100 in-house teams was conducted as part of The Lawyer’s FTSE 100 report in association with Consilio, released last week. The survey asked companies how successful various approaches to reducing legal spend have been.
The second most effective method for reducing spend according to respondents was investing in technology and processes. However, the survey found that only 9 per cent of respondents said improving internal legal operations, process and technology had been “very successful” at cutting costs. A further 74 per cent described this work as “somewhat successful”.
Half of respondents have used artificial intelligence (AI) and other innovative technologies to reduce spend. However, only one FTSE 100 company found AI and innovation to be “very successful” in reducing costs.
A total of 36 per cent of respondents, or just under three-quarters of those companies to have tried this found it somewhat successful.
Training business clients proves a fairly good way of reducing spend. Over three-quarters of respondents said training business clients had been a very or somewhat successful way of reducing spend.
However, a significant minority of in-house teams – 13 per cent – said such training schemes had not resulted in any reduction in legal spend.
Just over half of the respondents said they had tried outsourcing to alternative service providers. Of these, 58 per cent said outsourcing had been somewhat successful at cutting costs and a third believed it had been very successful.
The survey also asked companies which job roles and technologies would be most useful to add to their in-house team. The full results are included in this year’s FTSE 100 report.
This report, now available, is the definitive guide to in-house teams at the FTSE 100 in association with Consilio and the law firms serving them. It details which law firms are working with each of the 100 companies and on which types of matters. It also includes key metrics on in-house teams and best practice case studies. It is a must-read for FTSE 100 in-house teams and any firm that works, or hopes to work, with this group of companies.