As pressures mount on in-house legal departments and their in-house lawyers to meet the pressures corporates face, a new EY survey shows the varied benefits that accrue to the in-house legal departments by using external lawyers.
A report from EY Law taken from over 1000 legal departments shows that some are using external legal managed services (LMS), while others are reticient about doing so. The report demonstrates the various advantages for corporate lawyers to use external lawyers to help deal with the pressures facing in house law departments.
As General counsel seek to ensure their companies are compliant with an ever-changing regulatory landscape, while at the same time managing their day-to-day legal operations, the benefits of cost reductions, meeting short-term goals and creating efficiencies – among other benefits – can be derived from the external lawyers.
The EY report analyzes the trend towards use of LMS by corporates and the benefits over both short- and long-term.
3 Primary Findings
Among the primary findings of the report are:
3 Different In-House Groups Identified
The report shows that there are significant differences in the
way law departments use managed services. It also reveals
that a group of innovative law departments have embraced
the managed services model and are actively looking for
ways to continuously expand its use.
LMS Used for Complex and Varying Reasons
Examining the data across the three groups, it is evident
that the forces driving law departments to use LMS vary
significantly and extend far beyond cost reduction. EY
research shows that the key drivers leading law departments
to pursue LMS include:
• Cost‑savings targets
• The desire to optimize internal processes due
to rising volumes of work
• Access to better quality information on comparable costs
and the productivity of internal and external resources
• The arrival of new LMS products and services allowing for
new technology‑enabled delivery models.
Benefits of LMS are Often Dramatic and Multi-Layered
Not only are there significant near‑term benefits to be had from
using LMS that extend beyond cost savings, but also there are
ongoing positive impacts around technology, human resources
and the ability to continue innovating in the future.
This research shows that law departments that use LMS most
widely enjoy a broad range of benefits in that they are:
• More cost effective in service delivery today
• More confident about improving efficiency in the future
• More confident in their ability to respond to geopolitical and
• More confident they have built the right set of capabilities
within their departments
• Better able to attract and retain talent
These areas are examined in more detail in the following pages.