As the new year begins, it’s the perfect time to reassess the efficiency of your organization’s legal staffing spend. The current economic environment is pressuring the budgets of every law firm and corporation, with experts predicting that conditions may ease following a modest recession over the next years.

Analyzing whether your legal staffing levels and related costs are balanced in the most efficient manner should be part of every business’s annual evaluation. Performing a legal staff spend analysis takes into consideration these foundational elements as well as some that may be unique to your operations, and can provide your company with a clear view of whether your level of investment in legal staffing is returning the best value for your organization.

  • Can alternative legal staffing options deliver expertise and better cost-efficiency?
  • Have you reexamined comparative costs for your vendor products and services?
  • Is your contract management outsourcing delivering the best value?

Some analyses reveal that an organization’s legal staff remains at a level necessary to respond to occasional spikes in workload but larger than required on a usual basis. Other firms learn that they can save while obtaining access to legal talent with a greater depth of technical insight than their current staff. There is no downside for responsible leaders to learn if their current budget is paying for permanent employees when alternative staffing solutions would provide long-term efficiency and cost savings.

Are your current vendors offering the highest quality services available at the best value? 

Unless an organization’s leaders periodically reassess the value of the product being delivered, they lose the opportunity to move to a more cost-effective vendor while maintaining or improving quality.

Could your organization benefit from legal staff spend analysis?

Purpose of an Effective Spend Analysis

An essential step in conducting a detailed staff spend analysis is considering different approaches to solving legal staffing needs as the volume of work or the complexity of issues changes over time. Organizations must have the right legal talent available when they need it, and the need is often unpredictable. But keeping the level of legal talent inflated with full-time staff as a contingency unnecessarily drains valuable resources better directed to other purposes.

Conducting a spend analysis reveals where your costs are efficiently producing the returns you expect, and in what areas your operation is missing valuable opportunities for improved performance at lower costs. Every business in today’s global economy should know whether alternative service providers can provide an equal or higher quality product at a level expense or lower. Control of your business requires an awareness of other market offerings that benefit your stakeholders.

Basic Formula for an Effective Spend Analysis

The process involves little more than sharing current invoices and discussing performance expectations. A professional spend analysis examines not only the current cost-per-performance ratio but also projects whether significant savings can be achieved by adopting a customized plan to fit the individual needs of your organization.

Results of an Effective Spend Analysis

The result of a thorough spend analysis can affirm that an organization’s current legal staff expenditures are delivering ideal value, or it may expose more spending than is necessary to obtain the highest quality legal talent available. Are your contract legal vendors offering better value than an existing group of exclusively in-house counsel?

Your spend analysis could show that contract legal vendors can provide better value on certain projects than permanent staff. Can a mixed staffing solution better serve the needs of the organization? And what is the best mix of in-house and contract counsel for your organization’s needs and budget priorities?


Is the spend analysis right for you? Performing a spend analysis yields three tangible benefits to every organization by comparing the relative costs of alternative approaches:

  • By weighing the actual projected cost savings offered by a variety of staffing options, management sees the hard figures detailing the relative costs and savings of various legal staffing approaches. Without this data, decision-makers remain hamstrung in arriving at the most advantageous outcome for the upcoming year.
  • The spend analysis provides leaders with an annual checkup. Are all the organization’s systems functioning well? The analysis identifies adjustments that may need to be implemented to prevent an ongoing problem, or alternatives that can be selected to improve a division currently performing only adequately.
  • The spend analysis process is pain-free and delivers a clear view of hard numbers with which decisions can be made. The results of a spend analysis compel no action. The spend analysis only lays bare where your organization has opportunities to improve the value of the services it relies on.

 A proper spend analysis can be conducted anytime, anywhere and reveal whether current vendors are providing value as well as highlight immediate opportunities for improvement within your organization.