"You have to decrease the size of your law department by 40%. I know it’s at a time when the demand for in-house legal services will be going way up, but such is life."
"You have to reduce your spend on litigation by 50% with no drop-off in quality."
How would you like to be on the receiving end of such an edict? Well, the edict part is made up, but the March issue of Corporate Counsel contains two stories that are must-read. The first is on the story of David Leitch, General Counsel of Ford, and how he had to cope with reductions of 40% in his department. 40%!!!
The second article is about Kevin Blodgett of Dynegy, and his restructuring of that company’s law department and the reduction of its external litigation spend.
There is HUGE lesson to be learned. David Leitch summarizes it best:
Leitch acknowledges that the downsizing was painful. By the end, he says, "I thought we were really cutting into the bone." But his misgivings have dissipated: "As I sit here now, I realize it was necessary." Plus, Leitch says, "people have adapted, and are more efficient and effective than they ever thought they could be." His department continues to perform at the same level, he says. And it hasn’t increased its use of outside lawyers to make up for the loss of in-house attorneys.
Think about that for more than a bit. A 40% reduction in in-house personnel. No fall-off in performance. What does that mean? I am not suggesting there was fat in the Ford law department. To the contrary, I am suggesting that when forced to do so by circumstances, lawyers like those at Ford find a way to get the stuff done that needs to get done, that necessity is a fantastic driver (pun sort of intended).
My guess is that if forced to do so, a lot of law departments could go through the same trial by fire and emerge much as Ford did.
Is there a lesson here for law firms?