Of course, many businesses are also dealing with reduced revenues and other financial uncertainties. To avoid reducing legal capabilities during a time when they are needed the most, businesses are understandably looking at cost optimization.
As with any business endeavor, strategically reducing legal costs requires a carefully crafted and well-executed plan. Below are a few considerations:
Engage stakeholders: To ensure that your strategy optimizes legal costs while also meeting the company’s overall business goals, it is imperative to involve legal staff from all departments as well as stakeholders from other key functions (i.e. finance, compliance, and human resources). Getting input early in the process can also help ensure that the strategy can be implemented successfully across the business and that staff is invested in the overall success of the plan.
Identify Areas to Target: Businesses should identify areas where costs can be eliminated, reduced, or otherwise reevaluated. The key is differentiating between “good” costs (those that can ultimately help fuel profit and growth) and “bad” costs (those deemed non-essential or inefficient). Obviously, the so-called bad costs should be targeted first.
Look for Ways to Increase Efficiency: Minor changes rarely achieve significant cost reductions. While it is more challenging to implement large-scale strategic changes, they often reap more sizable benefits. Options include consolidating outside firms, exploring alternative fee arrangements, setting litigation budgets, retaining specialized legal providers, standardizing/streamlining legal processes, investing in technology, and auditing legal fees.
Don’t Focus Exclusively on Cutting Costs: Cost optimization isn’t about simply cutting costs. When devising your strategy, it is also important to evaluate the risk to legal service delivery and the impact on long-term goals. Another point to consider is the time and resource investment required to make the proposed changes vs. maintaining status quo.
Communicate Your Plan: Once you establish your strategy, it is imperative to communicate it to your legal team, including outside counsel. While it may be uncomfortable to question the fees and billing procedures of legal providers, most are cognizant of the strain COVID-19 is placing on businesses and should be willing to adjust their fee arrangements.
Monitor the Progress of Your Plan: Senior management must work to set direction and maintain course, particularly when making tough decisions. Going forward, the effectiveness of legal cost reduction strategies should be regularly reviewed and updated. Staff should also feel empowered to look for additional opportunities to improve cost-effectiveness.
Scarinci Hollenbeck takes pride in delivering cost-effective legal solutions to businesses of all sizes. As we all work to adapt to the “new normal” brought on by COVID-19, we welcome the opportunity to discuss how we can help your business tailor your legal services to your current needs and budget.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Bob Levy, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
