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Insourcing brings in tangible benefits for corporate legal departments

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by Ritoban Sengupta
1 January 2017

The traditional way of outsourcing legal services to outside counsel, which was considered economical is no longer a norm with more and more corporate legal departments looking to bring work in-house.

Insourcing has become a prominent trend driving the legal industry in recent times with more and more legal departments considering this option to counter cost-pressures. There has been a gradual decline in work being outsourced to outside counsel as corporate legal departments increasingly look to reduce outside counsel cost given the stringent legal budgets.

With an increase in the amount of work being insourced, the need for recruitment has also spiked up. Legal departments are now looking for a mix of seasoned in-house lawyers, law firm lawyers and paralegals.

Challenges and rationale behind insourcing of legal services

In the past, heads of legal departments were entrusted with the task of merely searching and paying law firms for handling the major part of a company’s legal work. However, in the current scenario with legal departments functioning on shoe-string budgets, the focus is on cost-saving opportunities. The key challenges faced by the legal departments are:

  • Keeping management informed of legal changes
  • Enhancing predictability of legal spending
  • Use of technology to enhance internal efficiencies
  • Minimize outside counsel costs
  • Less internal resources

Earlier the emphasis for corporate legal departments was on relationship with outside counsel, now corporate legal departments are looking to implement new practices to better manage the work and move it away from outside counsel. Some of the practices being increasingly implemented by corporate legal departments are:  

  • Increasing full-time attorney hires
  • Employing temporary contract lawyers
  • Engaging legal managed services 
  • Implementing new technology tools
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