How to Navigate Legal Cost Control in 2024

Navigating cost control initiatives within an in-house legal department can be tricky. Legal teams obviously need the appropriate resources to do their work—anything less would expose their organization to more risk. At the same time, however, no department is immune from recent macroeconomic trends that have placed an increased pressure on cutting costs.

Walking that tightrope can be difficult for any legal operations professional. That’s why I was fortunate enough to sit down with Zillow’s Director of Legal & Compliance Operations Mark Allen during our recent “Controlling Legal Costs in 2024” webinar to discuss some useful approaches for getting a handle on spend as we head into the new year.

Mark has extensive experience thinking creatively about legal spend management, and has implemented strategies that have saved Zillow’s legal team countless amounts of time and money. Here are some of the top 2024 legal cost control tips that he shared during our chat.

Create a System of Record for Legal Spend

You can’t control costs if you don’t know what they are. You might be surprised at how common it is for legal teams to lack the data insights they need to accurately track—and consequently predict—their expenses.

Implementing an e-billing platform is a great place to start when it comes to consolidating that data. But it’s not a set-it-and-forget-it solution. The platform also has to be a good fit for your organization.

“Once you have an e-billing system,” Mark said, “it’s so important to figure out whether the e-billing tool you have is the right one for your department. Is it giving you the data? Is it being used in the optimal way that you know it needs to be? And if not, don’t be afraid to make the change, make the business case and switch things up.”

That, it turns out, was exactly what Mark did after joining Zillow; he made the switch from their legacy e-billing software to Brightflag. And it turned out to be the perfect fit for Zillow’s legal department.

“I was super blown away by the usability of the user interface. But more than anything, it was the A.I. feature, which does the worst part of managing outside counsel work: invoice review, making sure that invoices are not infringing on your guidelines, etc. So I was super impressed with Brightflag.”

Benchmarking Your Outside Counsel Law Firms

Once you have most of your legal spend data in one place and are able to analyze it, the next step is mobilizing those insights to save your legal team time and money. And one of Mark’s favorite ways of doing just that is by comparing and consolidating outside counsel law firms to ensure your legal team is working with their most efficient, cost-effective vendors.

“I know that this can be a tricky thing to navigate within your legal department,” Mark noted. “But really try to build policies or processes that start to ask attorneys important questions on why they’re engaging the counsel they’re engaging.”

By comparing law firms rates, and taking deeper dives into the quality and timeliness of the services each firm provides, the ideal resourcing for your vendors will likely start to come into greater focus. And sometimes those insights may be surprising.

“I think there’s a perception that the larger the law firm, the better the service. And the better the quality of counsel that they’re going to get. But I think you should put data behind your vendors. Really start to collect and show the data on how vendors compare when it comes to timeliness of response, for example, or just cost generally.”

“If one firm is doing pretty good work for $1,200 an hour,” Mark continued, “and another firm is doing that work for maybe that same team or another team for $600 an hour, present that data to an attorney and ask them: is it worth double the price?”

“Many attorneys are smart folks. And they’ll quickly pick that up and say: yeah, it’s a good point. Especially if you’re in a cost-conscious environment. It becomes a part of the zeitgeist a bit.”

More 2024 Legal Cost Control Strategies

Perhaps now more than ever, finding creative ways of cutting costs is top-of-mind for legal departments. Which means legal operations professionals have their work cut out for them in the year ahead.

Fortunately, these recommendations only scratch the service of Mark’s insights on the topic. If you’d like to learn more tried-and-true strategies for legal cost control from Mark’s extensive experience, be sure to check out the full “Controlling Legal Costs in 2024” webinar.