What's on Practical Law?
Enter to open, tab to navigate, enter to select
Making the case for extra resource
Practical Law UK Practice Note w-012-6456 (Approx. 8 pages)
This note sets out a process to help you identify your resourcing needs, assess and cost your options, and prepare a compelling case to present to your organisation to secure the additional resource you require.
Every department, including the legal function, is charged with spending their budgets effectively and, in many cases, with reducing spending on staff, projects or external advisers. Legal teams must be able to make their case for additional resources and demonstrate how this request supports the business' strategy and adds value to their organisation's bottom line. It is important to remember that additional resource may not always mean more people overall. For example, adopting better technology or hiring new lawyers with different skills may enable you to do more with less.
Stage one: gathering data
The legal team
If you don't already track activity, record how your department's time is spent over a given period (making this long enough to assess the impact of peaks and troughs). Record as much activity as you can to avoid under-reporting and focus on the types of activity performed (for example, high and low value-add activities). Seek to gather data that will help you understand and improve what the team does, rather than simply time recording to show how busy you are. For further information, see Practice note, Data analytics and business intelligence: an overview.
Benchmarking
Some law firms and other organisations conduct annual in-house surveys, so speak to your in-house counterparts and agree an exchange of departmental data. Recruitment agencies are another potential source of information, particularly if they see an opportunity to work with you.
External counsel
Gather time and spend information on external counsel for the last year and create a standard format to ensure you collate consistent data. This will help you:
- Assess if you've paid external counsel to carry out work that you could handle in-house.
- Understand if external counsel are putting the most efficient grades of staff on your files and managing them well.
- Compare the cost of internal and external spend.
- Consider what value the organisation gets from external spend.
- Judge whether knowledge is being built up in your team or if you are paying a law firm to repeatedly undertake the same work.
Your organisation
Your business case must support the organisation's strategy, targets and growth plans, and the way it prioritises its risks. Take time to review the corporate business plan and analyse whether you can adequately support it with your current resources. For further information, see Practice notes, Fitting legal into business strategy, plans and budgets and How to build a legal team strategy.
Analyse how the organisation's business and turnover has changed in recent years. If these have grown, consider whether the legal team has kept pace or if you are trying to support a larger, more complex organisation with little or no increase in your own resources. Look at other departments (such as Finance or HR) to see whether they have increased their resources over the same period and check what their recruitment and resourcing plans are going forward. Once you have gathered all the information, take time to digest it and understand it properly.
Analyse the risks and challenges ahead
You need to identify the legal, business, regulatory and political challenges and risks that the organisation is facing and consider whether your team can manage if the regulatory or legislative burden increases. It is also important to ask:
- What general contract risk is carried in the organisation? Is this known and managed or is it partly unspecified?
- Is the organisation subject to regulatory sanction and reputational damage if it gets things wrong?
- Are there legacy issues that could surface causing challenges to the organisation and to its ability to conduct business, such as a ban on bidding for public sector work?
Take a realistic view of what resources you need to meet these challenges and to properly support the organisation, both now and in the foreseeable future.
Consider the opportunities for the organisation
The legal team should not only focus on dealing with the risks the organisation faces, it should also support the organisation's plans to develop and succeed. Lawyers are an expensive resource, and you should look to maximise the value that the business derives from the skills and knowledge within your team. For example, by:
- Automating activities to reduce costs over the longer term.
- Considering whether there is an activity currently carried out by the legal team that could be easily undertaken by a business unit at reduced cost or improved speed.
- Moving resources from a less valuable activity, which has little impact, to support a business initiative where the legal team can add real value.
- Looking to improve the delivery of legal services by cutting out unnecessary process or removing roadblocks.
Stage two: gathering different perspectives
The next step is to get feedback from the wider organisation and review it from the perspective of both the legal team and the wider business.
Legal department perspective
Assess the impact of the resource shortage on the team. Consider whether:
- Productivity, quality of work and staff morale is suffering.
- You risk losing key staff (through overwork or lack of clear personal development and growth opportunities). Remember you can only take on challenging new work if you can find acceptable ways of doing the time consuming, lower value aspects of your current workload.
- There's adequate time for training and development projects and activities.
- You are merely firefighting.
- You're equipped to respond effectively to a crisis. For further information, see Practice note, Crisis management for in-house lawyers.
Business perspective
Speak with senior management, department heads and key customers, and find out:
- What impact your current resource has on their ability to meet their targets.
- If money is being spent on external counsel that you don't know about.
- If unacceptable or unquantified business risks are being taken due to a lack of legal resource.
- If the business needs more training or better processes to access legal support.
Stage three: assessing your options and priorities
When assessing your options, be sure to align your business case with the greatest risks and opportunities that the organisation faces. Your options could include:
- External counsel. If you need additional lawyers for a fixed period, external counsel could be the most effective option. However, you should avoid using them to plug a gap in core business support and instead use them for non-core matters. External counsel need not always mean a law firm, it may include junior counsel (barristers) who you can second in, self-employed lawyers or a flexible resourcing provider.
- Permanent hire. Although recruiting takes time and carries some risk and add-on cost, if you are looking for stability and continuity of support (including the option of a fixed term hire to do a particular project), a permanent hire may be the answer. The cost, other than for a senior lawyer, is likely to be lower than external counsel but you'll still need to state what value a permanent hire will add. This may be a more attractive proposition if it allows you to focus on strategic or higher risk matters, or to develop better processes.A permanent hire need not always mean a qualified lawyer. Many legal teams now recruit specialists (such as project managers and knowledge management staff) for specific tasks, which allow the lawyers to focus on more complex matters. Paralegals can also undertake routine tasks and may provide a future source of lawyers for your team.
- Interim lawyer. An interim lawyer is a good option for variable demands or one-off matters. Day-rates may be high compared to a permanent hire, but you'll only pay for days worked and not for holidays or sick leave. In addition, there are no overheads, which can be as much as 40% of an employee's salary, and you can also negotiate a short notice period.
- Legal process outsourcing. Legal process outsourcing might be an option if you are looking to reduce the cost of carrying out a necessary legal function of some scale. For further information, see Practice note, Alternative legal service providers: an overview.
- In-house outsourcing. You may be able to transfer an activity from the legal team to another department. For example, perhaps some contract work could be done in the individual business units or the IP team. You may need to factor in training and referrals (either to you or an external provider).
- Business partners. Getting good business partner support (for example, from HR, IT, Finance or Procurement) on back-office areas of the legal team's workload can greatly reduce the burden on the legal team, and ultimately improve the quality of its output.
- Technology. Investing in new or better technology can help improve efficiency and reduce costs, particularly in relation to lower value work. Bespoke legal solutions may not be especially attractive to the organisation but demonstrating that it will release resources for higher value work will improve your chances of success. Technology can also be scaled up quickly and reduce the risk of oversight or inconsistency. For further information, see Practice note, Demystifying legal technology.Getting the investment can be particularly challenging for smaller teams who lack clout when bidding for IT resource and it is therefore important to assess what off-the-shelf software and IT solutions exist within your company's licenced software suite. It is often possible to get a lot of benefit from the software and tools that the business already uses for other purposes without having to incur extra costs or get new IT approvals. For further information see Practice note, Working effectively with the IT team.
Although you may not need to present all this data, if you have made a cost-benefit analysis of each option it will show that you have done your homework. Also remember to factor in the cost of time and resource in carrying out your analysis, and any interim resource, while you or team members are gathering data.
Stage four: presenting your business case
Use visual aids and diagrams to make an impact when you are presenting your business case. Think carefully about how your audience likes to receive data and requests, and why what you are telling them will meet their needs. You'll want to show:
- The current situation.
- Where your team's work is focused.
- Your analysis of the challenges, risks and opportunities that are ahead for your organisation.
- The benefits and value that the new resource will bring.
- The costs: direct, indirect and contingent.
- A comparison with alternative options.
- How your proposal will support the organisation's goals and objectives, add value and control risks (at the agreed level).
- Your new organisation chart, if applicable.
Stage five: if you don't get approval
All is not lost if you don't get approval. If you have presented a strong case, you will have set a clear expectation within the business. Continue to track the data and ask for a meeting to represent your case in a few months' time. When that time comes, there may be an even more compelling business need. In the meantime, seek interim support to manage the workload your data has evidenced. Ultimately, you will succeed if you can demonstrate that the benefits of your case outweigh the cost of the resource.
The Centre for Legal Leadership provides education, coaching, mentoring and related career support services for in-house leaders to get the best performance from themselves and their teams.
End of Document
Also Found In
Resource ID w-012-6456Resource History
Changes Made to This Resource
This resource is continually monitored and revised for any necessary changes due to legal, market, or practice developments. Any significant developments affecting this resource will be described below.
© 2024 Thomson Reuters. All rights reserved.