The current pandemic is forcing many corporate legal departments (CLDs) to tighten their purse strings, but there’s a silver lining: The opportunity to give sourcing decisions a second look. Insourcing was already a trend; in-house legal department employment has tripled and many believe over 50% of legal work is now done in-house. Now, COVID has created a good time to re-evaluate insourcing/outsourcing decisions in ways that fit better with the new normal.
Based on talks I’ve had with legal ops directors, most of them don’t see further insourcing as a viable option, as they don’t have budget for additional headcount. However, insourcing doesn’t have to involve hiring more warm bodies, it can be accomplished by re-imagining processes and workflows. Even if it did require additional hires, studies say that legal insourcing can result in a reduction of around 41 to 60% in staffing costs. Thus, I am not convinced the resistance to insourcing is wholly financial. Rather, I suspect many organizations simply don’t want to change during an already-painful time.
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