As the end of the calendar year approaches, the budgeting/planning process for the 2021 fiscal year is underway in many organizations. One unknown for many businesses is anticipated legal expenditures, especially in light of the continued pandemic-related financial disruption that is affecting many industries. Incorporating alternative legal service providers (ALSPs) into department and corporate budgets at the planning level can help organizations plan for proactive and reactive legal spending while reducing budget dollar allocations for internal contract attorney staffing and outside counsel expenditures.
ALSPs, which include legal process outsourcers (LPOs), staffing companies, managed legal services, and accounting/audit firms, offer specialized, value-driven solutions and services for businesses in any industry. These organizations leverage technologies and expertise to provide contracted-for deliverables in an efficient, cost-effective manner when compared to retaining work in-house or contracting with outside legal counsel. Benefits of including ALSPs in the budgeting process include:
- Reducing legal spending. More than half of legal department budgeted spending typically goes to outside counsel. Sending task-oriented, high-volume work such as document review, eDiscovery, and contract management to ALSPs can result in significant budget savings.
- Ensuring global compliance. As consumer privacy regulations and other mandates continue to grow in number and scope around the globe, it is more important than ever for companies and legal departments to ensure compliance. ALSPs can help organizations with maintaining their compliance standards, lowering the costs associated with regulatory compliance.
- Timeliness and efficiency. Working with ALSPs creates resource efficiencies, because their organizations are designed for flexible staffing and can scale quickly to meet required project timelines. Because ALSPs often specialize or focus in the services they provide, they are typically able to commit to short deliverable windows.
To effectively incorporate ALSPs in your organization’s 2021 budget, start by evaluating current resources and identifying tasks and projects that could be handled by an ALSP as opposed to relying on outside counsel or on internal resources. Approaching budgeting by analyzing and classifying work in this manner should provide stronger, more detailed, and more reliable budget estimates.
Baer Reed provides reliable, efficient, and effective outsourced business and legal services. Contact us to learn more.
- On November 9, 2020
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