Article: Cost Savings Case Study

LegalShift’s consulting services are largely focused on operational improvement.  However, based on our team’s broad experience, law firms and law departments approach us to help them review and save contractual costs.  Spend categories for these services have evolved to include:

Law Firm Operations

Law Firm Technology

Legal research contracts spend reduction and library efficiency Telecommunications cost reduction
Middle and back office managed services spend reduction Technology (IT) spend reduction
Gas and electric fees reduction Print/copier equipment and managed services cost reduction

The following case study is intended to highlight a recent law firm success.

AUDIT OBJECTIVE: LegalShift was hired by the new COO of a large law firm to perform a Back-Mid Office Services and Technology Software and Services Audit, scoped to include a variety of administrative services and technology contracts that were hand selected by the Firm.

Background: In the areas defined by the client, the firm was spending approximately $4.5M annually, in contracted back and mid-office services, software, hardware and technology services including telecommunications services (wireless, wireline and conferencing).

AUDIT DISCOVERIES: When reviewing the invoices, contracts, service level agreements, headcounts, utilization, etc., LegalShift discovered the following:

  • Billing errors by providers
  • Expired contracts
  • Client was paying above-market rates
  • Delivered services were, in many cases, substandard
  • Auto-renewal clauses without limits on annual fee increases
  • Contract minimums above actual consumption
  • Heavier staff coverage than required to meet Service Legal Agreements
  • Zero-usage mobile devices (being billed at full monthly fees)
  • Inefficient processes relating to invoice validation and processing (e.g., paper bills, unconsolidated bills and manual bill review, G/L cost allocation, inputting of invoice data, tracking of contract expiration dates, processing and payment of bills)

RESULTS: LegalShift delivered a one-year cost savings of over 30%, totaling almost $1.4M.  Four- year savings total approximately $5.2M.  First year savings breakout, alone, can be found below:

  • $700,000 (43% savings) in copy, mailroom, print related services, software and hardware
  • $120,000 savings on expensive financial software licenses and subscription fees
  • $170,000 (13% savings) of optimization savings and credits due to telecommunications billing errors
  • $95,000 (15% savings) of optimization and contract savings
  • $100,000 savings switching conferencing service providers

In addition, LegalShift continues to expand its review scope with further savings to be identified.

NOTE:  Importantly, the results had no negative impact on the Firm’s lawyers, while service levels and solution capabilities improved across the board. 

For more clarification, please contact us at www.legalshift.com.