Our Top 5 Tips for Maximising ROI on Legal Spend
In today’s rapidly evolving legal landscape, optimising legal spend is a top priority for in-house legal teams. By adopting smart practices, leveraging technology, and fostering effective partnerships, legal teams can enhance the value of every dollar spent.
Here are our five essential tips to maximise ROI on your legal investments:
1. Be Crystal Clear on Outcomes from the Outset
One of the most impactful ways to maximise ROI is by setting clear expectations and priorities from the start. When using fixed fees or alternative billing models, uncertainty can lead to inflated fees as law firms account for potential complications. By breaking down your legal matters into clear work packages and priorities, you can manage this risk effectively—essentially, it’s about using the right resource at the right level at the right time. This approach enables in-house teams to better compare pricing, ensures external counsel is aligned on the scope and desired outcomes, and avoids wasted effort and unnecessary costs.
2. Demand Greater Transparency in Legal Spend
Transparency is critical for both in-house counsel and law firms. Legal teams need full visibility into where their money is going, what services they’re paying for, and how these services are contributing to organisational goals. Achieving this transparency involves detailed reporting and real-time tracking of legal spend, ensuring that every dollar is accounted for. Not only does greater transparency build trust, but it also allows in-house teams to manage their legal budgets more effectively and identify areas for improvement.
Transparency starts with clear communication. At AllyOne, we’ve built tools that allow for real-time tracking of legal spend, milestones, and outcomes. This not only helps in-house teams see exactly where their money is going but also holds law firms accountable. Law firms can demonstrate transparency by being proactive in their reporting and by offering flexible billing models that are aligned with the value they deliver.
3. Explore Alternative Fee Arrangements (AFAs)
Traditional billing models often lack flexibility and cost predictability. Legal teams can gain better control over their budgets by exploring a blend of alternative fee arrangements (AFAs) such as fixed fees, capped fees, or outcome-based pricing. AFAs foster stronger, long-term partnerships between in-house teams and law firms by providing cost certainty and aligning incentives around performance rather than hours worked. This alignment helps to create value-based relationships and reduce the unpredictability of legal spend.
4. Leverage Legal Tech and AI for Efficiency
Legal technology and AI have the potential to transform efficiency and cost-effectiveness within legal operations. By automating tasks like document review, contract analysis, and routine compliance, AI frees up legal professionals to focus on complex, high-value work. Legal spend management platforms streamline communication, enhance transparency, and reduce risks, leading to both time and cost savings. Embracing tech-driven solutions can help in-house teams improve productivity, reduce bottlenecks, and make data-driven decisions on spend allocation.
5. Foster Stronger Collaboration with External providers
Building strong, collaborative relationships with external counsel is a key driver of success. By developing relationships based on trust and shared goals, legal teams can ensure better alignment with business priorities and receive more strategic, business-focused advice. When external counsel understands the in-house team’s objectives, they can proactively contribute to solving business challenges rather than simply reacting to legal problems. Regular, open dialogue with law firms about business priorities, combined with real-time data, trend reporting, and collaborative spend management platforms, fosters this alignment.
These five tips underscore the importance of utilising technology, exploring innovative billing models, and building stronger relationships with external counsel to maximise the ROI on legal spend. As the legal industry continues to evolve, in-house teams that adopt these strategies will be well-positioned to deliver greater value and efficiency.
To learn more about maximising the value of your legal spend, contact AllyOne.