Will the wave of cost cutting wash away law departments?

Denney’s next sentence does not ring true: “So the next strategy has been to cut the department’s size.”

Benchmark surveys, compensation studies, my consulting projects, conferences, and the law department journalists are not teaching that law departments are shrinking.  [But see my post of March 25, 2005 on shrinking law departments.]  No sane executives in America could conclude that wholesale firing of in-house counsel appropriately and effectively reduces total legal costs.

This is not to say that terminating under-performing lawyers is senseless, or shifting workloads and responsibilities among the current legal staff can’t bring improved productivity, nor that outsourcing has no bite.  But it is to say, loudly and often, the best investment a company can make toward legal health and a lean legal budget – hire good lawyers and manage them well.

Bob Denney, a law-firm marketing consultant, wrote in Law Practice (April/May 2005 at page 6) that cutting law firm costs “hasn’t produced the results demanded by senior management.”  That statement may be true.