Making The Pitch To Grow Your Company's Legal Team

As a legal leader, it's crucial to understand the importance of building a strong and agile legal team that will handle the evolving challenges of your organization.

Recent waves of layoffs and economic uncertainty[1] only underscore the pressures that businesses face to operate efficiently while navigating the increasingly complex legal landscape.

However, convincing the C-suite and other stakeholders to invest in additional legal talent can be a Herculean task, especially in a compressed economy, where everyone is asked to do more with less.

To make a compelling case for bringing on additional support, you must demonstrate the value and impact of your legal function, alongside the risks and costs of having insufficient resources. The following pointers can help.

1. Identify the current and future needs of your legal team.

Analyze the volume, type and complexity of the legal work that your team handles, and how it aligns with the strategic goals and priorities of your organization.

Evaluate the current capabilities and expertise of your team members to identify any gaps and areas for improvement. Future demand for legal services based on your organization's economic growth plans, e.g., acquisition, divestiture or going public; market trends; and regulatory changes should also be factored into your team's needs.

If your organization has a growth mindset, you need to have a legal department that matches this approach.

The "2024 Law Department Management Benchmarking Report," published by Major Lindsey & Africa and the Association of Corporate Counsel in June, drew on insights from 421 legal department respondents across 24 industries and 32 countries.[2] It found that the median number of lawyers for companies with less than $1 billion in revenue is two. For companies with $20 billion or more in revenue, that number jumps to 92.

That is a staggering increase of 4,500%. Consider how your team's workload would change if business increased by 20%, 50% or 100%.

In order to prepare for the demands of growth, you should identify key areas where hiring could support your team's needs. These key areas could include building a commercial contracts function; creating in-house merger and acquisition and litigation teams; and buttressing your team's legal operations function with both talent and a workflow system.

2. Quantify the value and impact of your legal team.

To demonstrate how your legal team contributes to the bottom line and supports the core functions of your organization, provide data, metrics and cost analyses of your team's work.

Your team must be seen as a value-add rather than a cost center. To illustrate the value of your team's work, consider highlighting internal metrics that measure the revenue generated or protected by your legal team; the cost savings achieved; the costs associated with the attrition of an overworked legal team; or the compliance or reputational risks that are mitigated.

Examine benchmarking data and industry best practices to compare your legal team to your peers and competitors, and understand where you have room for improvement.

According to the benchmarking report mentioned above, for companies making $1 billion to $5 billion in revenue, the median number of legal staff is 16, including nine lawyers. If your legal team falls below this median, you may be experiencing challenges such as work overload or increased risk exposure, signaling that now may be the time to consider hiring additional support.

3. Assess your hiring needs.

With a clear vision for the future and industry benchmarks in mind, you can turn your attention to the staffing needs of your legal team. It's necessary to identify where additional support is needed in order to help guide your approach to hiring and allow you to optimize your legal budget.

If full-time hires are not realistic, consider alternative ways to augment your legal capacity, such as outside counsel or utilizing interim counsel on a contract basis. You already have an established budget earmarked for outside counsel, and that same budget can be used to add interim counsel, allowing you to access great legal talent during hiring freezes or economic downturns.

Outside counsel bring specialized expertise, resources and institutional knowledge of your organization, and typically an army of associates to scale up or down based on demand, as well.

However, the costs for this approach are often not efficient as three or more law firm attorneys will touch a project or an issue before providing an answer or strategy. This approach can quickly consume a legal budget.

Hiring interim counsel provides a legal team with access to a pool of legal professionals who are subject-matter experts, enabling the in-house team to focus on strategic and high-priority matters. Typically, the subject-matter expert will address the issue individually, instead of the law firm approach.

Notably, these subject-matter expert consultants generally have law firm training and in-house experience. Interim counsel can integrate into a legal team for a finite period, with the potential to transition to more permanent roles.

However, there can be risks associated with interim hiring. For example, your interim hire could be recruited for a permanent role elsewhere during the consulting period. Alternatively, while you might want to convert them to a full-time role, they may prefer consulting opportunities, or may not be able to extend their interim assignment due to other consulting commitments.

Considering the current economic compression, and given a desire to keep their clients happy, many Am Law 100 and Am Law 200 law firms are offering secondments to in-house teams at a reduced hourly rate or monthly flat fee.

In the immediate term, using a law firm secondment can be an economically efficient option: Law firms are not as busy as they have been in the past, and have therefore slashed their rates. It's also important to note that a young associate's work would of course be reviewed by a senior attorney.

While a seconded law firm attorney offered at $7,000 to $10,000 per month is very attractive in the short term, as it appears to be an economically efficient option, deeper investigation into the associated costs proves the contrary.

Law firms traditionally second green, junior attorneys, who will require a sufficient amount of time and training in both the substance of the law and the minefield of in-house politics. Also, from a long-term sustainability standpoint, law firms can lose money on this option so it's not a forever solution.

Evaluate the pros and cons of each option in terms of quality, efficiency, cost, risk and scalability. Compare the expected return on investment, and highlight the trade-offs involved.

4. Communicate your business case clearly and persuasively.

You should begin with an assessment of whether your team needs the expertise of a senior subject-matter expert or a more junior law firm associate.

This decision should prioritize that specific expertise, rather than focusing solely on immediate cost concerns. It's also important to evaluate whether your team's need will be short-term or long-term, and to consider the value and gains that these options each offer over time.

After a reasonable trial period with a consulting attorney, present your case to leadership to convert them to a full-time employee.

In your presentation, share a comprehensive assessment of your organization's legal needs, supported by benchmarking data and internal metrics that justify the need for additional headcount.

Highlight the improvements and positive results driven by the interim support, with supporting examples to proactively address any potential objections or questions.

You should also be sure to emphasize how this hire will help your organization achieve its goals and overcome challenges.

Conclusion

Adding headcount to your legal team can be a smart and strategic move, but it requires solid justification and a convincing pitch. By building a strong case for expanding your legal team based on data and measurable outcomes, you may find that you will easily secure the support and approval of your senior management and other stakeholders.