For decades, law departments have strived to demonstrate that they are a part of the business, helping to set strategic direction and influencing corporate agenda. Their increasing success at becoming further ingrained in strategic planning and corporate governance has resulted in a shift from the law department as a cost center to the law department as a business unit, focused on efficiencies and cost savings like any other part of the organization. This shift has required new models for operating that use an increasing variety of staffing options. It has also necessitated a corresponding alteration in law firm service structure.
This transition, while much discussed, is not well understood. Are law departments insourcing more than they are outsourcing? Are they open to non-law-firm service providers? Has there been a race to the bottom on legal costs? And, much more fundamentally, are law departments innovating on pace with their peers, and are law firms developing a better understanding of what the client wants?