Outside Counsel Program Optimization Strategy

Legal: Outside Counsel Program Optimization

Steering Committee Update: Program Optimization Strategy

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• Executive Summary & Core Findings
• Problem Statement: Practice Group Variation
• Recommended Strategy: Commercial & Relationship Disciplines
• Operational Levers: Billing Enforcement & Preferred Counsel
• Roadmap to July 1 Launch
• Steering Committee Discussion & Alignment

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1

Diagnostic Findings

Current state of outside counsel usage and management

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• Outside counsel usage is already highly consolidated: top 12 firms account for 80% of total spend and matter volume.
• Within most practice groups, 80% of spend/volume is concentrated in just 3-5 firms.
• Core insight: The primary opportunity is not reducing the number of firms, but driving consistency and extracting more value from existing partners.

• Significant variation exists across practice groups in managing invoice review, budgeting, and rate increases.
• Variation stems from lean department structure and limited central coordination.
• Impact: Inconsistent management leads to missed opportunities for department-level leverage.

2

Strategic Recommendations

Proposed levers for program optimization

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Commercial Discipline Focus on firm selection, matter budgeting, invoice review standards, expense pre-approval thresholds, rate increase review, and AFA principles.

Relationship Discipline Focus on performance tracking, feedback loops, engagement letter expectations, marketing use cases, and relationship governance.

• Billing Enforcement: Deploy third-party, AI-enabled capability for invoice/budget compliance and rate benchmarking. Provides measurable savings with low business disruption.
• Preferred Counsel Program: Tiered system for top 10-12 firms. Includes rate caps, performance reviews, and volume discounts in exchange for preferred access and higher visibility.

April - May: Design Phase Finalize vendor evaluation and define preferred counsel criteria. May - June: Preparation Establish governance, set performance metrics, and prepare internal communications. July 1: Launch Date Official program launch and implementation of new standards.

Steering Committee Alignment

Seeking alignment on program direction and authorization to initiate implementation design.

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