The economic downturn could have the beneficial effect of getting everyone on the legal team to keep cost considerations top of mind in a way they haven’t had to before, the head of legal operations for fintech giant Stripe says.
“It brings everyone’s attention to cost issues regardless if you’re in legal ops or finance,” Jamie Ingles, legal ops lead at the fast-growth company, said in an Inside Voices webcast. “When there’s a slowdown … it’s forcing people to take more accountability for their budget and the investments they’re making.”
Ingles joined Stripe in 2020 as the company’s first dedicated legal ops person. “It was all about law firm spend,” she said.
Her team has since grown to six people and along with the focus on how much the company is spending on outside law firms, it’s trying to get a handle on all of its vendor spend as well as what changes to make to its technology stack.
“Our technology is really around self help,” she said. “Some of that is automation, workflow management, etc. We’re looking at our eDiscovery stack, too. So, these are core areas we’re focused on.”
Outside firm spend
Improving the legal team’s spend on outside law firms is a “forever” job that begins with simply gaining visibility into how much each of the firms is getting, slowly introducing alternative fee arrangements where that makes sense and reassessing the mix of in-house vs. external talent.
“At this point, nothing would surprise me” when it comes to law firm bills, she said.
The legal team’s effort to introduce more alternative fee arrangements must come slowly because it takes time for law firms to adjust to that.
“It’s a lot harder to do in the legal space than what I experienced in the professional consulting services space,” said Ingles, who worked for almost 16 years at Hitachi Consulting before moving to cloud technology company Snowflake and then Stripe.
It helps that, with improvements to its digital billing system, the legal ops team can get a more granular look at what firms are getting for what work, but it’s not just about saving money, she said; it’s about making strategic decisions on the kind of expertise it wants to keep in-house vs. what it wants to leave to outside help.
“Some factors we consider besides team bandwidth or level of urgency is whether the body of work we’re talking about has a tail,” she said. “Is it ongoing? Is it a subject matter or bandwidth that will stand the test of time? Or, if it has a start and end date, is that something we should just outsource temporarily? Or is it something a few people on the team can pick up? A third party might be able to scale up and scale back [more quickly than in-house can]. These are all factors. One part is the operating expense model and the other part is the philosophical, business justification.”
Because Stripe operates in a heavily regulated space, compliance takes a major resource commitment and the balance between in-house and external expertise is crucial.
“We’re starting to dig into whether we’re using the right vendors, and if they’re the right vendors, we’re trying to do comparisons around the rates we’re getting or even if we’re asking them to do the right thing,” she said. “We’re trending into a period of being more strategic in these sorts of decisions.”
Ingles feels her team has made progress getting a handle on costs, finding ways to optimize the legal team’s resources and getting better visibility into spend to know which levers to pull as conditions change. But they’ve still just scratched the surface in many respects, she said.
“Over the last six to nine months, we’ve highlighted pockets of where we should shine a light,” she said. “That’s not trying to tackle everything, but looking at those big pockets, and understanding if there are optimization opportunities, or if there are opportunities for improvement because things are broken. That can be vendor pricing. We have a team member that’s spent a great deal of time digging into the rates we’re getting from our law firms. It seems basic, but it takes a ton of time when you have the portfolio of firms that we do, and when there hasn’t been the attention given to it before.”