Hypothesis

Any financial analysis of the Litigation Support Department should evaluate the department as if it is an independent company -- as if it is a vendor to the law firm rather than an internal support group. This is because the department should operate exactly as a business. Only through this method can the department provide the highest level of goods and services to each legal team and the lowest operational costs to the law firm and clients.

The Approach

The Litigation Support Department should charge for time (technical and project management), hosting (storage) and the products they manufacture, such as CDs. It is in the best interest of Litigation Support to track the accounting numbers associated with each good or service. This is because the head of the department will use accounting reports to argue for investment by the firm in additional hardware, software and people. The law firm is a business, after all; the people running the business use financial numbers to help make budget decisions. Other types of reports, such as billable time show whether there is enough work to allow the resource to pay for itself. A nominal charge for hosting information can pay for additional storage and backup hardware. The revenue reports illustrate the department's ability to actually pay for these resources.

Benefits

Proper tracking of goods and services provides the Litigation Support Department with ancillary benefits. As an example, through the use of accounting cost codes, the department can identify attorneys who are contracting services without the involvement of the Litigation Support Department. The department can also negotiate better rates with preferred vendors based upon the total amount spent to date.

Forest vs. Trees

Identify Trends

Best Practices