Recession Readiness - Part 2: Defend with Data

As a recession looms, it’s time to demonstrate the value of your in-house legal department. Analyze your service model and let your data do the talking.

The majority of CFOs plan to cut or “closely manage” expenses in 2023. How can in-house Legal Departments protect their headcounts and legal budgets?

To manage recession-related stress, your CFO is looking for expenses to cut. Your Legal Department has a solid ally you might not yet have tapped: your data.

As for a 2023 recession, while pundits wait and debate, your C-suite is certain. Indeed, in a Deloitte survey of chief financial officers, 46% expect a recession, while another 39% expect stagflation.

Unless you are lucky enough to be working for the 15% who foresee “a growing economy with low to moderate inflation,” you should plan for some tough conversations – and start working now to anticipate CFO actions.

In the same Deloitte survey, when asked what actions they would take to prepare for a recession, two answers led the pack:

  • 52% said they would reduce or closely manage expenses
  • 29% said they would control headcount, limit hiring and increase productivity

By contrast, only 12% said they planned to “manage pricing and contracts.”

So, red pens are coming. How can you protect your budget, and most importantly, your people?


Now more than ever, you need to truly understand your Legal Department service model. That means having a clear picture not only of the work you do – but also the way you work. Once you have this clarity, you will be empowered to find opportunities for efficiency – and to act on them before more draconian orders come down.

To get there, you must get into your legal data. When working with CFOs – in particular, highly stressed CFOs – it is imperative to stop working off anecdotes and hunches. It is critical to have real, demonstrable information.

xakia team

We understand that the concept of “data” can be off-putting. You probably didn’t enter the legal profession expecting deep dives into numbers. Here’s the good news: your data already exists, whether in a legal matter management system, like Xakia, or in more traditional repositories (spreadsheets, to-do lists, email inboxes).

Here’s the better news: it doesn’t take any experience, knowledge, or even fondness of statistics. You can gain actionable insights with a very straightforward approach. We like to think of it as the Who, What, When and Why of your work.

Let’s look at the Who. For every legal matter, answer these two questions:

  • Who is it for, i.e., which business units are requesting the work?
  • Who is doing the work?

Once you have these answers, start sorting. Consider a few options for analysis. Some areas that might be highly relevant to your CFO include:

  • Internally, who in your team has excess capacity?
  • As you allocate work between internal and external resources, where could you save money by insourcing work that’s going to law firms? Vice versa?
  • Among your law firms, is your spend appropriate to the complexity, strategic importance and risk of your legal matters – or are you sending too much simple, non-strategic work to expensive law firms?
  • Do you have a large number of dispersed law firms handling small volumes of work? Could there be an opportunity to consolidate and negotiate better rates?
  • Which business units are your “frequent flyers,” and could you decrease the associated workload through training, policy changes or self-help tools?

For ideas on the What, When and Why analysis, check out our e-book, In-House Legal Data Analytics for Beginners to help you get started.

From the Who to the Why, taking this kind of data-driven look at your in-house legal team will enlighten you with new ideas for efficiency, and it will demonstrate that you are taking a sophisticated, business-minded approach to legal operations.

Moreover, by taking the proactive step to analyze your in-house Legal Department on your terms, you and your team may be able to avoid those red pens altogether.

While the likelihood of a recession looms, what should Legal Departments do now?

Download our white paper Four Ways Legal Departments Can Survive (and Thrive) in a Recession to learn how you can prepare your in-house legal team for a looming recession.

Other posts you might like

Legal teams large and small rely on Xakia