How to Make a Business Case for Expanding Your Legal Team Headcount

Expanding the headcount of your legal team is a significant decision that requires a well-structured business case. You must persuasively argue why additional resources are necessary, align the request with your organization’s strategic objectives, and demonstrate the potential return on investment (ROI). Here’s a step-by-step guide to building a compelling business case for increasing your legal team headcount.

1. Define the Business Need

Begin by clearly articulating why your organization needs to expand the legal team. This section should focus on identifying the current team’s gaps and challenges. Consider factors such as:

Increased Workload: Qualify any significant increase in the volume of legal work, such as more contracts to review, regulatory compliance requirements, litigation cases, or mergers and acquisitions. What is the cost-benefit analysis of managing the function in-house vs. working with a law firm?
Specialization Needs: Explain the need for specialized legal expertise that is not currently available within the team, such as intellectual property law, international trade regulations, or data privacy.
Risk Management: Discuss how the current team’s limitations may expose the company to legal risks, such as non-compliance with laws, potential lawsuits, or insufficient contract review processes.

2. Quantify the Demand

Use data to support your case. Quantifying the demand can make your argument more persuasive:

Workload Metrics: Provide statistics on the number of cases handled, contracts reviewed, or compliance issues managed over a specific period. Compare these figures to industry benchmarks if available.
Response Times: Show how current legal staffing levels impact response times for legal issues. Highlight any delays in contract reviews, litigation responses, or compliance activities.
Cost of Current Issues: Outline the financial impact of current legal issues, such as fines, litigation costs, or lost business opportunities due to delays.

3. Outline the Benefits of Expansion

Clearly describe the benefits of expanding the legal team. Focus on how additional resources will positively impact the organization:

Improved Efficiency: Explain how additional staff can streamline legal processes, reduce bottlenecks, and improve overall efficiency.
Risk Mitigation: Illustrate how more robust legal support can mitigate risks, ensuring better compliance and reducing the likelihood of costly legal disputes.
Strategic Support: Highlight how a larger legal team can support the organization’s strategic initiatives, such as entering new markets, developing new products, or acquiring other businesses.

4. Calculate the Return on Investment (ROI)

A critical part of your business case is demonstrating the financial justification for the additional headcount:

Cost Savings: Estimate the cost savings from avoiding legal penalties, reducing litigation expenses, and preventing costly contract mistakes.
Revenue Impact: Show how faster legal processes can lead to quicker deal closures, allowing the company to capitalize on business opportunities sooner.
Efficiency Gains: Calculate the potential increase in productivity (quality and quantity) and how it translates into financial benefits for the company.

5. Provide a Detailed Plan

Offer a detailed plan on how you will implement the headcount expansion:

Hiring Plan: Describe the roles and qualifications needed for the new hires and outline the recruitment process. (See a General Counsel’s Guide to Hiring Exceptional Talent on the Princeton Legal Search Group Lawyers Career Blog)
Onboarding and Training: Describe how you will onboard and train the new legal team members to ensure maximum efficiency.
Budget: Provide a detailed budget for the expansion, including recruitment costs, salaries, benefits, and any additional resources needed (e.g., office space, technology).

6. Address Potential Objections

Anticipate potential objections from stakeholders and address them proactively in your business case:

Cost Concerns: Look at your outside legal spending. Will the lawyer you hire reduce the outside legal spending by 30% or more? If so, this may be your most effective argument.
Generally speaking, one or more lawyers won’t eliminate the need for law firm counsel, but depending on the size of your outside counsel spend, the cost reduction might cover the salary of hiring a lawyer.
Acknowledge the cost implications but reinforce the long-term benefits and ROI. In-house counsel can more adeptly, accurately, and quickly identify the problem and legal business solution in the context of the business need and the overall business strategy.
Resource Allocation: Justify why investing in the legal team is a priority compared to other departments or initiatives.
Implementation Risks: Discuss any risks associated with the expansion and how you plan to mitigate them.

7. Present Your Case to Stakeholders

Finally, present your business case to key stakeholders in a clear, concise, and compelling manner:

Executive Summary: Start with an executive summary that encapsulates the key points of your business case.
Visual Aids: Use charts, graphs, and other visual aids to make your data and arguments more accessible. (See Business Case Planning Guide.)
Engage Stakeholders: Be prepared to engage in discussions, answer questions, and address concerns.

Conclusion

Building a business case for expanding your legal team headcount requires a thorough understanding of your organization’s needs, a data-driven approach to quantify demand and benefits, and a clear implementation plan. You can make a compelling argument that aligns with your company’s overall objectives by demonstrating how additional legal resources will drive efficiency, mitigate risks, and support strategic goals.

See the Business Case Planning Guide.