It’s common for companies expanding through acquisitions to outgrow their in-house capabilities. This is often the case with legal services during acquisitions, when company management might turn to their private equity firm for due diligence and other guidance.

Going forward, it’s not unusual for those companies to continue to work with the same outside counsel on other legal matters. The challenge here is that by continuing to contract with a large,
full-service law firm, companies may be paying for bandwidth and capabilities they no longer need.

Some larger private equity firms have addressed this concern with a variable cost, or “on demand,” model, especially for routine services. This “managed service” approach allows companies to bring in attorneys and legal experts and pay only for the time and talent they need – tax lawyers for tax issues, human resource lawyers for personnel challenges, etc.

By augmenting the in-house legal group with temporary staffing and subject-matter expertise,
companies can manage peaks and valleys without the expense of keeping a full-service law firm
on retainer, and reallocate the savings to other pressing needs. Hear more on this issue in our
podcast featuring Protiviti Managing Director Rob Gould and Robert Half Managing Director
Joel Wuesthoff.

For more information, visit www.protiviti.com/private-equity.

Transcriptions of Powerful Insights are available upon request from kevin.donahue@protiviti.com