Can there be ROI on legal spend?

When I put this question to a couple of Financial Directors they hummed and hawed as to whether legal spend was really an investment.

So I reframed the question.

As a general rule, every business must try to make sure that, for every £1 it spends, it gets more than £1 back.  And that stands (again, as a general rule) for all types of spend whether the spend is categorised as an investment or as something else. For every £1 you spend on an employee, you hope to get more than £1 back, and that should be true of legal spend too.

Does it make any difference if, as a buyer, you look for a return on your legal spend rather than thinking of it as an unavoidable cost?  Yes, it does. Your whole approach would be more demanding. You might even look at different providers of legal services and ask yourself “which of these providers will give me the best return on my spend?”.

You might even analyse the potential return against the 3 reasons that businesses typically spend:

• To increase or preserve revenue;

• To decrease or contain costs;

• To reduce risk.

And to which I would add a fourth (the opposite of risk reduction):

• To increase opportunity.