Only one in five legal matters sent to outside counsel stays within budget.
That finding from Gartner should stop every General Counsel in their tracks. Not because external firms are careless, but because it confirms what many legal teams already experience day to day. Cost overruns are rarely caused by a single bad decision. They are the predictable result of how matters are scoped, instructed and managed from start to finish.
This is essentially not a pricing problem. It is a matter management problem.
The Real Reason Budgets Fail
Most external legal matters do not fail on cost at the end. They fail at the beginning.
Gartner’s research shows that fewer than half of in-house lawyers fully understand the budget range for a matter when it is instructed. Only slightly more understand timelines or goals. When scope is unclear, expectations are loosely defined and oversight is inconsistent, budgets become aspirational rather than operational.
In this environment, outside counsel fill the gaps. They make assumptions, duplicate effort, and respond to shifting instructions as best they can. None of this is malicious. It is simply what happens when a matter is not actively managed.
The cost impact is significant. Gartner estimates that the average legal department spends $162,000 a year on duplicated effort between in-house teams and external firms. This can be viewed as a waste of resources and linked directly to a lack of clarity and coordination.
Why Traditional Cost Controls Fall Short
When spend increases, the default response is familiar. Renegotiate rates. Move work to lower cost firms. Reduce external reliance.
These actions can help at the margins, but they do not address the root cause of budget blow-outs. They focus on who is doing the work and how much they charge for their time, not how the work is being run.
A discounted hourly rate does not protect you from scope creep. A new panel firm does not fix poor briefing. Lower cost providers still struggle when expectations are unclear and decisions are delayed.
Without consistent matter management, legal teams are simply changing suppliers, not addressing the underlying issues.
What Active Matter Management Actually Means
Active matter management is not about micromanaging law firms. It is about managing the matter itself, consistently and deliberately, across its full lifecycle.
That starts with proper scoping. Clear objectives. Defined success criteria. Getting clear on assumptions, service levels and risk tolerance. A realistic budget range tied to those parameters.
It continues with ongoing oversight. Tracking progress against scope. Monitoring budget versus actual spend in real time. Addressing changes to scope of work early rather than after the fact.
And it ends with evaluation. Reviewing outcomes, performance and learnings so future matters start from a stronger position.
Gartner’s research is clear. Lawyers who practise active matter management are twice as likely to keep matters within budget. Yet many teams still rely on individual habits rather than shared standards or technology to support consistent processes.
The General Counsel’s Role in Setting the Standard
Active matter management breaks down when expectations live in people’s heads and data lives in disconnected systems.
General Counsel sits at the intersection of people, process and technology. Their role is to ensure all three are aligned.
Process consistency is the starting point. Legal teams need a shared way to instruct, scope, manage and evaluate matters. Without it, each lawyer will take a different approach based on their experience and practice, leading to uneven oversight and unpredictable cost outcomes. Consistency does not mean rigidity. It means agreeing on the minimum standards that apply to every matter, regardless of size or firm.
Technology is what makes that consistency achievable at scale. It provides a single source of truth for matter information, budgets, status and performance. It replaces fragmented emails and spreadsheets with structured data that can be relied on. Most importantly, it makes expectations visible to everyone involved, from in-house teams to external firms.
When process is embedded in technology, good practice becomes the default rather than the exception. Budget ranges are captured at the start. Scope changes are recorded as they happen. Progress is tracked against agreed milestones. Data is updated in real time, not reconstructed at the end of the matter.
This also changes how people work. Lawyers spend less time chasing updates and more time making informed decisions. Outside counsel are clearer on what success looks like and how they will be measured. Conversations shift from explaining overruns and disputing invoices to collaboration and strategy.
People still matter. Technology does not replace judgement or accountability. General Counsel need to set expectations that active management is part of the role. Training, reinforcement and leadership support are critical to building confidence and capability across the team.
The payoff is alignment: aligned processes, aligned data and aligned behaviour. When everyone is working from the same information and the same playbook, cost control becomes a core aspect of how matters are run, not a separate exercise at the end.
Bringing Matters Back Under Control
External legal spend will always involve complexity, judgement and change. No system removes that reality.
What does change outcomes is how matters are managed from the outset. Gartner’s research reinforces that passive oversight leads to predictable failure. Active matter management, supported by consistent process and reliable data, delivers better control and fewer surprises.
For General Counsel, the challenge is not choosing between people, process or technology. It is aligning all three. Setting clear expectations. Giving teams the tools to manage matters properly. Creating visibility that supports informed decisions rather than post matter explanations.
When that alignment exists, cost control stops being reactive. Budgets become more accurate. Conversations with firms become more commercial. Legal teams spend less time explaining overruns and more time delivering value to the business.
That is how external legal matters stay on track. Not through pressure or discounting, but through disciplined management supported by the right systems and behaviours.
Lawcadia is a legal technology company with a cloud-based platform that in-house legal teams and their law firms use to manage intake, matters, engagements, RFPs, and spend. It enables users to be more efficient, control processes and spend, and have visibility across the legal function.
An award-winning, easy to implement, intuitive and affordable end-to-end legal operations platform, Lawcadia incorporates no-code workflow automation and logic-based processes with a collaborative and secure interface.
Clients include corporate and government legal teams and over 150 law firms.
Founded in 2015, Lawcadia is headquartered in Brisbane, Australia with clients in Asia-Pacific, UK and the US.
