Good compliance cuts legal costs.

• Position: COMPLIANCE

"When it comes to how, much a company spends on legal expenses, its not the company's size that matters, but rather the practices and policies it has in place for compliance.

A recent survey of 235 U.S. firms by the IT Policy Compliance Group (IT PCG) revealed that, by following best practices, a company with $25 billion in annual revenue can expect to spend only about $500,000 a year more than a $500 million company demonstrating the worst practices. Even more interesting, best practices greatly reduce the total annual cost of legal fees and settlements, the survey said.

"The differences in performance outcomes in terms of spend were not related to size of company or industry grouping," said Jim Hurley, IT PCG managing director, "but what we did find were differences in outcome by spend were very related to practices."

Of course, larger organizations always will have to contend with more lawsuits and regulatory issues just because of their size. However, the survey found that, regardless of size, companies following best practices when it comes to compliance issues spent a smaller amount on legal fees than those following the worst practices. (See the bar chart for comparative figures.) Firms following what IT PCG describes as "normative" practices still spent just roughly a third of what their less-diligent counterparts spent.

According to the report, best-performing firms employ the following practices:

* Notify affected employees of...