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Corporate Legal Department Spend Increases 6% as Clients Boost In-House Capabilities

Posted Oct 11, 2011 4:50 PM CDT
By Rachel M. Zahorsky

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While companies worldwide are spending more on legal services, outside counsel aren’t being shown the money.

Companies spent 6 percent more on their own in-house legal departments in 2010, up from 1 percent in 2009, and decreased the amount spent on outside lawyers by 3 percent in the same year, according to a recent survey of law departments by Chicago-based HBR Consulting.

“Law departments are recognizing that they can do more with less by building up their in-house capabilities,” said Lauren Chung, senior director and survey editor in a press release (PDF) for the 2011 HBR Law Department Survey.

According to the 219 survey participants, of which 70 percent have revenues at or above the Fortune 500 level, "the median fully-loaded inside hourly cost per lawyer is approximately 46% below the median average hourly rate of the company’s top three billing firms," Chung said. More than 80 percent of respondents said that their company’s legal needs are increasing—accompanied by unprecedented scrutiny placed on general counsel to manage and deliver efficient and effective legal services.

"This finding serves as one of the important considerations in building a business case for adding more in-house counsel to handle increasing workloads,” Chung said.

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