In-House Counsel

Corporate legal departments spend more in-house than on outside law firms, survey finds

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Corporate legal departments are spending 54% of their budgets in-house, outpacing their spending on outside counsel, according to a survey released last week by the Association of Corporate Counsel and legal recruiting firm Major, Lindsey & Africa.

The spending is a shift from a near 50-50 split last year, according to an executive summary. The survey is available here.

Since last year, more corporate legal departments are shifting work in-house in the areas of due diligence (up 6%), labor and employment (up 6%), legal research (up 5%) and intellectual property (up 4%).

Corporate Counsel covered the findings and spoke with Gregory Richter, a New York-based partner at Major, Lindsey & Africa.

He said the average split more than a decade ago was 60% on outside counsel and 40% on inside spending.

“Now, it’s crossed over that 50-50 mark, which is something I don’t think I could have predicted 10 years ago,” Richter said.

Richter told Corporate Counsel that the shift to more in-house spending is due to factors that include the COVID-19 pandemic, new regulations, increases in mergers and acquisitions, and a complex global economy.

“There’s just a lot more legal work that’s fallen on the desks of general counsel,” he told Corporate Counsel.

The survey findings are based on responses from 427 legal departments in companies of all sizes in 24 industries and 26 countries. The percentage of in-house legal spending was higher for the smallest companies, at 57%, Corporate Counsel reported. The largest companies spent only 46% of legal dollars in-house.

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