Survey: Law Departments Cut Total Legal Spending for 1st Time in 10 Years
For the first time in 10 years, in-house legal departments have cut total spending, according to a new survey.
And more than 60 percent of the 252 survey participants decreased outside counsel spending in 2008 and 2009, according to the Hildebrandt Baker Robbins 2010 Law Department Survey.
Total legal spending was down 1 percent overall in the U.S. and 2 percent worldwide. Over the past nine survey years, U.S. legal spending had increased each year between 5 and 9 percent. However, inside legal spending actually increased by 1 percent in the U.S. and 2 percent worldwide. Two-thirds of law departments either increased their staffing levels or kept them the same. In the U.S., 51 percent of participants anticipated that staffing levels would stay the same, 41 percent expected an increase, and 8 percent expected a decrease.
“Most law departments do not appear to be reducing staff as a cost-savings measure,” survey editor Lauren Chung said in a press release (PDF). ” Many departments are seeking to enhance their internal capabilities to do even more. As a result, significant decreases in inside legal staffing are unlikely.”
Outside counsel spending dipped 5 percent in the U.S. and 6 percent worldwide. Global nonlitigation spending (minus intellectual property costs) decreased the most at 14 percent.
When survey participants—30 percent of which are companies with more than $20 billion in revenues and over 65 percent of which have revenues at or above the Fortune 500 level—were asked to forecast their legal services needs across practice areas, they cited regulatory (44 percent) employment and labor (39 percent), government relations (35 percent) and international (35 percent).
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