Summary 03
Legal Departments Want Effective Legal Spend Management Solutions, But Implementation Lags Far Behind
Perhaps unsurprisingly in view of the prevalent anxiety around spending, our survey found that over 70% of in-house counsel believe that percentage and dollar reductions in monthly outside counsel spending would be a valuable metric for their legal department to track:
This is what we found when we broke out the Question 8 data by annual outside counsel spend (percentage desiring spending metrics for outside counsel):
65%
Up to $1 Million
71%
Between $1 and $5 Million
92%
Between $5 and $10 Million
87%
Between $10 and $20 Million
68%
Over $20 Million
"There is a perception among smaller companies that the effort put into tracking such metrics would not be [worthwhile]"
We were very interested to learn that there is a real spike in interest in tracking outside counsel spending metrics within companies spending between $5 and $20 million per year on outside counsel. Perhaps there is a perception among smaller companies that the effort put into tracking such metrics would not be worth whatever time and effort might be needed to implement such tracking. In-house counsel at larger companies (with over $20 million in annual outside counsel spending) might feel “less personal” about their department’s expenditures on outside counsel, as compared to those in smaller, possibly tighter-knit legal departments.
As revealed by follow-up questions, the clear desire for legal spending metrics has generally not resulted in actual use of such metrics. In fact, we were surprised to find that about three-quarters (73% - Q9) of legal departments have no system at all for managing outside counsel spending.
An important takeaway for in-house counsel is that they should educate themselves on the solutions available for managing and reducing outside legal spending. Working in a department traditionally viewed as a “cost center,” in-house counsel should also consider how appreciative their management might be if they come up with a way for the legal department to save money, rather than spend money.
A nice question to ponder: