Law Departments Increasing Staffs

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According to the 2011 HBR Law Department survey, more and more firms are relying on in-house staffers to deal with legal functions and the continuing growth of legal demands in today’s world. Firms are relying on larger in-house teams instead of outside counsel, which helps the firms save money. A statement released by HBR discusses the following regarding the survey:

“Law departments are recognizing that they can do more with less by building up their in-house capabilities. The Survey shows that 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.”

  

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Key data from the HBR survey includes the following:

• More than 50% of participants reported an increase in the total number of legal staff worldwide between 2009 and 2010, while only 29% reported a decrease.
• More than 80% of participants commented that their company’s legal needs are increasing.
• More than one-third attached high importance to increasing the number of in-house lawyers; only 11% responded that they would increase the use of outside counsel.
• More than 40% of companies expect to increase the number of lawyers in the U.S. and outside the U.S. during the coming year.
• The median expected increase in lawyer staffing was 10%.

Senior Director and Survey Editor Lauren Chung added the following about the data gathered in the survey:

“This finding serves as one of the important considerations in building a business case for adding more in-house counsel to handle the increasing workloads. We are hearing from our consulting clients across industries that they are limiting the use of outside counsel to high profile matters or specific areas of expertise rather than to support the growing volume of work. With the rising cost of outside counsel, we expect this trend will continue.”

Jonathan Bellis, the head of the HBR Law Department Consulting practice, added the following:

“It is no surprise, in view of these trends, that law departments are highly focused on their efficiency and effectiveness in delivering and managing legal services. Chief Legal Officers and General Counsel are under unprecedented scrutiny, both internally and outside the company. Much of our law department consulting work involves helping clients identify and achieve opportunities for better performance in legal risk management, operational excellence, cost management, and client service delivery.”

The survey showed that legal spending has decreased by one percent on a worldwide scale but there was no change in spending in the United States from 2009-2010. The legal spending median value was $29 million worldwide and $25 million in the United States. The survey reported that the median company has 26 lawyers working worldwide and 22 lawyers working in the United States. The median number of law department staff members worldwide is 55 and 46 in the United States. The legal staff consists of lawyers and non-lawyer members of the staff. The survey compiles data on such areas as legal spending, staffing, organization, compensation and management practices.