Consilio’s 2016 Law Department Benchmarking Performance Series – Survey No. 1: Foundational Metrics, the seventh conducted in alliance with the Texas General Counsel Forum, aims to assist law departments in leveraging people, processes and technology to find beneficial solutions, and fine-tune internal operations. Although the occurrence of particular industry segments and revenue sectors changes year to year with the survey participants – the trends demonstrated and the challenges faced by law departments appear to remain universal. In light of past Benchmarking Survey Reports, many best practices have been widely adopted, such as dedicated law department operations managers, e-billing and matter management systems, matter-level budgeting and preferred provider programs. Now law departments are embarking on new initiatives that target specific issues, enabling them to meet the demands of a fast-changing legal environment.

Highlights

Slight Increase in Legal Spend

On average, law departments increased their spend, but at a lower rate than previous years. The average change in legal spend from 2015 to 2016 was 0.4%, as compared to an increase of 1.7% from 2014 to 2015. While the majority of respondents reported an increase, 42% reported a decrease in legal spend. More notably, for the first time ever, respondents are expecting a slight decrease in legal spend in the coming year.

 

Law Department Headcount Growth & Variations

Law departments continue to grow in size, with an increase in the median number of attorneys per billion dollars in revenue. The number of attorneys in a law department, how they are organized and their reporting structures vary with
company size.

As law departments grow, they may be able to focus on matters with less assistance from outside counsel. The median number of law firms used decreased from 55 to 51 firms in the last year. Decreasing use of outside counsel presents the opportunity to spend more on internal growth or to focus spend on specialized third party provders. However, nearly all survey respondents reported that the vast majority of external legal spend was still paid to outside legal counsel. Externally, law departments still have the opportunity to improve how they fine tune the delivery model and systematically measure value.

For more information about the Law Department Benchmarking Performance Series or our solutions to assist law departments on their challenges, contact Robin Snasdell at rsnasdell@consilio.com.

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