Legal fees cut by better law dept management

By Neasa MacErlean

11 November 2013 at 17:22 BST

Legal departments are saving costs by introducing programmes to analyse law firm panels, introducing budget reviews and demanding alternative fee arrangements.

Litigation is the most common reason for rising legal costs, according to Huron survey Bangkokhappiness

Some 41 per cent  of law departments surveyed by Huron Consulting expect legal spend to increase in the next year, rising to 65 per cent among companies with revenue over US$10bn. Huron Consulting has carried out its annual IMPACT® Benchmarking Survey among 71 different legal departments in US and global organisations. It found that those with 'comprehensive management programmes' designed at keeping costs down were spending 30 per cent  less overall and 38 per cent less on external legal costs than peers with no such programme. Those most successful in keeping down costs used defined outside counsel panels, regular budget reviews, matter level budgets, alternative fee arrangements and e-billing technology, the research found. The most commonly mentioned reason for rising costs is litigation (cited by 72 per cent), followed by complexity of workload (55 per cent) and going to external lawyers (50 per cent). 

Ehtics and compliance issues increase

However, for the first time in three years, litigation was not the most commonly indentified matter type for which spend was expected to increase. Instead, ethics and compliance matters headed the list with 43 per cent saying they expected costs to rise in this area. Nearly two in five (39 per cent) saw increased spend in merger, acquisition and diverstiture work. The survey also identified shifting priorities with ethics and compliance increasing in importance relative to other business priorities, with it rated as the highest law department busienss priority in 2013. Source: Huron.


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