28 November 2018 at 17:11 BST

Law departments increasing spending but reducing cost

New report suggests law departments increasing spending but still pursuing reduced costs and enhanced operational efficiency.

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Global organisations are reporting increased legal needs and total spend increases of 5 percent, according to the 2018 HBR Consulting (HBR) Law Department Survey.

2019 spend to increase

The last four years of the survey has revealed flat results or 1 to 2 percent increase in total legal spending, but this year’s increase is driven by internal and external factors, as respondents cited a 3 percent median increase in both in-house and outside counsel spending. The majority of law department respondents (81 percent) expect their legal needs will continue to increase in the next year, citing commercial contracts, regulatory compliance and M&A as the top practice areas they expect to require legal attention in the next year.

Investing in talent

HBR managing director Lauren Chung said, ‘internally, law departments are investing in talent and technology. Externally, we are seeing increases in hourly outside counsel rates that are fueling spending levels.’ Sixty-one percent of the survey respondents indicated an increase in hourly outside counsel rates. Ms Chung explained that at the same time, the allocation of external spend appears to be shifting, ‘we see an increased reliance on non-law firm providers in areas traditionally handled by outside counsel, signaling an emphasis on exploring innovative legal service delivery models’

 
   
 
 
 

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