Corporate legal spend as a proportion of company revenue hit a six-year low in 2026, according to a new report from the Association of Corporate Counsel and Major Lindsey & Africa.
The 2026 ACC Law Department Management Benchmarking Report found that median legal spend for global companies as a percentage of revenue – a key measure of legal cost efficiency – fell to 0.43% from 0.53% a year ago, the lowest level in six years. The report noted spend does vary across industries, with the highest spend relative to revenue being those that are heavily regulated or have complex IP needs or high transaction volumes.
At the same time, workloads are intensifying. The median number of employees supported by each lawyer rose to a high of 367, a steady increase from 300 in 2021. While the number of lawyers per $1bn in revenue decreased to three in 2026 from a ratio of between 3.6 and 4.2 lawyers over the previous five years – a key measure of in-house legal staffing efficiency, and underscoring the trend of legal teams being expected to do more with less.
However, legal spend on outside counsel increased slightly in 2026 as a proportion of overall spend, rising to 47% from 45% a year ago. Larger organisations were more likely to tilt spending towards external providers, the report noted.
Alternative legal service providers and technology accounted for only 3% and 5% of legal spend respectively, highlighting limited budget flexibility when it comes to innovation.
Some 42% of legal departments now use contract or temporary staff, though that trend is more prevalent among larger companies (74%), while 25% of in-house teams are using alternative fee arrangements when paying for outside counsel (the vast majority of those as fixed/flat fees).
Greg Richter, global vice president for in-house counsel recruiting at Major Lindsey & Africa, said: “The data tells the same story we see with our clients every day. Legal departments are being asked to take on more strategic responsibility, but they aren’t necessarily getting the investment to support that increased mandate.
“That’s why this data is so powerful for building the business case for investment and ensuring the right team and appropriate resources are all aligned to drive value to the broader business.”
The report is based on data from 576 legal departments in 45 countries.
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