The 2015 Chief Legal Officer Survey was conducted in September and October of this year by Altman Weil. It has found that around 40 per cent of CLO respondents are planning to reduce the amount their departments spend on outside counsel in the coming 12 months, almost double the percentage of CLOs who reported plans to increase their spend. Of those looking to reduce outside spending, 73 per cent indicated that some of the outside workload would instead be assumed by in-house legal staff, while 13 per cent will use vendors. Nine per cent will use contract lawyers to cover work previously performed by law firms. While in 2014 only 29 per cent of those law departments planning to decrease their outside spend indicated that some of the decrease would reflect work that they no longer needed to do, this percentage has increased to 49 per cent in 2015.

Five-year trend

The lean towards decreasing outside counsel expenditure now reflects a five-year trend in the annual survey's results. According to the report, internal and external cost pressures were the most frequently cited challenges facing CLOs in managing their departments during 2015.

Good news among in-house teams 

While the downturn in outside spending by in-house departments may spell trouble for law firm revenues, the survey offered reassurance for in-house legal staff. Of those CLOs surveyed, only six per cent reported plans to reduce the number of lawyers employed by their departments in the coming year, with 38 per cent suggesting that increases are planned and 53 per cent looking to maintain lawyer staffing at current levels. The good news continues across other positions. Just 3.5 per cent of in-house legal departments are planning to cull their paralegal headcount, while 22 per cent are planning to increase their paralegal teams. Similarly, while 17 per cent of CLOs reported plans to hire more support staff, only eight per cent indicated that they planned to decrease support positions.

Range of revenue 

Altman Weil invited 1,363 chief legal officers to participate in this year's survey, of which 258 responded. Surveyed legal departments varied greatly in size, ranging from just one attorney to 950, and hailed from companies with profits between $100m and $150bn. The mean annual revenue for those companies whose legal departments were included in the survey was $11.5bn. Of those CLOs who responded, 69 per cent work in the legal departments of public companies. Sources: Altman Weil; Bloomberg Big Law Business