Reading this report on the BTI Consulting annual survey of General Counsel prompts a couple of thoughts. Firstly, internal legal spending has increased significantly over the last 3 years, but that doesn't mean external legal spend has decreased - quite the opposite, in fact, even if the rate of growth must continue to vex managing partners across the world.
So are companies achieving any real efficiencies from their in-house teams or is the boom in spend merely a reflection of an increasingly complicated regulatory and legal environment, requiring more internal legal staff in addition to the continuing external legal spend?
Secondly, it is interesting that litigation remains such a large item on the balance sheet. It is even more interesting (if I interpret the article correctly) that in-house counsel want to keep such work rather than instruct externally. It strikes me that if private practice law is not making the case for efficiency, risk management and independence as compelling reasons for outsourcing such work, then that external spend is unlikely to increase markedly any time soon.
The answer may lie in external firms offering an increasing unbundled services - such as handling e-disclosure or dealing with costs enforcement - to facilitate the higher level work conducted by the in-house lawyers.
Meanwhile, in-house legal departments are growing. The report shows a 27% increase in the size of corporate legal departments over the past three years.Rynowecer told the Gazette there are now ‘some of the best opportunities for in-house lawyers that there have been for 30 years.‘Some managing partners of law firms are leaving to become global corporate counsel.’