56% Of These Dollars Went To Outside Counsel, With Comprehensive Management Programs Leading To Even Less Spending.
As reported by a recent issue of the ABA Journal, the Huron Consulting Group came out with its 2014 IMPACT Benchmarking Report after its fifth annual survey of law departments for 2013, encompassing survey data from 75 companies of varying size and industry.
Overall, legal spending represented .38% of surveyed company revenue in 2013 (“median legal expend as a percent of revenue”), with companies having comprehensive management programs being at .11% and those without being at .21%–a 48% delta if management programs were not used. As far as where the money went, 56% of these dollars went to outside counsel while 5% was paid directly to discovery providers (the latter apparently for e-discovery compliance).
Comprehensive management programs include: defined panels/pre-approved lists for sourcing; matter management and e-billing technology; detailed matter level budgets; alterative fee arrangements; and evaluation of outside counsel adherence to billing guidelines. Interestingly, 57% reported using “big data” and analytics to drive some forms of decision making, mostly commonly to inform decisions about outside counsel fee arrangements and rate negotiations (41%).