According to the HBR Consulting 2015 Law Department Survey, total worldwide legal spend is up by two percent, and it’s due to an increase in spend on in-house counsel. Meanwhile there was a decrease in outside counsel spend, which can be attributed to the engagement of cost-management programs and “aggressive measures,” including the consolidation of firms and employing of analytics, AFAs and detailed budgets.
Per Kevin Clem, at the helm of HBR’s Law Department Consulting practice, the increase in internal spending is due to “law departments are prioritizing internal operations, hiring internally, investing in new or upgraded technologies and raising total compensation for their employees.”
The investment in “new or upgraded technologies,” available to address a variety of areas within a legal department, play a significant role by increasing efficiency and effectiveness, which add up to cost savings. This might be of particular interest to the 76 percent of survey respondents who forecasted an increase in legal needs in the coming year.
While the total worldwide legal spend on in-house counsel increased, spend on outside counsel remained flat compared to 2014 when it decreased by two percent. As legal departments are increasingly asked to do more with less, it will be interesting to see if legal spend is affected and in what ways.