Since the fall of 2011, chief legal officers have tried various techniques to control legal department costs at their U.S. companies. They negotiated price reductions with outside counsel, improved efficiency of internal procedures, shifted legal work to in-house lawyers and to less costly firms, and reduced the amount of work sent to outside counsel, among other things. That’s according to results made public today in the Altman Weil 2012 Chief Legal Officer Survey. Altman Weil is a legal consulting company based in Newtown Square, Pa.
To reduce costs, 71.1 percent of the chief legal officers who participated in the survey said they negotiated price reductions, while 62.9 percent said they improved efficiency of internal procedures — primarily through technology — and 46.9 percent said they moved legal work in-house.
As for the most effective means of reducing legal department budgets, 22.7 percent of the chief legal officers said they cut costs by negotiating price reductions with outside counsel, and 21.1 percent said shifting work to in-house lawyers was the most effective.
As for law department budgets, 46.3 percent reported a budget increase over last 12 months, but only 34.2 percent reported a larger outside counsel budget. That compares to 55.8 percent reporting a budget increase a year ago, along with 45.8 percent reporting a larger outside counsel budget, according to the 2011 survey.
And here are the top service improvements and innovations the chief legal officers most want to see from their outside counsel: greater cost reduction (58.9 percent), non-hourly based pricing structures (53 percent), more efficient project management (53 percent) and improved budget forecasting (52.4 percent).
For the 2012 Chief Legal Officer Survey, which is the 13th annual, 204 of 1,297 chief legal officers at U.S. corporate legal departments participated in the survey, which was conducted during September and October.
— Brenda Sapino Jeffreys