BTI’s first look at legal spending for 2014 and 2015 shows corporate counsel continue on a 3-year path of bringing work in-house. Larger companies, with $1 billion or more in revenue, are on track to move another $1.1 billion in legal spending in-house.[1] This is on top of the $5.8 billion corporate counsel moved in-house in 2013.
In-house spending appears to be the new growth market. As reported earlier this week in the Wall Street Journal, 58% of companies report making the shift in-house, up from only 50% of companies last year. The work moving in-house includes:
- Regulatory
- M&A
- Securities
- Corporate Governance
- IP/Patent/Trademark
- Contract
Growth in internal departments for the third straight year points to a pervasive trend rather than an idle experiment. Value conscious General Counsel have increasing access to high quality talent—mostly due to today’s job market where many law firm partners make the jump to in-house counsel. Bringing this talent in-house is seen as higher value and more cost effective than using outside counsel.
Despite the lag in growth for outside counsel spending, savvy law firms can use this trend to their advantage.
Most law firms are focused on recouping lost dollars through ramped up business development and new strategic initiatives. A handful of firms are taking a client-focused approach and helping clients bring work in-house. These firms are building a better understanding of their clients’ business and positioning their firm to win coveted new work.
General Counsel have identified 3 approaches law firms can take to secure their position on their client’s core roster:
- Training in-house resources in routine tasks and case assessment
- Facilitate knowledge transfer by granting clients access to research tools and other support systems not typically found in the corporate legal department
- Providing long-term staff assignments to fill missing talent gaps
The ultimate winners make every trend work to their advantage—this is no exception.
MBR/JPD
[1] Based on BTI research conducted between March 2014 and September 2014. BTI conducted more than 300 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations. This new research will be available in the upcoming BTI Corporate Legal Spending Outlook 2015, scheduled for release in October 2014.
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