Peek Inside the In-House Counsel Suite
A smart way to generate more business for your law firm is to know what’s going on with your corporate “customers.” Here’s a peek at what’s happening in corporate in-house counsel suites so that you can maximize your business development efforts.
The survey “Law Department Metrics Benchmarking Survey” was conducted by ALM Legal Intelligence (see http://bit.ly/9tqy2P), which has monitored trends of in-house legal performance since 1972. The survey is based on data collected from 61 US companies throughout 2009, in a dozen industries, with annual revenue of less than $100 million up to $5+ billion.
Six trends affecting corporate clients
Trend No. 1: Law departments are getting bigger or staying the same size. According to the survey, 32.8% of respondents have reduced the size of their law department in the last 12 months. The key takeaway here is that 67.2% of departments are bigger or the same size. This means that more corporations are taking work in-house and staffing up to do so.
Trend No. 2: In-house lawyers are working harder. 70% of in-house lawyers say their workloads have increased during the past 12 months. This underscores Trend No. 1, that work is staying in-house. What this means to law firms is that there is less demand for routine corporate legal services like environmental, tax, real estate, corporate and patent prosecution matters.
Trend No. 3: In-house law departments have had their budgets cut. According to the survey, 62.3% of law departments implemented budget cuts in 2009. This means the lawyers at a potential corporate client are doing more with fewer resources. It’s an awful position to be in. A law firm that could ease the pain of in-house counsel would be welcome indeed.
Trend No. 4: A majority of a corporate law department’s budget is for fees for outside law firms. According to the survey most companies spend 58% to 65% of their budget on outside law firms. This is good news, because it means there are fees to be earned from the overburdened law departments.
Trend No. 5: The higher a company’s revenues, the more law firms it uses. As you can see from the chart below, the sweet spot is companies that have annual revenue of $5 billion or more:
Trend No. 6 – Companies are paying fees to outside counsel in alternative fee arrangements. Roughly 20% of companies are spending 37% of their legal fees in alternative arrangements.
To read what kind of files are most commonly referred, and to read my Five Tips to Get More Corporate Work, please visit the LawMarketing Portal at www.lawmarketing.com.
