Spending data on Australian law departments from 2005

In February 2006, Mahlab Recruitment and Harris Cost Lawyers surveyed the members of the Australian Corporate Lawyers Association (ACLA). Most of the legal teams — the report does not discuss numbers of lawyers — were 10 or fewer people, which translates typically into five lawyers or less at the normal ratio of one lawyer for every non-lawyer. The report states that the average internal budget was $400,000, which seems extremely modest if there is something like two or three lawyers in that average department.

Even more astonishing, half of the respondents indicated that other corporate departments separately budget for legal costs (at 9). The average total legal cost paid by those other departments was $200,000. If you compare that figure to the average costs paid to an external counsel by the law department — $350,000 — you would conclude that the typical Australian law department controls only half of its company’s outside counsel spending.

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