A statistical coincidence between law-firm disbursements and law-department expenses?

For most matters where outside counsel have been retained, the disbursements of the firms cluster around 10 percent of their total billings. At the same time, of the total outside spending by a law department, roughly seven or eight percent of it goes to service providers other than law firms (See my post of May 30, 2006 regarding the business ecosystem of law.). If you were to treat airfare for inside counsel (and related lodging and travel expenses) as an additional service provider, and add in the expenditures during a year of a typical law department on matter-related flights, it would not surprise me if the law department percentage for “disbursements” reaches approximately 10 percent.

It’s as if law departments were law firms and their out-of-pocket expenses coincidentally equal the pass-through expenses of law firms.

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