Questions about statement that law departments in Europe are steadily handing more work inside

“Recent European Lawyer research has found that, on average, the proportion of legal work retained in-house has grown from 42 per cent to 61 per cent over the past five years, and the results of the survey suggest this figure will continue to rise.” The article, which is in European Lawyer, April 2009 at 18, attributes the growth in the proportion of in-house work as "partly the result of technology that enhances the ability of legal departments to project-manage internally and to store and access the required know-how.”

An initial question asks how the proportion, and thus the claimed change, is calculated, a point I have raised before (See my post of Dec. 11, 2006: from the same survey in 2006, “the proportion of work that they send out has decreased from 50% in 2004 to just 36% in 2006, despite strong growth in many areas of legal work”; March 19, 2006: hours inside vs. outside in Canada; and June 10, 2007: odd aspects of numbers of matters sent outside.). Notional spend might underlie the estimate of proportions of work, but my doubts remain (See my post of Nov. 2, 2006 about DaimlerChrysler and notional rates.).

It mystifies me how the survey respondents quantified the shift in their make-buy balance for legal services (See my post of March 5, 2008: make-buy with 11 references.). The proportions they give must be based on something other than a comparison of internal costs and external fees, since that ratio has stayed quite similar for years (See my post of March 29, 2009: 40/60 ratio of inside-to-outside spend with 18 references.).

My second point questions the explanation offered for the shift in proportions of internal and external work. The two reasons given are odd – or at least they are minor considerations. Better project management makes a contribution, but to credit technology so much? Knowledge management has never gotten off the ground.