Although it is easy to list differences between companies that have publicly-traded shares and privately held companies, how those differences play out in legal department responsibilities, structure and budget so far remains unknown. In the fullness of time and benchmark participation, all will be revealed (See my post of Dec. 9, 2005: ADR survey sorts participants into publicly- and privately-held; Dec. 14, 2005: dispute wise companies; Feb. 1, 2006: general counsel compensation at Texas publicly-traded companies; May 26, 2007: market cap and its importance to companies; Jan. 19, 2008: metrics are missing that differentiate privately-held companies; Sept. 28, 2008: D&O questionnaires for directors; and March 29, 2009: certificates from Directors regarding conflicts.).
Meanwhile, it certainly seems plausible that publicly traded companies incur higher legal costs. Privately held firms have fewer SEC investigations, simpler incentive stock plans, no shareholder derivative lawsuits, no equity issuer fees, no corporate governance mandates from stock exchanges, and perhaps simpler acquisitions because there is no stock to issue (See my post of Jan. 18, 2009: share prices, event studies and litigation with 6 references.). To quantify the cost gap remains work for future analysts.