Once more into the breach on whether legal spending dropped during 2009

Was there a drop in corporate spending on internal legal departments and outside counsel during 2009? Folks at Thomson Reuters HildebrandtBakerRobbins think so and credit general counsel’s management nous (See my post of Oct. 21, 2010: median total legal spending dropped due to management discipline.). I disagreed with the reason attributed to the drop, and later offered data that suggests legal spending in fact rose as a percentage of revenue (See my post of Nov. 23, 2010: using data from R&D spending and G&A at large companies.).

Now, another blow to the “astute management” theory. “The average percentage of company revenues spent on outside counsel was .33% in 2009, comparable to the past two years (.32% in 2008 and .35% in 2007), and in line with prior years.” The ratio rose in 2009. That finding comes from the 2010 ACC/Serengeti Managing Outside Counsel Survey. Someone facile with figures could point out that if company revenues dropped in 2009, legal spending would also have dropped, but my point is that absolute dollars are not the measure, but dollars as a share of company revenue.

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