Internal and external billing rates, combined with the ratio of internal to external spend, suggests one-to-one lawyer hours

Caution, shoals of math ahead before the port of understanding is reached.

Assume the effective billing rates of outside counsel run at about 50 percent higher than the fully loaded cost per hour of internal counsel — $330 outside to $210 inside would be unremarkable for many U.S. law departments.

Assume the typical law department spends about 50 percent more on outside counsel than on its inside group, which amounts to the common 40/60 split of those two categories of spend.

Combined, the rate and spend differentials suggest one outside counsel hour for every in-house lawyer hour.

So what? Well, one what is that notions bandied around about law departments only going to outside counsel on an exception basis founder and sink. Another what is that both sides of the equation should unload equivalent portions of ballast if costs must be cut (See my post of Nov. 24, 201: to reduce budget you have to cut inside.). A third what: to drill down one level from the complete department to practice areas or types of matters can show considerable variety (See my post of May 30, 2011: effective billing rates by types of matters.).

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