Personnel expenses, including salaries, bonuses and benefits, dominate the internal budgets of most law departments (See my posts of July 31, 2005 and Feb. 21, 2008: estimates of 75%.). Data on this common situation comes from Altman Weil, in GC Mid-Atlantic, June 2008, at 30, with metrics from the firm’s 2003 and 2007 benchmark surveys (See my post of July 20, 2008: demographics of the surveys and queries on methodology.).
The 2007 data shows an average of $330,133 in total inside expenses per lawyer. Personnel expenses that year averaged $$277,058 per lawyer, which is 84 percent of the total. In 2003, personnel expenses accounted for 79 percent of the total inside expenditure.
Once again, because people costs bulk so large, if a general counsel must pare expenses, the only way to make meaningful cuts internally is to lay off people.