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Eleven law firms accounted for 75 percent of the median company’s outside counsel costs

The 2006 Hildebrandt Law Department Survey includes 201 companies, of which 117 had annual revenue of $6 billion or more. The median-sized company had over $8 billion in annual revenue. Of the entire group the median number of law firms that were paid three-quarters of all outside counsel payments was 11 firms. That metric indicates significant concentration of spending (See my post of March 24, 2005 on the merits of concentration of spend over convergence of law firms.). Further, the top billing law firm accounted for 21 percent of the median company’s total outside counsel spend. This was cited in the Client Advisory, March 2007 of Hildebrandt and Citigroup Private Bank at 6.

Let me add one other comment, on procurement’s increasing role (See my posts on Feb. 20, 2005 on procurement “creeping in;” Aug. 14, 2005 on Oracle; June 16, 2006 and the Bank of Ireland; Aug. 2, 2006 and Sears; Aug. 20, 2006 and “new found powers;” April 7, 2006 and some further thoughts; April 7, 2006; and April 30, 2006 #5 and Microsoft.).

According to the Client Advisory at 7, the 2006 Hildebrandt Law Department Survey inquired for 2005 about what percentage of the company’s “corporate procurement departments [were] actively involved in the evaluation and retention of outside counsel.” Of the 201 companies that completed the survey, 11 percent of them agreed that within their company procurement had that level of participation.