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In smaller departments, about three law firms hired regularly per in-house lawyer?

A recent survey gives some support for the heuristic that law departments five or fewer lawyers retain customarily about three primary firms for each inside lawyer. Data from ACC’s Seventh Annual Chief Legal Officer Survey at 2, shows that 85 percent of the respondents use 15 or fewer law firms “on a regular basis.” At page 9, the survey discloses that 80 percent of the respondents have law departments of five or fewer lawyers (one third of them were solo).

If we roughly assume this group of small law departments had on average three lawyers and used “on a regular basis” an average of nine firms, we can propose a working rule of thumb of three primary law firms per lawyer. We might further speculate that roughly half those firms handle litigation (since outside counsel spending on litigation accounts for about half a typical law department’s external spend), and the rest probably handle a specialty area such as environmental, employment, or intellectual property issues.

The wild card in this extrapolative exercise is the meaning of “work with on a regular basis.” Without a clear definition of that term, such as “accounts for 20 percent of your spend each year,” or “retained on more than five matters a year,” or “the go-to firm for our department whenever issues arise in an area of law,” the numbers are far from reliable.