A 2002 study commissioned by Lex Mundi (conducted by Altman Weil) found among an international group of law departments that “one-third of all respondents maintain a list of approved outside counsel for work performed domestically.” Unsurprising, but to what end?
No one has compared legal spending as a percent of revenue across a group of law departments that have an approved counsel list to the same metrics for a comparable group that maintains no list. Until we know whether a list helps manage costs, we can only surmise.
I believe it is necessary for well-managed departments to identify firms that will be expected to handle certain kinds of matters, absent unusual circumstance. To be sufficient, however, the department needs to enforce the use of only approved counsel; it needs to review the list periodically; it needs to prune the list; and it still needs to deploy cost-control strategies with the approved firms.