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Seven years of Serengeti data on median spending on outside counsel

Each year the ACC/Serengeti Managing Outside Counsel Survey collects data on how much participating legal departments spend on outside counsel. The median for 2008 was $1.2 million. Thus, of the 390 participants last year who provided data for the previous year, the middle figure, when all their spending figures were stacked from highest spend to lowest, was $1.2 million.

Additionally, the ACC Docket, May 2010 at 12, gives the corresponding figures for the previous six years: 2007 – $1 million; 2006: $1.1 million; 2005 – $1.8 million; 2004 – $1.3 million; 2003 – $1.6 million; and 2002 – $1.2 million. The full report extends the series (at 53) back to 2001 – $1.1 million and 2000 – $1.1 million.

Three observations:

  1. Medians bob up and down year to year because the participant base changes. In fact, the full report from Serengeti says (at 27) “year-to-year there is very little overlap in the specific companies who respond to the survey.” Even so, in nominal dollars the medians were close to 10 percent plus or minus of $1.1 million.

  2. Changes in numbers of participants affect medians, since larger numbers suggest that smaller departments are taking part. Serengeti mentions this phenomenon. Indeed, in 2006 there were 263 respondents, in 2005 only 169, and probably smaller numbers as the survey goes back in time. If they were larger departments, on average, in those earlier years, it makes sense that the median spend figure would be decline with the infusion of smaller departments.

  3. Inflation affects the figures from the past, so we could look at the data series adjusted to 2009 dollars. Consider that what cost $1.1 million in 2000 would cost $1.36 million in 2009 according to one online calculator. Who knows whether outside counsel fees line up with changes in the Consumer Price Index (I strongly suspect they have risen faster.), but at least we have a clue as to how to compare figures several years apart as they might have been affected by inflation.