An earlier post looked at total legal spending as a percentage of data found by the 1993 Law Department Spending Survey of Price Waterhouse and its successor, the 2007 Law Department Survey of Hildebrandt (See my post of Dec.5, 2007.).
Also noteworthy are the stability of other basic metrics over the 14-year period. In 1992, the median figure for total legal spending (TLS) as a percent of revenues was 0.40 percent (See my post of Jan.18, 2007 on lawyers per billion of revenue across industries.). Fourteen years later, that figure had barely budged, at 0.44 percent.
Outside counsel spending as a percent of revenues shifted slightly, from 0.21 to 0.19 percent, while total inside legal spending dipped a tiny amount, 0.14 percent to 0.13 percent. Given the number of departments in the two surveys, neither the TLS nudge upward nor the components’ minor adjustments is likely to be statistically significant (See my post of June 19, 2006 on statistical significance.).
If the shift of spending from outside to inside is legitimate, not a statistical artifact, two observations find support. Despite all the wailing about outside counsel fees and billing practices, law departments have whittled down their painful consequences. Second, this data suggests that over this period of years, law departments have bulked up in-house as compared to spent outside.