The concept of baseline external spend by legal departments and a call for clarity

All general counsel complain that their budget this year is swollen by some anomalous and uncontrollable charges. Their company bought another company and whacking big legal fees came with that acquisition. The plant closing of four years ago erupted discrimination claims. A crazy class action came out of the blue. Each year usually brings a costly surprise or two that was not predictable (See my post of Aug. 9, 2009: eight myths procurement professionals harbor.).

Despite these budget body-blows, what we might call “baseline spend” by legal departments holds fairly steady most years in relation to corporate revenue. The unusual usually happens against the background drone of the typical. The world of law departments needs a defined, consensual term such as “baseline external spend” for the normal pace of spending. Aside from the unpredictable volatile matter, baseline legal spend explains a good portion of external legal spend (See my post of Oct. 2, 2006: base spend.).