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Total legal spending should include fines, judgments and settlements; data lacuna

Benchmark surveys include the operational costs of law departments (mostly compensation, but also facilities, T&E, training, IT and other internal costs) and departments’ payments to vendors (mostly law firms). They rarely include other law-related payments, such as fines, judgments and settlements.

Legal departments do not provide the elusive data because they (1) do not track it; (2) do not convert all lawsuit resolutions into money – some involve licensing a patent, agreeing to new procedures, continuing a disputed arrangement and other non-cash solutions; (3) do not want to disclose sensitive, confidential settlements or patterns of settlement; (4) have insurance coverage for some expenditures; and (5) they react to the infrequency and size of the few payments they make by saying “this was an anomalous year”.

For all these reasons, benchmark total legal spending (TLS) is not total.

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