Law Department Management Blog
Serengeti has found consistently that the law departments in its survey have spent relatively more of their total legal spend on the law department rather than on law firms. The data in ACC Docket, Vol. 27, July/Aug. 2009 at 18, states the trend in terms of the ratio of median spending on outside counsel to median spending on law departments. The decline goes from 2.0 in 2004, to 1.8 in 2005, to 1.57 in 2006, and to 1.29 in 2007.
I converted those ratios to percentages of total legal spend going to outside counsel. The decline conveyed that way seems less dramatic than the decline in the ratio of medians. Percentages of total spending spent outside declined from 66.7 percent in 2004, to 64.3 percent in 2005, to 61.1 percent in 2006, and to 56.3 percent in 2007.
My only point is that how data is conveyed makes a difference. Here, the medians state a 36 percent drop over the four years, whereas the percentages state a more modest 16 percent drop. Whichever, the trend is unmistakable and it is good that Serengeti points it out.