In 2015, corporate legal spending increased for the second straight year according to a new survey. The study also reported that increased or changing regulatory requirements is the top challenge general counsel face.
Huron Legal’s annual Law Department Benchmarking Survey, found that, on average, corporate legal department spend rose 1.7 percent in 2015, down from 2014’s 2.2 percent increase.
Bret Baccus, managing director of Consilio, which owns Huron Legal said he expects “…legal spend will likely decline because there are now more programs in place within corporate law departments to help manage budgets and reduce legal spend. Those programs include matter-management e-billing technology, increased use of alternative fee agreements that achieve cost predictability and increased collaboration between law departments and law firms.”
In context to the study, Liam Power, President of Vintage, emphasizes the importance of cost predictability for inside counsel as well as their supporting securities law firms. “Eliminating legal overspending on the finite service of regulatory [SEC] compliance is a number one reason for our continued growth and why we were ranked a top three provider in 2015, along with Merrill and RR Donnelley. A key attribute for delivering what we titled ‘intelligent value’ – fast turns and spot-on execution – is cost predictability… our transparent billing practices. No surprise fees when the job is done. I am often amazed at how much time inside counsel save by not having to sort out complex invoices or explain unexpected increases,” finished Power.
Amar Sarwal, vice president and chief legal strategist at the Association of Corporate Counsel, said the cost-cutting measures the report cited mirror what he’s seen in the industry. Chief executive officers and chief financial officers are ordering across-the-board reductions and law departments are responding to renewed scrutiny. “There’s a ruthless search for inefficiencies to root through, no doubt about it,” Sarwal said. “I don’t think lawyers are immune from those pressures.”