Law Departments Grow While Shrinking Outside Counsel Budgets

The 2014 HBR Law Department Survey, as cited in the March issue of Today’s General Counsel, reports that 55 percent of law departments surveyed globally increased their internal staff of lawyers in the prior year. Also, 61 percent increased their total legal staff. Furthermore, a growing minority of law departments are jacking up their in-house litigation staff (28 percent vs. 21 percent in the prior year). Other in-house specialists are also on the rise in a minority of departments.

This affirms the trend reported in other surveys (including one cited on this blog just days ago) providing law firms with one more bit of evidence that they have to improve the perceived value of the services they deliver at the rates currently being charged.

Of course, there are still plenty of outside counsel delivering great value and being rewarded for doing so.

But these news items show that there is a growing value perception problem for law firms generally. In some cases, outside counsel might be delivering value, but not doing a good job of measuring it or communicating it. In others, they are just not delivering what the client perceives to be valuable. In both situations, law firm counsel needs to improve their communication with clients about what they really want and truly value.

That is part of the reason that I created a program on what GCs and C-Suiters want from outside counsel, examining what they value and what they disdain. Call if you are interested in hearing more about it.