Budgets: general counsel are looking to bring more work in-house to control rising costs


In-house lawyers are set to clamp down on legal budgets in the year ahead - with particular pressure on the 'staggering' rates charged for junior staff, FTSE legal heads told the Gazette, this week. The news comes as US research reveals a sharp tightening of the purse strings by in-house lawyers across the Atlantic.



Carol Williams, head of legal at FTSE 250 company Northern Foods, said she had already increased the size of her in-house team to get better value for money, and other in-house colleagues were doing the same. She added: 'The increase in external lawyers' fees has been staggering over the last few years, particularly for trainees and junior assistants.'



Barclays group general counsel Mark Harding said: 'We have had a period where firms had more work than they could handle but we are now entering a period where that won't be the case, and that will drive down cost. In-house counsel are prepared to pay [a lot] for partners' advice. But the rates for junior staff have become very high, and that is something that will come under more pressure.'



Geoffrey Timms, group head of legal at Legal & General, added: 'With the turbulent times ahead, everyone is looking closely at cost. We have certainly looked at what we can do in-house where we can.'



Leading management consultant Alan Hodgart, founder of consultancy H4, added that the market for legal services is getting 'tighter and tougher, and you have got smarter in-house counsel'.



Meanwhile, a report by US consulting group BTI revealed that the US legal market saw a rapid decline in growth last year as corporate counsel 'tighten purse strings'. The $92 billion (£47 billion) legal services market grew by just 7% last year, compared to 13% growth in 2006. Spending on in-house departments grew by 4% to $30 billion (£15 billion) as legal departments added more staff. The report notes in-house counsel's concerns over the credit crunch, with 35% describing the transactions market as 'cold'.



Rachel Rothwell