In-house lawyers cost one-third of private counterparts

In-house lawyers cost companies on average one-third of their private practice colleagues, and most of them seek external advice because they do not have enough personnel to deal with matters themselves, a survey released last week showed.The survey of 64 companies ranging from mid-sized to blue-chip by legal recruiter Chambers & Partners found that the average in-house head of legal costs 76 an hour, whereas the average private partner charges 288 an hour.This is calculated using an average partner's salary based on a 60/40 split between City and regional firms, which Chambers said reflects the ratio of work farmed out by its in-house respondents.On the same basis an in-house legal manager costs 71 per hour, as against 208 for a senior assistant; an in-house adviser costs 65 per hour as against 169 per hour for a junior assistant in private practice; and an in-house paralegal costs 46 an hour as against 96 for an equivalent trainee solicitor.While 71% of respondents cited lack of in-house expertise as a reason for using external lawyers, 77% rated insufficient staff resources.The largest sectors for outsourcing were litigation, property, mergers and acquisitions, pensions and employment.Surprisingly, only 40% of respondents indicated that cost was a factor when choosing external lawyers.The most widely given reasons were expertise (88% of respondents); previous relationships with firms (72%) and personal knowledge of individuals (63%).Stuart Morton, an in-house recruitment consultant at Chambers, said: 'The findings show that - whatever happens during the downturn - companies ought to increase their in-house teams because it makes better financial sense.' But he conceded that December is not a time when companies actively look to recruit.

He explained: 'They usually wait to see how their budgets for the following year are apportioned before deciding recruitment strategies, plus there is added caution in the current economic climate.'Jeremy Fleming