A tough line taken by in-house lawyers across the Atlantic has seen US companies resist an increase in legal spend despite a rise in law firm fee rates, research has revealed - in a trend also being noted in the UK.

A survey of 154 US companies by legal consultants Altman Weil found that legal departments' overall spend per lawyer remained static at $867,000 (£482,000) in 2003, even though external billing rates rose by around 7%.



While there was no cut in the number of lawyers in in-house legal departments - with an average of 3.5 lawyers per billion dollars (£556 million) of revenue - the number of paralegals was slashed by a third and administrative staff were cut by a fifth.



The survey found that US general counsel have become more efficient at negotiating alternative fee arrangements, consolidating work with fewer firms, and implementing better case management procedures.



E-billing systems, which allow for close scrutiny of bills, were used by 12% of companies surveyed - a 5% increase in take-up.


Anthony Armitage, vice-chairman of the Law Society's Commerce & Industry (C&I) Group and director of legal tendering consultancy Firstlaw, said that UK in-house lawyers are also adopting a tough approach to external fees.


Mr Armitage said: 'In-house lawyers are under increasing pressure to work to tight budgets in both the US and the UK. As headline rates continue to rise, in-house counsel are becoming much more clever at benchmarking expertise, service levels and value, and by sharing their knowledge with peers through trade bodies and the media, their bargaining power becomes much stronger.'



He added: 'C&I London group research has shown that most legal departments are concentrating 70% to 80% of their spend on core areas such as litigation, property and employment. But it is in the infrequent, niche areas that it is most difficult for in-house lawyers to get value for money.'