The proportion of big companies expecting to cut legal spend over the next 12 months has soared from 18% to 40% in the past year, according to research published today.
However Huron Legal’s 2014 IMPACT Benchmarking Report shows that nearly half of in-house legal departments expect spending to stay the same in 2015.
In-house lawyers from healthcare, technology and financial services businesses took part in the survey, which concluded that adopting best practice could cut legal spending by 48% compared with traditionally run legal departments.
Areas for best practice included matter management and e-billing technology, alternative fee arrangements, evaluation of outside counsel adherence to billing guidelines and defined panels/pre-approved lists for sourcing.
Huron Legal managing director Nancy Jessen said: ‘The operational efficiencies that underlie these successful programmes are enabling law departments to better engage with their internal business clients and advance their company’s strategic goals.’
Additional findings include:
- One in seven legal departments have a long-term strategic technology and process development plan, which includes matter management, e-billing and contract management;
- Nearly half (47%) have hired outside counsel through the use of a defined panel or pre-approved list, with subject matter expertise considered the most important factor in engaging them;
- One in eight have used alternative fee arrangements this year. Fixed fees and flat/capped fees were most commonly reported to increase the certainty of spend and lower costs, while improved partnership with outside counsel was regarded as the biggest benefit of using performance bonuses;
- More than half (57%) say they have used ‘big data’ and analytics to inform decision-making;
- More than two-thirds (65%) identified merger and acquisition work as a top area of legal department contribution.