Survey Shows Law Departments on More Stable Footing
The latest edition of a key annual law department survey indicates that the fortunes of in-house attorneys are looking a bit brighter again, after departments weathered the difficulties of the financial crisis.
The “2013 HBR Law Department Survey,” conducted by HBR Consulting, collected information from 280 companies, domestic and global, to provide a picture of the trends impacting law departments. The survey revealed a 3 percent increase worldwide in companies’ total legal spending in 2012. In-house legal spending rose 5 percent, while spending on outside counsel rose by 2 percent.
Lauren Chung, survey editor and senior director of law department consulting at HBR, told CorpCounsel.com that this is the second survey in a row that has shown modest legal spending gains at companies. The 2010 and 2011 HBR surveys showed drops in spending, as departments reacted to the financial crisis and recession by cutting costs and reevaluating efficiencies; the 2012 and 2013 studies both track a reversal of that trend.
“It’s not really sustainable for law departments to cut costs for too long,” Chung said.
She explained that the gains in this year’s survey, however modest, suggest that companies have become more successful at cost control and rethinking in-house legal resourcing in a time of challenging economics.
Staffing appears to be in somewhat of a recovery mode as well, although hiring was slower between 2011 and 2012 than between 2010 and 2011. The 2013 survey indicated that globally, 52 percent of respondents hired more legal staff between 2011 and 2012, down from 57 percent between 2010 and 2011.
Survey respondents were also asked to forecast their demand for legal services across 28 different practice areas. Regulatory matters topped the list, with 47 percent of respondents anticipating the need for more work in this area. Chung explained that this is not new or surprising, given the overall expansion of the regulatory environment.
“There’s an increasing amount of regulatory pressure that companies are facing across industries,” she said.
The other top scorers in this category were International, at 44 percent, and Contracts/Commercial at 37 percent.
Chung also noted that the overall response rate for the 30-year-old survey was higher in 2013 than it has ever been. She believes this is probably due to the growing popularity of metrics in companies as a “key element” in performance measurement. “I think there’s a heavy reliance overall in the industry on data,” she said, adding that in leaner times, metrics have become even more useful for companies in justifying expenses.