Corporations just keep on moving more and more of their legal work in-house, and it doesn’t look like that trend will stop any time soon. According to a survey by the Corporate Legal Operations Consortium (CLOC), only 46 cents of every dollar went to external legal costs — like law firms — in 2018, compared with external costs taking 62 cents per dollar in 2017. That’s a big swing in only a year.
For the survey, CLOC spoke with 213 companies of various sizes in 32 industries and it showed internal legal operations, technology, and alternate legal service providers are increasingly filling in the gaps. As reported by Law360, legal departments are quickly finding new ways to improve their performance:
“This year’s data shows that the role and function of legal operations continues to grow,” said CLOC President Mary O’Carroll, who also holds the role of director of legal operations at Google. “Technology is changing quickly and more legal operations departments are embracing solutions to improve productivity and results.”
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Of the survey respondents, 41 percent said they’ve increased the number of full-time attorneys on staff, and 39 percent of companies said they’re increasing their legal ops staff. And the percentage of companies spending more than $750,000 on technology is now at 37 percent.
Even though the overall external legal spend is decreasing, more and more companies are spending that money on alternative legal service providers rather than traditional law firms. In this year’s survey, 53 percent of respondents said they are using alternative legal service providers a significant jump from the 36 percent from last year’s survey.
Legal problems aren’t getting smaller, but companies are getting smarter (and more frugal) about how they deal with them.
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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).