Strategist - The FindLaw Law Firm Business Blog

Hildebrandt Survey Shows Companies Still Seeking Help of Outside Counsel

Professional-services consulting firm Hildebrandt International has released its Law Department Survey for 2009, providing a new set of benchmarking data related to how companies in the U.S. and worldwide are using both inside and outside counsel. This year, 231 companies of all sizes in a variety of industries participated in the survey.

Predictably, the recession of the past year has affected the way companies hire and use outside counsel. However, despite slight declines in spending measured as a percentage of revenue, overall spending on outside counsel grew in the past year. And firms willing to to negotiate alternative billing arrangements might find their way to more outside-counsel work.

Some highlights from the 2009 Hildebrandt Law Department Survey:
  • Total legal spending by U.S.-based companies in the survey decreased from 0.43% to 0.4% of revenue.
  • The participating companies spent 60% of their legal budget on outside counsel.
  • Spending on outside counsel increased by 4% in for participating U.S. companies, though as a percentage of revenue, outside counsel spending was down slightly, from 0.24% to 0.22%.
  • Responding companies were farming out more of their legal matters to outside counsel (397 matters, versus 377 last year). Slightly fewer firms were doing the work, though, with respondents reporting 95 different outside firms hired, as opposed to 100 last year.
  • Most companies expect to continue using outside counsel: 60% of the responding companies said they anticipate no change in the number of firms they would use in the coming year; 32% suggested they would use fewer firms, while 8% expected to hire more firms.
  • Alternative billing arrangements are on the rise:  In 2008, 33% of the companies indicated that alternative billing arrangements represented 11% or more of their total outside counsel spending. In 2009, 46% of the companies anticipate that alternative billing arrangements will make up 11% or more of their total outside counsel spending.