LawFuel – New ALM Study Shows In-House Law Departmentws Face Budget Cuts As Work Increases

NEW YORK (November 24, 2009) – A significant and growing number of in-house law departments are facing shrinking budgets and increased workloads, according to ALM’s 2009 Law Department Metrics Benchmarking Survey. Budget cuts affected 62 percent of the law departments surveyed, with 20 percent of law departments reporting budget cuts of 15 percent or more. Almost 33 percent of responding organizations reported that the size of their law department was reduced within the last 12 months, while 70 percent reported an increase in workloads for in-house staff within the law department. The study was conducted by ALM Legal Intelligence, a leading source of business intelligence for the legal profession. For further information, or to purchase a copy of the survey, visit www.almlegalintelligence.com.

Other findings of the survey included the following:

· Total law department expenses dropped from last year’s median of .37 percent of annual company revenues to .29 percent, a 20 percent decrease in total expenses.
· Participating law departments reported spending the highest percentage of outside counsel fees in the practice areas of litigation (57 percent), mergers and acquisitions (11 percent) and securities/financial (10 percent).
· 21 percent of law departments reported an increase in the frequency with which law firms offered alternative billing arrangements. The top two alternative fee arrangements cited were discounted hourly rates (85 percent) and fixed, flat or capped fees (79 percent).
· The number-one criterion for selecting outside counsel continues to be firm specialization (34 percent), with cost (19 percent) moving up to second place from third place last year, while responsiveness dropped to third place (18 percent).
· The three most serious relationship mistakes made by outside counsel were over-billing (19 percent), lack of responsiveness (18 percent) and over-lawyering (17 percent).

ALM Legal Intelligence has monitored trends in in-house legal performance through 20 surveys conducted from 1972 through 2009. ALM’s Law Department Metrics Benchmarking Survey, 2009 Edition, contains data from 61 companies in the spring of 2009 and reflects FY 2008 data.

Data is reported by sales revenue, number of corporate employees, industry type and law department size. Almost 60 percent of participating organizations had more than $1 billion in revenue and 43 percent had more than 5,000 employees.

Additional information can be obtained by e-mailing [email protected] or calling 1-(888) 770-5647.

ALM Legal Intelligence offers detailed business information for and about the legal industry, focused on the top U.S. and international law firms. The division’s online research Web service, www.almlegalintel.com, provides subscribers with direct, on-demand access to ALI’s extensive database of surveys, rankings and lists related to law firms and the legal industry. The site also includes an online store where non-subscribers can, on an individual basis, purchase and download preformatted individual law firm reports, ALI Research reports and selected current-year survey data. ALM Legal Intelligence is a division of ALM.

ALM, an integrated media company, is a leading provider of specialized business news and information, focused primarily on the legal and commercial real estate sectors. ALM’s market-leading brands include The American Lawyer, Corporate Counsel, GlobeSt.com, Insight Conferences, Law.com, Law Journal Press, LegalTech, The National Law Journal and Real Estate Forum. Headquartered in New York City, ALM was formed in 1997. For more information, visit www.alm.com.

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