Legal Departments Want Effective Legal Spend Management Solutions, But Implementation Lags Far Behind

Perhaps unsurprisingly in view of the prevalent anxiety around spending, our survey found that over 70% of in-house counsel believe that percentage and dollar reductions in monthly outside counsel spending would be a valuable metric for their legal department to track:

This is what we found when we broke out the Question 8 data by annual outside counsel spend (percentage desiring spending metrics for outside counsel):


Up to $1 Million


Between $1 and $5 Million


Between $5 and $10 Million


Between $10 and $20 Million


Over $20 Million

"There is a perception among smaller companies that the effort put into tracking such metrics would not be [worthwhile]"

We were very interested to learn that there is a real spike in interest in tracking outside counsel spending metrics within companies spending between $5 and $20 million per year on outside counsel. Perhaps there is a perception among smaller companies that the effort put into tracking such metrics would not be worth whatever time and effort might be needed to implement such tracking. In-house counsel at larger companies (with over $20 million in annual outside counsel spending) might feel “less personal” about their department’s expenditures on outside counsel, as compared to those in smaller, possibly tighter-knit legal departments.

As revealed by follow-up questions, the clear desire for legal spending metrics has generally not resulted in actual use of such metrics. In fact, we were surprised to find that about three-quarters (73% - Q9) of legal departments have no system at all for managing outside counsel spending.

An important takeaway for in-house counsel is that they should educate themselves on the solutions available for managing and reducing outside legal spending. Working in a department traditionally viewed as a “cost center,” in-house counsel should also consider how appreciative their management might be if they come up with a way for the legal department to save money, rather than spend money.

A nice question to ponder:
how might your legal department use the resulting savings?

Up next:

Legal Billing Software Is Partially Effective in Reducing Outside Counsel Spending