HBR Internal Legal Spend Survey: Post-Recession Increase Continues

The 2013 HBR Law Department Survey found a three per cent increase in the total inside legal spend worldwide. Over the past five years, the change in total legal spending has fluctuated from a one per cent decrease to a five per cent increase. Results from the 2011 and 2010 survey years showed a decrease in total legal spending, mostly due to the economic downturn.

Contributing to the recent increase is a five per cent increase in inside legal spending (compensation and operating expenses) and a two per cent increase in outside counsel spending.

The higher rate of increase inside is in line with a trend among law departments to keep more work in-house as a cost-containment measure.

In-house staffs continue to grow, although at a slower pace than in 2012. Worldwide, between 2011 and 2012, 52 percent of participants reported an increase in their total number of lawyers, down from the 57 percent that had an increase between 2010 and 2011. In the 2013 survey, 57 percent of companies reported an increase in total legal staff.

This year’s results indicate that the increase in the number of lawyers is primarily impacted by the growth in general commercial lawyers supporting business units, as opposed to litigation or intellectual property specialists. For 2014, 39 per cent of participants expect an increase in the number of lawyers in the United States, while 47 percent expect to increase lawyers outside the United States.