CHICAGO--(BUSINESS WIRE)--Huron Consulting Group, a leading provider of business consulting services, today released the results of its Huron Legal IMPACT® Benchmarking Survey. Huron Legal, in alliance with The General Counsel Forum, conducted the Survey to address the areas of greatest concern to in-house leadership and provide benchmark data to help law department leadership better understand the effectiveness of various cost reduction measures and law department operating processes.
“Due to rapid changes in the legal industry and continued economic instability, law departments have been forced to become more cost-conscious and place a higher priority on improving operational processes”
“Due to rapid changes in the legal industry and continued economic instability, law departments have been forced to become more cost-conscious and place a higher priority on improving operational processes,” said Joy Saphla, managing director, Huron Legal. “The 2012 IMPACT Benchmarking Survey indicates that law departments that utilize well-planned operational efficiency programs are more effective in controlling external costs and outlines best practices to help law departments proactively manage cost without impacting risk.”
Survey participants represented 114 companies in diverse industries with a total annual legal spend of $2 billion. Individual companies’ legal department spend ranged from $245,000 to $320 million. While the majority of participating law departments were based in the United States, over a quarter had attorneys in global locations. Based on their responses, Huron Legal identified four key efficiency tactics used by law departments that produced measurable savings:
- Outside Counsel Selection Guidelines – Respondents recognize that guidelines for when outside counsel should be used and which firm to use are key components of successful resource management. Of those who participated, 76% of respondents reported having guidelines for when to use outside counsel at least some of the time, and 81% reported sometimes or always using guidelines for which outside counsel to use.
- Consolidation of Law Firms – Companies that consolidated the number of firms used also realized savings. Of respondents using at least 10 law firms, those that consolidated 80% of their legal spend to fewer than 20% of the firms they used realized 42% lower external legal spend as a percent of company revenue than those that did not consolidate.
- Alternative Fee Arrangements – Law departments that used alternative fee arrangements (AFAs) reported, on average, 40% lower external legal spend as a percent of company revenue than those that relied solely on traditional hourly fee pricing models. Data provided by respondents also indicate that AFAs are becoming more imbedded in the legal industry. Fixed fees and flat fees were the most common AFAs used by these respondents.
- Use of Alternative Service Providers – Law departments that used third-party service providers reported, on average, 33% - 54% lower levels of external legal spend as a percent of company revenue than those that did not use them.
Huron Legal’s IMPACT Benchmarking Survey establishes a consistent correlation between operational process improvement measures and the ratio of legal spend to company revenue. The findings demonstrate the positive impact of proactive outside counsel management programs, effective and reasonable internal and external departmental and matter budgeting, and the appropriate use of third-party vendors as well as alternative fee arrangements.
To speak with one of Huron Legal’s experts about cost pressures or other issues that general counsel are facing or to receive a copy of the IMPACT Benchmarking Survey executive summary, please contact:
Jennifer Frost Hennagir
About Huron Legal
Huron Legal provides advisory and business services to assist law departments and law firms to enhance organizational effectiveness and reduce legal spend. Huron Legal advises on and implements strategy, organizational design and development, outside counsel management, operational efficiency, and discovery solutions, and provides services relating to the management of matters, contracts, documents, records, digital evidence and e-discovery. Huron Legal is not a law firm; it does not offer, and is not authorized to provide, legal advice or counseling in any jurisdiction. Learn more at www.huronconsultinggroup.com/legal or follow us on Twitter: @HuronLegal.
About Huron Consulting Group
Huron Consulting Group helps clients in diverse industries improve performance, comply with complex regulations, resolve disputes, recover from distress, leverage technology, and stimulate growth. The Company teams with its clients to deliver sustainable and measurable results. Huron provides services to a wide variety of both financially sound and distressed organizations, including leading academic institutions, healthcare organizations, Fortune 500 companies, medium-sized businesses, and the law firms that represent these various organizations. Learn more at www.huronconsultinggroup.com.