What impact does a slow economy have on the amount of work corporate law departments send to outside firms?
The answer depends on whom you ask.
Two recent surveys offer different takes on how the lethargic economy is affecting the distribution of legal work. One survey, released in October found that legal departments have cut spending on outside counsel and have become more selective about the work they send out. Yet another survey, published this month, has found that most corporations have maintained or increased their reliance on outside firms during the past year.
"Right now, I don't think anybody knows exactly what's going on," said Daniel DiLucchio Jr., a consultant with Altman Weil who specializes in corporate law departments. "My sense is that most general counsel are trying to contain costs and internalize the work as much as possible, and find the right firms to do the work they send out."
DiLucchio noted that the economy has gone through drastic changes in a short period of time, and that in-house counsel are making adjustments accordingly, which could account for the varying survey results.
According to a recent survey sponsored by legal staffing service Robert Half Legal, corporations have sent more business to outside law firms in the past 12 months. That survey was based on responses from attorneys at 150 large U.S. and Canadian companies.
More than a third of those surveyed -- 36 percent -- reported that their companies had increased the amount of legal work sent to outside law firms in the past year. Another 42 percent said that there had been no change in the amount of work for outside counsel, while 19 percent said that the amount of work going to outside legal counsel had decreased.
The Robert Half Legal survey does reflect some negative impact from the economy, however. The percentage of in-house attorneys who reported an increase in work for outside firms dropped by 9 percent from 2007, when 45 percent said that their companies increased the amount of legal work they sent out.
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By: Karen Sloan