Law Department Expenditures Drop According to Leading Survey

Newtown Square, PA, December 7, 2001 — The just-released Altman Weil 2002 Law Department Performance Metrics Survey reports that average total law department spending as a percentage of sales revenue dropped from .4375% reported in the 2001 survey to .3882% reported this year.  

“This change appears to reflect a response to the increasing pressures law department leaders face to manage work more efficiently and control costs,” says Dan DiLucchio, an Altman Weil Principal in the Law Department Group.  “This spending/revenue metric is a key number we look at in measuring law department performance.”

The Law Department Performance Metrics Survey, published in partnership with the American Corporate Counsel Association (ACCA), tracks U.S. law department expenditures, staffing, functions and operations and is a companion study to the Altman Weil Law Department Compensation Benchmarking Survey.  The 2002 Survey includes data from 197 companies, 25% with revenues of $5 billion or more.  Survey data is reported by sales revenue, industry type and law department size.

Internal Per Lawyer Expenses Decrease

Reversing a multi-year trend of increases, the average total internal operating expenses per lawyer in law departments decreased by 1.5%.   This year’s survey shows increases in compensation, benefits, and technology spending, while occupancy and overhead costs and contract lawyer expenditures declined.   

Outside Spending Drops

Outside counsel fees per lawyer (excluding patent departments) fell 8.9%, while the average total outside expenses (again excluding patents) fell 9.3% to $380,575.   Outside fees and expenses for patent departments ran against the trend showing dramatic increases.

Hourly Rates Rule

Although there is still much debate about the hourly rate, Survey participants report that only 20% of fees paid to outside counsel are based on alternative fee arrangements.  This is consistent with numbers reported in last year’s Survey.

Increased Efficiency in Staffing

Law departments continue to leverage their resources by employing more paralegals.  The 2002 Survey reports that large law departments – those with 26 or more lawyers –increased their ratio of paralegals to lawyers from .27 to .35 this year.  This means that there are 35 paralegals employed for every 100 lawyers.

Survey Now Available

The complete 2002 Law Department Performance Metrics Survey is available from Altman Weil Publications, Inc. and may be ordered by calling toll-free 1-888-782-7297 or purchasing online at store.altmanweil.com.  The Survey is priced at $495.00.  Discounts are available to ACCA members and to Survey participants.

Founded in 1970, Altman Weil has maintained a leadership position in serving legal organizations and the profession. It is the only legal consulting firm to be named repeatedly to the Consultants' News list of the top 100 consulting firms.  Altman Weil Publications, Inc. is known for the many legal economics surveys it conducts and publishes, including the Survey of Law Firm Economics and the Law Department Compensation Benchmarking Survey.   For additional information visit our website at www.altmanweil.com.