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Global corporations slowing their spending on legal fees, study finds

Julie Kay / Staff reporter

September 30, 2008


Large global corporations are slowing their spending on legal fees, both for in-house and outside legal counsel — but compensation to lawyers is still on the rise, according to a survey of 223 companies done by legal consultant Hildebrandt International.

Lawyer pay — including base salary and bonuses — increased by an average of 8% among all lawyer levels. Last year, that figure was 10%. The average compensation for in-house attorneys is $236,000, up from $226,000. The average compensation for the chief legal officer has exceeded $900,000.

But general counsel didn't suffer at all. The survey showed their pay increased by 14% last year, to an average compensation of $700,000.

The survey, which included many Fortune 500 companies across a variety of industry groups, showed that companies are still increasing their spending on lawyers but at a much slower rate than last year.

For example, total legal spending by companies increased by 5% in the United States and 3% worldwide. The four previous years, legal spending grew at a rate of 6% to 7% in the United States.

The survey shows the median company spends $4.3 million per billion dollars of revenue on legal fees, which includes in-house legal staff.

Inside legal spending worldwide increased by 6%, while spending on outside counsel grew by 2% in the United States and 3% worldwide. The mix of inside and outside counsel spending held steady, the survey showed, with inside spending representing 41% of total spending and outside counsel representing 58%.

Most companies — 67% — said they expect no change in the number of law firms they plan to use in 2008, but nearly a third — 29% — said they anticipate decreasing that number.

The full survey can be viewed at www.lawdepartmentsurvey.com.



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