If the early 90s were good for anything, it was that general counsel were able to hire talented in-house help on the cheap and wrangle big discounts from outside counsel. But the economic boom has legal managers singing a different tune. “Many of my clients are screaming that they can’t hire, and they can’t get their outside counsel to give their work a high priority,” says Joel Henning, senior vice president and general counsel of the Somerset, N.J.-based legal consulting firm Hildebrandt International.

In fact, law firms are not only eliminating discounts, they’re raising rates. Some are actually turning away work. As Federal Reserve Board chairman Alan Greenspan would be the first to admit, inflation is bound to follow this shift from the buyers’ market of ten years ago. And so it is, according to the PricewaterhouseCoopers 1999 U.S. Law Department Spending Survey, which shows legal spending up across the board, with outside counsel costs increasing more than in-house expenditures.

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