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Study: In-House Counsel Seeing Increase in Outside Legal Spend

August 17, 2013 | Posted in : Fee Agreement, Legal Bills / Legal Costs, Litigation Management, Study / Report

A recent Corporate Counsel story, “In-House Counsel Seeing Increase in Litigation,” reports that more than one-third of general counsel in a recent survey, “Litigation &Corporate Compliance Survey (pdf),” said the number of legal disputes their companies have been involved in increased during the past 12 months and only 7 percent said they saw a decrease.  The study was conducted by business consultant AlixPartners.  The study is based on a survey of more than 100 general counsel at companies of $250 million or more, primarily in the U.S.

And with an increase in litigation comes higher legal costs reported by most companies in the AlixPartners survey. One in 10 companies said they were involved in a “bet-the-company” lawsuit in the past year.  The good news for in-house lawyers is that some 27 percent of companies said they are increasing the size of their legal departments to help deal with the disputes.

In other findings, the report said:

  • A whopping 84 percent of corporate legal departments are trying several ways to lower legal costs, including keeping more in-house, using alternative fee arrangements, and resorting to alternative dispute resolution.
  • Contract and intellectual property disputes were the most common types of legal actions.
  • Some 55 percent of respondents said alternative fee arrangements are important.
  • Many companies were considering enhanced compliance programs as well as better tools to mitigate risks.
  • Some 25 percent of respondents have increased use of outside counsel, especially for mergers and acquisitions and internal investigations.