Study Shows In-House Costs Are Rising Faster Than Those for Outside Counsel

The report, published with LexisNexis Martindale-Hubbell, found that the internal cost of operating an in-house law department grew an average of 7 percent last year for companies with $5 billion or more in revenue. That translates to $346,497 per lawyer, up from $323,697 per lawyer last year.

At the same time, the average spent on outside counsel rose only 1.4 percent, although the amount is still much higher: $616,519 per lawyer.

The industry with the highest outside counsel expenses was chemical manufacturing, with $1,063,294 per lawyer, more than four times higher than the insurance industry, which had the lowest cost at $251,405 per lawyer.

The highest percentage of outside counsel fees was for litigation, 30.3 percent, followed by products liability/class actions, 18.1 percent, and risk management, 17.4 percent. Two-thirds of all legal fees, 66.1 percent, on average, were paid to a department’s top four law firms.

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