GCs Starting to Bring the Work Back Home

Leslie A. Gordon
GC California Magazine
December 18, 2008

Like many in-house lawyers, Shannon Dwyer, general counsel at St. Joseph Health System in the Southern California city of Orange, has been gearing up for the 2010 budgeting cycle. The $4 billion, nonprofit organization, which runs 14 hospitals in three states, has a “responsibility to be a good steward of the assets,” says Dwyer. But in the current economy, she’s finding that using seasoned attorneys at large law firms is quickly becoming “cost-prohibitive.”

As a result, she’s been looking to hire a new lawyer — bringing her legal department to nine attorneys — to help handle even more of St. Joseph’s legal work in house. “It’s a basic cost-benefit analysis,” says Dwyer. “Although there’s some convincing of management to be done whenever you increase [employee staffing] at the corporate level, it’s not difficult to make the business case” that adding in-house lawyers is cheaper in the long run than paying increasingly rising outside attorney fees.

Demonstrating a trend that has significant implications for law firms, a growing number of California companies are under pressure to control costs and handle more work in house, where they can come closer to paying wholesale rather than retail for legal services. According to a 2008 survey of chief legal officers, conducted by consulting firm Altman Weil, GCs like Dwyer are planning to decrease their use of outside firms, which typically constitute the largest expense of any corporate legal department. Correspondingly, chief legal officers plan to increase law department staffing over the next 12 months, according to the survey, which was conducted this past May and June.

Specifically, the survey reports that 49 percent of legal departments plan to hire additional lawyers in the next year, up from the 40 percent who said they planned on new hiring in the last survey. At the same time, 26 percent of law departments will decrease their outside counsel, up significantly from 16 percent in last year’s survey. Only eight percent of CLOs plan to increase their use of outside counsel, down from 18 percent. Not surprisingly, CLOs cited cost control as their top concern over the next three to five years.

Hildebrandt International, another legal consulting firm, conducted a similar survey, which supports the Altman Weil conclusions. Hildebrandt’s 2008 law department survey found that inside legal spending rose by five percent in the United States while spending on outside counsel increased by just two percent. Nearly a third — 29 percent — of the 223 responding companies anticipate a decrease in the number of law firms they will use.

For more see law.com.


Technology Predictions for 2009

By The CMS Watch Analyst Team

It’s that time of year again. The CMS Watch analyst team ponders what to expect next year, and offers 12 predictions that we think will shape content technologies in 2009.

Clearly, the economic downturn will have a substantial impact on buyers and vendors alike, and economic concerns underpin several of our predictions. But we also foresee some organic developments (new SharePoint version, social tagging) and ripening technology (mobile analytics, application search) having at least as much impact.

For more see CMSwatch.com.

43% of Law Firm Leaders Surveyed Expect to Hire Fewer New Associates

Posted Dec 1, 2008, 06:13 am CST

By Debra Cassens Weiss

Only 38 percent of more than 100 leaders of large law firms who responded to a survey are optimistic about their firm’s prospects next year.

Instead, a majority—53 percent—told the American Lawyer they were uncertain about the next year. That uncertainty appears to be affecting hiring decisions for new associates—but not for lawyers with more experience.

DLA Piper joint CEO Francis Burch Jr. summed up the prevailing sentiment in an interview for a story on the results. “Anybody who is running a law firm who pretends to be able to predict with certainty what the firm is going to be doing in the next year and how it’s going to fare is dreaming,” he said.

Despite the lack of optimism, 72 percent expected their firm’s overall head count to increase next year. Only 6 percent expected a decrease.

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Lexakos Launches Second Annual Chief Legal Officer Strategic Planning Survey

Legal business consulting and IT staffing firm Lexakos is asking law department leaders again about plans for litigation support and records management compliance over the next year. Subjects covered include budget benchmarking, reporting metrics, outsource planning, litigation preparedness and privilege waiver management in relation to new Federal Evidence Rule 502 and other strategic priorities for 2009.

We look forward to comparing the results to last year’s study and sharing the analysis with our clients and friends. Click here to take the new survey.