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Legal Technology: HBR Consulting: Legal Spending is Going Up

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October 04, 2012

HBR Consulting: Legal Spending is Going Up

By Oliver VanDervoort, Contributing Writer

It’s hard to tell whether this is a sign that the economy is really starting to turn around or whether the country is just becoming more litigious, but a new HBR Consulting report found legal departments across the country are spending more money than they have in years. In total, HBR says legal department spending was up five percent and has reached levels of spending that haven’t been seen since 2009. The consulting firm thinks that the numbers it saw in its 2012 Law Department survey will lead to growth in regulatory, global and government business law.

HBR says departments are staffing up at a decent rate, but they are also hiring more outside legal help. Growth in the technologicalfield for these firms is also growing, though their technology spending is not growing at the same rate that staffing costs are growing. While the spending in the technology field has not quite hit pre-2009 levels, firms are seeing a two to four percent growth rate.

The HBR survey took in quite a few companies that have deep pockets. HBR surveyed more than 260 companies spread out over 21 different industries. Those companies are generating about $20 billion in revenue per year. According to the consulting firm, about 70 percent of the companies who participated in the survey have revenues that qualify them for Fortune 500 status.

Not only has spending taken a climb, but it has reversed course over the last two years. HBR says that in 2011, legal spending was down one percent from 2010 and that spending on outside legal staff was down three percent. Managing Director Jonathan Bellis, who leads the HBR Consulting's law department consulting group, saidthe survey showed that "there is a swing in total spending of six percent, and a swing in outside spending of seven percent."

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Edited by Rachel Ramsey



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