Companies Curb Use of Outside Law Firms

Wall Street Journal (Link to Full Article, Sub. Req.) Law firms have some new competition these days: their own clients.

Instead of calling an outside lawyer to work on midlevel deals or contracts, many companies now handle that work in-house with growing teams of staff attorneys who don't bill by the hour.

This year corporations are shifting an estimated $1.1 billion that they used to spend on outside lawyers to their own internal legal budgets, according to a new data analysis. That migration cements a trend that took off during the recession, when general counsels were under pressure to rein in costs, and spiked in 2012, when companies redirected $5.8 billion in legal spending in-house.

About 58% of larger companies are sending more legal work to their own law departments this year, compared with 50% in 2013, according to the analysis by BTI Consulting Group Inc.