Chief Legal Officers generated $9 million in value in the face of the largest legal budgets seen in 15 years. New approaches to managing outside counsel, settling litigation, alternative fees, focusing on compliance, pushing budgets on law firms and providing more support to business units is paying dividends. And don’t forget, corporate counsel have moved more than $1 billion in house in the last year. The changes are paying off big time.
More Value with Bigger Budgets
Corporate legal budgets are at a 15-year high as measured in dollars spent. But, the average large company managed to reduce spending to .38% from .45% of revenue over the past two years. This means as companies grew larger the percentage spent actually declined. Chief legal officers were able to support more business with $9 million less.
Largest Companies Gain Most Value
Fortune 100 companies sport the biggest legal budgets and delivered the biggest gains in value. The Fortune 100 are able to generate the most value as they take advantage of their scale and large staffs. These companies also have more bandwidth to develop and test a broader array of management strategies to tackle some of the largest legal issues companies ever see.
Smaller Companies Burdened with Higher Legal Cost Structure, for Now
Companies outside the Fortune 500 saw a net decrease in value as these companies face an avalanche of regulatory challenges, have fewer economies of scale and a more diverse array of disparate legal issues. The very structure of the legal issues these companies face makes them more expensive to manage for now. We fully expect these companies outside the Fortune 500 to learn from larger law departments.
Improving the Corporate Counsel Value Equation
Law firms will want to be the first to help their clients figure out their value equation. What has happened to client spending as their companies have grown? We recommend you use BTI’s exclusive legal spending benchmarks to measure the value created—if the percent of the legal budget goes down while revenue goes up your clients are creating value. You can also use the metrics to help clients calibrate their spending by size and industry. BTI Legal Spending Benchmarks 2015 provides spending metrics and benchmarks for 14 different industries.
You will have immediately helped your client develop a powerful story to illustrate the value each provides their company. Be the first to help clients deliver even more value—and increase your own.
Download your complimentary copy of BTI Legal Spending Benchmarks 2015 today.