Editor’s Note: This systematic and thoughtful study by legal technology expert researchers from the Blickstein Group and Exterro provides an interesting, insightful, and in-depth look into the state of legal spend management through the eyes of 59 in-house legal decision makers.
Study from Blickstein Group and Exterro Shows That In-House Legal Spend Is On the Rise, While Outside Legal Spend Is Decreasing
The second annual survey evaluates the frequency and effectiveness of twenty-two techniques to reduce legal spend.
Exterro® Inc., the preferred provider of software specifically designed for in-house legal and IT teams at Global 2000 and AmLaw 200 organizations and the Blickstein Group today [May 1, 2018] announced the results of the 2nd Annual Study of Effective Legal Spend Management. This report continues to be the first of its kind to take an in-depth look at what law departments are doing to manage spend and control costs – and what is actually working. Fifty-nine in-house legal decision makers evaluated 22 different techniques for minimizing legal spend and the report weighs the frequency of use in addition to the effectiveness of each technique.
“The findings in this year’s study follow what our clients have been experiencing – that moving work in-house leads to cost savings and creates efficiencies for legal departments. As legal department operations continue to mature, we expect to see more work moving in-house and legal teams continuing to use data and process optimization to more effectively manage their work,” said Bill Piwonka, CMO of Exterro.
Key findings of the study include:
- After two years of declines, overall legal spend is rising. 43% of respondents expect legal spend to rise and only 24% of respondents expect their legal spend to decrease this year. The increase in legal spend is coming from in-house spend, with 48% of respondents expecting their total inside legal spend to increase. Conversely, outside legal spend is decreasing or remaining flat for 60% of respondents.
- The most commonly used technique for minimizing legal spend is negotiated rates/discounts while the most effective technique is e-billing enforcement of guidelines.
- Respondents consider themselves effective at controlling their e-discovery spend (62% rated themselves at least a 3 on a 5-point scale). Bringing more of the e-discovery process in-house was given a 4.16 rating (out of 5) on effectiveness as a technique to control e-discovery spend and more than 75% of respondents are using this technique.
“What’s interesting is how law departments are deploying their budgets. Forty-eight percent of our respondents expect their total inside legal spend to increase, up from only 25 percent last year. Perhaps such a jump is no surprise considering respondents listed ‘moving work in-house’ as one of the most common ways to control legal spend. They also reported that inside spend provides more visibility and accuracy in budgeting. Meanwhile, outside spending is expected to decrease slightly,” said Brad Blickstein, Principal of Blickstein Group.
The survey was developed with the guidance from an advisory board made up of senior-level e-discovery and legal professionals. It was completed by legal operations executives, general counsel, and attorneys from a variety of industries across the United States. The report can be downloaded here.
Exterro®, Inc. is the preferred provider of software specifically designed for in-house legal and IT teams at Global 2000 and AmLaw 200 organizations. Founded with the simple vision that applying the concepts of process optimization and data science to the way companies respond to litigation would drive more successful outcomes at a lower cost, Exterro has been positioned as a Leader in the last three years of Gartner’s Magic Quadrant for E-Discovery Software. Built on an open architecture platform, Exterro’s e-discovery and information governance software integrates with existing IT, HR and legal systems to deliver complete visibility into all critical data required for managing information assets more efficiently.