Huron Consulting Group Releases Fifth Annual IMPACT Benchmarking Survey to Track Legal Spend
December 03 2014 - 6:55AM
Business Wire
Majority of Law Departments Use Analytics to
Drive Decision-Making, Huron Legal Survey Finds
Huron Consulting Group (NASDAQ: HURN), a leading provider of
business consulting services, today released the results of the
2014 IMPACT® Benchmarking Survey, which was conducted in
partnership with The General Counsel Forum. The fifth annual Huron
Legal survey aims to help general counsel (GCs) better understand
the effectiveness of their operating processes.
The 2014 IMPACT survey shows that law department cost management
programs are becoming more sophisticated in light of ongoing
financial pressures. One indication of the increased intensity is
that over half of the law departments surveyed (57%) reported using
market data and analytics to drive decision-making, most commonly
to inform decisions about outside counsel fee arrangements and rate
negotiations (41%).
“This year’s survey results confirm what we are seeing in the
market – law departments continue to evolve in efficiency and value
delivery,” said Bret Baccus, senior director, Huron Legal. “As cost
management programs become more comprehensive, companies realize
their opportunities for considerable savings, which can ultimately
help provide increased value to the broader business
priorities.”
Best Practices Lead to Lower Spending
According to surveyed law departments, those that employ best
practices related to financial and outside counsel management had
48% lower external legal spending as a percentage of company
revenue than those without similar comprehensive programs. Some of
those best practices reflected in the survey responses include the
following:
- Matter management and e-billing
technology
- Detailed matter level budgets
- Alternative fee arrangements
- Evaluation of outside counsel adherence
to billing guidelines
- Defined panels/pre-approved lists for
sourcing
Of the respondents, 43% indicated that legal spend is expected
to be the same as last year, and of entities with over $10 billion
in revenue, 40% indicated that they expect their legal spend to
decrease in 2015.
“We find with our law department clients that there is no
one-size-fits-all solution that results in spending reduction
across the board,” said Nancy Jessen, managing director, Huron
Legal. “The evidence of some departments’ successful comprehensive
cost management programs offers inspiration to those whose programs
are still maturing. More importantly, the operational efficiencies
that underlie these successful programs are enabling law
departments to better engage with their internal business clients
and advance their company’s strategic goals.”
The survey also found that more law departments are integrating
comprehensive management programs throughout their law department
operations. These programs often include the following
initiatives:
- Widespread Use of Alternative Fee
Arrangements: The use of alternative fee arrangements (AFAs)
has continued to increase with 83% of law departments reported
using AFAs in 2014. Forty-eight percent of responding law
departments reported that AFA spend accounted for at least 10% of
their total outside counsel expenditures. On average, AFA spend
accounted for 20% of total outside counsel spend.
- Increased Emphasis on Budgeting:
Consistent with last year’s findings, matter level budget usage
remains high across all revenue segments with 75% of departments
reporting the usage of these budgets. The majority of law
departments continue to establish their matter level budgets at the
fee and expense level. However, the percentage of departments
reporting the establishment of budgets at the phase/task level has
increased from 37% to 57% since last year’s survey.
- Focus on Law Department Management
Technology: A majority (70%) of companies with over $10 billion
in revenue reported that their law departments have a long-term
strategic technology and process development plan which includes
matter management, e-billing, and contract management. The reported
use of matter management and e-billing systems has increased
notably since 2011; matter management/e-billing technology is used
by 85% of companies with over $10 billion in revenue.
The 2014 IMPACT Benchmarking Report encompasses survey data
collected from 75 companies of varying size and industry. Unless
otherwise noted, all quantitative questions pertain to fiscal year
2013 data and all qualitative questions gauge more generally the
ongoing practices of the law department.
About Huron Legal
Huron Legal provides advisory and business services to assist
law departments and law firms to enhance organizational
effectiveness and reduce legal spend. Huron Legal advises on and
implements strategy, organizational design and development, outside
counsel management, operational efficiency, and discovery
solutions, and provides services relating to the management of
matters, contracts, documents, records, digital evidence and
e-discovery. Huron Legal is not a law firm; it does not offer, and
is not authorized to provide, legal advice or counseling in any
jurisdiction. Learn more at www.huronconsultinggroup.com/legal or
follow us on Twitter: @HuronLegal.
About Huron Consulting Group
Huron Consulting Group helps clients in diverse industries
improve performance, transform the enterprise, reduce costs,
leverage technology, process and review large amounts of complex
data, address regulatory changes, recover from distress and
stimulate growth. Our professionals employ their expertise in
finance, operations, strategy and technology to provide our clients
with specialized analyses and customized advice and solutions that
are tailored to address each client's particular challenges and
opportunities to deliver sustainable and measurable results. The
Company provides consulting services to a wide variety of both
financially sound and distressed organizations, including
healthcare organizations, leading academic institutions, Fortune
500 companies, governmental entities and law firms. Huron has
worked with more than 425 health systems, hospitals, and academic
medical centers; more than 400 corporate general counsel; and more
than 350 universities and research institutions. Learn more at
www.huronconsultinggroup.com.
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Huron Consulting GroupJennifer Frost
Hennagir312-880-3260jfrost-hennagir@huronconsultinggroup.com
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