2002: Steady State 2001 NERA Legal Leading Indicators Survey
27 December 2001
By Dr. Richard Rapp
How will U.S. corporations adjust their spending on outside legal counsel in 2002? Will the recession rein in spending, or will economic factors be less of a concern, as businesses call on outside firms more to help navigate through a changing regulatory landscape and rising litigation?
It turns out that companies may be headed in both directions, according to NERA's new survey on law department spending. In its first-annual “Legal Leading Indicators” survey, NERA found that more than a third of the county’s largest corporations (38 %) say they plan on decreasing their spending for outside lawyers, although the decrease is not expected to be dramatic. The percentage of spending on outside counsel, as a share of overall spending, is expected to slip from 53.5% in 2001 to 51.6% in 2002. At the same time, 23% of companies projected an increase in outside law firm spending.
Even the projected decrease is not across the board. For a few key specialties, notably labor & employment and regulation, the percentage of companies that anticipate increasing outside legal budgets was greater than those anticipating a decrease. The same pattern emerged for international work -- more companies than not expect to increase spending for legal work outside the United States.
The survey is based on interviews with 302 firms with annual revenues of $500 million or more.
