BTI Study Shows Corporate Counsel to Bring $4 Billion In-House

by | Sep 19, 2016

BTI Study Shows Corporate Counsel to Bring 4 Billion In House -

A new BTI Consulting report indicates corporate legal departments intend to move a whopping $4 billion in outside legal spend back in-house. The findings were reported on BTI’s The Mad Clientist Blog. According to the blog report, more than half of in-house counsel believe law firms either don’t want to, or, simply can’t change. As a result, corporate clients are taking matters into their own hands and beefing up their internal legal teams.

According to the report, clients are looking to save both time and money and are unwilling to accept the current status quo. Corporate counsel cites “increasing rates, runaway scopes of work and inability to leverage the relationships they have in place to benefit from their current firms’ institutional knowledge,” as a main motivation for moving the work back to the legal department.

In addition, the report concludes the type of legal work being moved back in-house falls mainly into the following categories:

  • Commercial Litigation
  • IP Litigation
  • Investigations
  • Environmental
  • Real Estate
  • Smaller M&A
  • Licensing

Adding further insult to injury, earlier this year, LexisNexis released its 2015 Annual Year-End Enterprise Legal Management (ELM) Trends Report indicating a majority of corporate clients (56 percent) are forgoing hiring new firms to handle their significant legal work this year. On the bright side, the Mad Clientist did outline a few ways law firms can set themselves apart in an increasingly demanding legal market. Consider the following insights:

  • Offer Training Assistance. Even if clients decide to move some business back in-house, use the opportunity to offer to train their staff and solicit regular feedback in order to offer help and resources, as needed.
  • Embrace AFAs. Find out why clients are moving business back in-house and see if there are opportunities to leverage AFAs to turn potential business challenges into opportunities.

While this may be unwelcome news to law firms making their way in a fiercely competitive legal market, LexisNexis data indicates the risk of losing a client drops to less than 10 percent when clients have relationships with five or more partners at a firm.

In other words, for firms looking to build business it is paramount to find opportunities to make the right connections, to the right resources within the firm. After all, experts agree, keeping paying clients happy, first and foremost, is by far best business development strategy.







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