2003 Legal Services Spending Assessment Survey (LSSA) Reports an Increase in Spending For Outside Counsel.

General Counsel were surveyed at Fortune 1000 companies to determine what affects their spending/retaining of outside counsel. Despite the fact that over 70% of respondents expect and increase in spending in areas of regulation, corporate transactions and securities, the results go on to indicate that the decision to retain a particular firm is largely unaffected by marketing/branding efforts.

Boston, MA (PRWEB) December 26, 2003 --According to the 2003 Legal Services Spending Assessment (2003 LSSA), a recent benchmark survey conducted by The Corporate Counselor and CeME, the Center for Marketing Effectiveness, general counsel surveyed from leading US companies identify increased corporate pressure to reduce spending on outside counsel. However, despite cost-cutting efforts, the majority of general counsel continues to observe an increase in spending on outside counsel.

The study, published by American Lawyer Medias Corporate Counselor, explores the issues that require corporations to look beyond their own walls for legal expertise. In 2004, over 70 percent of respondents expect to see substantial increases in spending in the areas of regulation, securities litigation and corporate transactions.

In addition, the 2003 LSSA suggested several reasons – most driven by the current economic climate – for increased spending on outside counsel:

o   An increase in workload
o   Legal issues that require specialized expertise
o   Internal staff cuts

According to the study, general counsel points to quality of work and results as the top two major factors for consideration when selecting outside counsel and rate these criteria above both value and cost. Corporate counsel also reports that the more serious the litigations repercussions, the more important track record becomes.

The study goes on to show that general counsel is largely unaffected by law firms efforts to brand and promote their services rating websites" and publications" markedly lower than the more traditional referral" and personal contacts" route for making decisions when considering retaining outside counsel.

Summary of findings from the 2003 LSSA:

1.   General Spending Trends. Legal departments spent more on outside counsel in 2003 than in 2002, with the trend expected to continue in 2004. And 60% of those surveyed spend more than half of the companys total legal spending on outside counsel.

2.   Spending by Practice. Demand for outside counsel is driven largely by regulation (60% expect an increase in 2004) and corporate governance (40% expect an increase in 2004) matters. 20% expect intellectual property spending to decrease in 2004 with regards to outside counsel.

3.   Retention Factors. Quality of work (95.6%), results, and client service (each at 86.7%) drive outside counsel retention – even more than value (71.1%) and cost (62.2%). The significance of this finding is accentuated for bet-the-company" issues such as regulation and antitrust.

4.   Selection Factors. Only 14% of general counsel (those predominantly responsible for the selection of outside counsel) place any emphasis on the traditional activities associated with law firm branding preferring to utilize less commercial channels such as referrals or personal contacts rather than consulting existing firm websites.

5.   Industry Spending. Companies operating in the health care and insurance industries witnessed the biggest increases in outside counsel spending with overall spending decreasing in the automotive and telecommunications sectors.

Efforts to further validate the findings from the 2003 LSSA will be conducted over the coming months. For more information or a copy of this report, please contact Laura Steiglehner at CeME, the Center for Marketing Effectiveness, 617.308.3168, laura.steig@cemeinfo.com.

About the Center for Marketing Effectiveness

The Center for Marketing Effectiveness (CeME) is a business-to-business consulting firm that provides results-oriented marketing strategies to various industry sectors. CeMEs portfolio of On Demand Marketingsm services provides a way for firms to lower the total cost of ownership for their marketing while improving its quality and effectiveness. www.cemeinfo.com

About The Corporate Counselor
The Corporate Counselor, a division of American Lawyer Media, publishes a monthly newsletter addressing the diverse needs of attorneys. Edited by lawyers, for lawyers, each newsletter features articles written by the top experts in their respective fields. A professional staff of attorneys and seasoned editors make sure that the latest cases, precedents and rulings are analyzed and presented to its readers in a timely and easy-to-read manner
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