Huron Consulting Group Releases Fifth Annual IMPACT Benchmarking Survey to Track Legal Spend

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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