The Australian Corporate Lawyers Association and Corporate Lawyers Association of New Zealand have released a supplement report for law firms following their bi-annual survey of Australian and New Zealand organisations.

According to the supplement, total legal spend by an organisation jumps dramatically once the organisation exceeds turnover by A$1 billion or more per annum or more than 2000 staff. It also found that external legal spend increases when the size of the legal team increases.  Law firms receive 89 percent of the survey respondents’ legal spend according to the report.

The finance and insurance sectors are the most likely to be “legal reliant” and utilise a significant amount of external legal advice. The most common form of advice sought from external suppliers, according to 91 percent of respondents, is contract and commercial advice. The second most common form required is litigation and dispute resolution.

Overall only 29 percent of respondents use legal panels, although amongst government respondents that figure percentage jumps to 51 percent. Companies with an annual turnover of more than A$1 billion are also more likely to use panels (58 percent).

Alternative billing still remains limited across the spectrum of respondents included in the report. Overall 29 percent use alternative billing options. Again, organisations with a turnover of more than A$1 billion are more likely to utilise alternative billing (37 percent) than companies with a lower turnover.  Of those organisations that utilise alternative billing arrangements, 93 percent use fixed price billing, compared to 39 percent using volume base and 21 percent using risk or reward billing arrangements.  A small six percent of organisations utilise Legal Process Outsourcing.

Looking ahead at the next two years seven percent of respondents expect to increase legal budgets “significantly” while 43 percent expect to increase them “slightly” and 36 percent expect  them to remain steady. In terms of increasing legal teams, 45 percent expect to make slight increases, while 42 percent expect teams to remain steady.
 

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