Managing costs has become a priority for most law firms. Law departments can utilize legal spend management solutions to determine the most beneficial staffing ratios. According to a new report from Wolters Kluwer ELM Solutions, law firm partner utilization in the “average” corporate legal department (CLD) stood at 38% in 2021, barely receding from the 7-year high reached in 2020. The report examines the varying mix of law firm partners, associates and paralegals being assigned to different corporate legal department matters. It also shows that paralegal time represents just 1.5% to 2.5% of the dollar amount found on outside counsel invoices.
The study is the fourth in a series of ongoing LegalVIEW Insights reports sourced from ELM Solutions’ LegalVIEW database. It reveals how knowledge of how staffing ratios vary by Am Law tier or matter type can help legal departments drive cost savings.
An analysis by Nathan Cemenska, Director of Legal Operations and Industry Insights for Wolters Kluwer ELM Solutions, indicates that while staffing numbers are relatively stable at a market level, they vary greatly among individual CLDs. The most common scenario finds that between 45% and 50% of law firm hours are billed by partners, while 25% to 30% stem from associates – but understanding the unique staffing ratios deployed by their own outside counsel will enable in-house legal teams to allocate work more strategically.
The report also consider that staffing ratios vary greatly across Am Law tiers. The Am Law 10, for instance, typically generate fewer partner hours as a percentage of overall billings. However, 67% of Am Law 151- 200 firms generate the majority of their hours through partners.
In concomitance with the LegalVIEW Insights reports, ELM Solutions is producing an ongoing series of LegalVIEW Insights blogs, webinars and other content discussing the emerging trends from the LegalVIEW Data Warehouse.