ACC And Major, Lindsey & Africa’s Industry-Leading Law Department Management Benchmarking Survey Offers New Insights on Legal Staff Breakdown by Specialization, Legal Spend on Internal Staff Vs. External Resources, Legal Technology Spending and More

Washington, DC – The Association of Corporate Counsel (ACC) and Major, Lindsey & Africa (MLA) have today announced the release of their industry-leading annual legal benchmarking survey. The fifth report resulting from this partnership looks at some new data that focuses more on staff composition, workload allocation, and legal technology spend, the latter of which represents a relatively small portion of overall legal spend, with smaller companies allocating a higher proportion of their legal budget to legal technology. Additionally, the report found a growing adoption of legal technology solutions that support specific tasks, including a steady rise in the adoption of AI-powered legal technology tools.

In terms of core legal functions, similar to last year, privacy (57 percent), compliance (56 percent), and ethics (52 percent) are the three most common functions included in the legal department’s responsibilities.

The executive summary provides high-level survey results on headcount & structure, cost management, work allocation, law firm & ALSPs usage, and diversity metrics. Findings are based on responses from 421 legal departments in organizations spanning 24 industries and 32 countries.

“The ACC/MLA Law Department Management Benchmarking Report continues to adapt to capture critical and timely data law departments need to improve efficiencies,” said Veta T. Richardson, president & CEO of ACC. “In today’s ever-evolving business and legal environment, law departments are continuously being asked to do more with less. This report provides CLOs and general counsel the comprehensive and nuanced insights they need to make informed decisions regarding staff specialization, work allocation, internal vs. external spend, legal technology spending and adoption, and so much more.”

“Starting in the pandemic years, in-house legal departments saw their roles expand as they were called upon to deal with a range of unprecedented issues, like labor and employment, health and safety, and return-to-office. Now, we continue to see the responsibilities of an in-house legal professional further evolve as they grapple with new challenges around the advent of burgeoning technologies like AI,” said Lee Udelsman, Managing Partner in MLA’s In-House Counsel Recruiting group. “As a result, we’re seeing increased specialization particularly in terms of legal tech spending, as in-house legal departments maintain a growing focus on compliance and privacy issues.”

Key highlights from the data include:

• When looking at the number of dedicated intellectual property and litigation lawyers in participating legal departments, the report found that 14 percent of the lawyers on staff are dedicated to litigation, while 7 percent of lawyers across all companies are focused on intellectual property matters.
• Outside counsel spend comprises a considerable portion of external legal costs, accounting for an average of 87 percent of the total outside legal budget. Litigation (excluding intellectual property) is the most expensive category within outside counsel spend.
• Fifty-three percent of legal tech spending is contained entirely within the legal department budget, but the strategy shifts when it comes to larger companies which are opting for shared services models where the legal tech budget is shared between the legal department and other business functions. Additionally, there's a rising trend in adopting specialized legal tech tools, such as compliance office tools (37 percent), matter management systems (36 percent), and AI-powered solutions (34 percent).

“Privacy” Remains the Most Common Business Function Overseen by Legal

About 50 percent of respondents indicated that compliance, privacy, and ethics fall under the scope of the legal department, with privacy (57 percent) still being the top function overseen by the CLO.

Total Legal Spend Increased

Total legal spend across participating companies increased from $3.1 million in 2023 to $3.8 million this year. The survey found that total legal spend increased dramatically by company size, with companies with revenue between $1 billion and $5 billion spending a median of $6 million on legal, while those with revenue between $5 billion to $10 billion spent almost $32 million.

Total legal spend as a percentage of company revenue decreased in this year’s survey to 0.5 percent of company revenue compared to 0.63 percent last year. However, the total inside/outside spend distribution has remained roughly the same, with 52 percent of total spend going to internal costs and 48 percent being allocated to outside costs.

Slight Increase Reported in Tracking Diversity Metrics

In 2024, 32 percent of departments reported tracking internal diversity metrics, compared to 28percent in 2023 and 29 percent in 2022. However, the survey found that progress has been limited when holding outside counsel accountable for diversity. Participants highlighted the absence of formal metrics, a narrow view of DEI, and lack of enforcement as major challenges to tracking diversity.

Using data from this survey, ACC and MLA offer custom benchmarking reports, providing organizations a true comparison to their peer group based on six criteria. To help put this data into action, MLA’s Advisory Services consultants provide customized solutions in organizational and operational design as well as strategic learning development.  Companies can also obtain guidance through the ACC partnership with Smarter Law to highlight specific areas and actions legal departments can take to help reduce costs and improve efficiency.

To access the executive summary report which contains a high-level overview of the survey results and key trends compared to the 2023 edition of the survey, please contact either Dan Weber (d.weber@acc.com) or Kerry Close (kclose@groupgordon.com). Full survey results - broken down further by company revenue, industry, legal department size, and company type — are available for purchase on ACC’s website.

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About ACC Research: ACC Research provides data-driven insights through survey reports and white papers as well as benchmarking reports and advisory services to support informed decisions by in-house legal professionals.

About ACC: The Association of Corporate Counsel (ACC) is the premier global legal association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other organizations through information, education, networking, and advocacy. For more than 40 years, ACC has set the standard for in-house counsel and raised awareness regarding the value of the chief legal officer in the C-suite and boardroom. With more than 45,000 members employed by over 10,000 organizations and spanning 100+ nations, ACC connects its members to the people and resources necessary for both personal and professional growth. By in-house counsel, for in-house counsel® remains the foundation for ACC’s market leadership. For more information, visit www.acc.com and follow ACC on LinkedIn, Twitter, and Facebook.