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Fears of a recession may be the reason why corporate legal departments are showing caution in spending, according to a survey of chief legal officers by the consulting firm Altman Weil.
Seventy-six percent of the chief legal officers surveyed think there will be a recession in the United States within the next two years, the survey found. Chief legal officers in manufacturing and consumer product companies thought their industries are most vulnerable to recession, according to an Altman Weil summary of the results.
This is the first time that the survey has included a question about a recession, according to James Wilber, the report’s author and a principal at Altman Weil who spoke with Corporate Counsel.
The spending findings:
• Forty percent of law departments increased their total budget in 2019, and 38% decreased overall spending. That is a decline from 2018 figures, when 53% of departments increased total spending and 29% made budget cuts.
• Only 27% of departments increased their spending on law firms in 2019, down from 42% that did so last year. The number of departments cutting spending on law firms was 34% in 2019, up slightly from 32% in 2018.
• Thirty-six percent of law departments plan to add in-house lawyers in the next year, down from 42% in 2018.
The survey, conducted in September and October, garnered 238 responses from chief legal officers, representing about a quarter of the 977 law departments invited to participate.