According to a new report, law firm staffing ratios may be relatively stable at a market level, but they vary greatly among individual corporate legal departments (CLDs).
As discussed in this press release (Wolters Kluwer ELM Solutions’ fourth LegalVIEW Insights Report shows a wide range in law firm staffing ratios), law firm partner utilization in the “average” CLD stood at 38% in 2021, barely receding from the 7-year high reached in 2020 while less costly paralegal time represents just 1.5% to 2.5% of the dollar amount found on outside counsel invoices.
As for law firm staffing ratios, 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.
Additional highlights from the fourth LegalVIEW Insights report include:
- Only 6% of CLDs demonstrate “very heavy partner utilization,” whereby 50% or more of all law firm hours are billed by partners. Conversely, another 6% of CLDs show “very low partner utilization” with partners responsible for billing only 5% of hours or fewer.
- The type of legal matter at stake can also impact staffing ratios. For example, paralegals account for 23% of all hours billed in general liability litigation, but represent only 4% of hours billed in environmental litigation.
- 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.
The analysis was conducted by analysis by Nathan Cemenska, Director of Legal Operations and Industry Insights for Wolters Kluwer ELM Solutions and the fourth LegalVIEW Insights report contains seven insights regarding law firm staffing ratios. You can download the fourth LegalVIEW Insights report – as well as the first three reports – here.
So, what do these numbers mean? It may depend on the CLD. Regardless, the report contains a lot of interesting trends and Cemenska’s analysis of those trends and what they could mean to CLDs. Check it out!
So, what do you think? Is there a preferred mix for law firm staffing ratios to support corporate legal departments? Please share any comments you might have or if you’d like to know more about a particular topic.
Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer, my partners or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.