WSJ carries the story.
Law Firms Face New Competition — Their Own Clients
Law firms are contending with growing competition from their own clients.
Many companies are cutting back on their use of outside law firms, and having staff attorneys handle midlevel deals or contracts, reports WSJ's Jennifer Smith:
This year corporations are shifting an estimated $1.1 billion that they used to spend on outside lawyers to their own internal legal budgets, according to a new data analysis. That migration cements a trend that took off during the recession, when general counsels were under pressure to rein in costs, and spiked in 2012, when companies redirected $5.8 billion in legal spending in-house.
About 58% of larger companies are sending more legal work to their own law departments this year, compared with 50% in 2013, according to the analysis by BTI Consulting Group Inc.
It is cheaper, some general counsels say—and often more efficient.