The inaugural report, compiled by Nathan Cemenska, Director of Legal Operations and Industry Insights for Wolters Kluwer's ELM Solutions, focuses on corporate legal department (CLD) law firm vendor usage. Due in part to the 2020 COVID-19 pandemic and its effect on the economy, every law firm segment was impacted.
From the largest, most prestigious firms to solo practitioners, every group saw a significant number of attorney-client relationships put on hiatus. The mean number of outside providers actively serving the typical corporate law department declined by 12 percent -over-year, and the median number of providers dropped by 16 percent compared with 2019.
Additional highlights from the inaugural LegalVIEW Insights report include:
- Am Law 150-200 firms were those most likely to have clients go on hiatus, followed by firms outside the top 200.
- In the last six years, approximately 32 percent of CLDs sent half or more of their work, in dollar volume, to the top 100 global law firms. Some CLDs consistently send 75 percent of their work to those top firms
- The extent to which CLDs send work to those 100 largest firms did not change much year-over-year. Forty-six percent of CLDs show less than 15 percent variance in their utilization of those firms over the last six years.
- Most CLDs consolidated 80 percent of their work into 20 percent or fewer of their vendors, a recognized best practice that reduces administrative overhead and creates opportunities for volume discounts. However, the data shows a few outliers, with 80 percent of work given to as high as 43 percent of their vendors.
- In 2020, larger law firms tended to experience market share growth, while smaller firms lost market share. Conversely, unranked law firms saw their market share decrease by more than two percentage