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Average external legal spend Average legal spend (total) $3,570,000 Average legal spend (within Canada) $3,238,000 $0 $1,000,000 $2,000,000 $3,000,000 in-house, and are therefore able to keep their external spending at a lower level. With a variety of small fi rms with de- Average external legal spend — by industry Government Financial $898,700 $885,700 $5,490,000 $5,320,000 Industrial/manufacturing Resource-based Service Technology Non-profit $0 $6,027,800 $5,500,600 *Inadequate number of responses to provide an accurate figure. $3,594,600 $4,491,700 $2,330,000 $2,226,000 $225,000 $225,000 $1M $2M $3M 4M Total Within Canada 5M 6M 7M cent budgets for outside counsel, there should be plenty of opportunities for fi rms looking to take on some of this work. Or, to take the work from others. Forty-four per cent of respondents say most of the work being done by their primary external legal provider could be done equally well by their nearest com- petitor. A third of the corporate respon- dents say that several other fi rms could do the work equally well, not limiting it to those who may typically be perceived as the "close competition." Th at gives a lot of wiggle room to secondary or ter- tiary providers and provides somewhat of a wake-up to fi rms that may feel they are entrenched. No fi rm wants to be considered eas- Average external legal spend — by department size $7,627,300 Less than 5 6 to 15 16 to 30 31 or over $1,407,400 $1,304,800 $7,043,700 $1,466,700 $1,400,000 Total Within Canada *Inadequate number of responses to provide an accurate figure. $0 $1M $2M $3M 4M 5M 6M 7M ily replaceable, so what can be done to stay ahead of the pack? Th e fi rst step to coming up with a solution is defi ning the problem — but it appears that sur- prisingly little is being done by fi rms on that front. Less than eight per cent of the in-house departments claim to have re- ceived a written quality satisfaction sur- vey from their fi rm in the past 12 months. With our survey showing an average ex- ternal legal spend of over $3.3 million on Canadian fi rms last year, outside counsel want to be sure clients are pleased with the results. And some of those depart- ments are spending far more; a few of the top responses came in between $35 to $40 million spent on legal advisers. If fi rms aren't asking whether their clients are happy and how they can improve, Survey respondents by industry Non-profit 6% Technology 12% Service 23% Resource-based 7% Government (municipal, regional, provincial, federal, and First Nations — including boards and tribunals) 25% Financial 11% Industrial/manufacturing 16% www. 6 to 15 23% Survey respondents by department size 16 to 30 7% 31 to 50 4% 51 to 100 3% Less than 5 63% Survey respondents by external legal spend $5 to $10 million 4% $2 million to $5 million 10% Over $10 million 10% Under $500,000 35% $1 to $2 million 27% $500,000 to $1 million 15% *Figures do not total 100% due to rounding. mag.com NO VEMBER / DECEMBER 2008 43