Law departments are the largest segment, by headcount and expense, delivering legal services to business. Law departments are also the primary buyers of all legal services in the United States, period. The in-house revolution is the most important story in the legal sector over the last three decades. Since the middle of the 1990’s, in-house departments have grown at almost 7x the rate of law firms and now account for 54% of all corporate legal spend.

Law departments have never been more prominent nor more powerful. They have also never been so under-resourced relative to business needs. Law departments are in dire straits.

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Insourcing has largely been driven by a savings obsession predicated on labor arbitrage—i.e., buying lawyer hours in bulk at a discounted flat fee. Law departments have largely delivered on their savings mandate but with the unintended consequence of being trapped in an endless savings cycle that ultimately results in resourcing insufficient to meet the ever-escalating needs of the business, especially in light of intensifying legal complexity.* Law departments can simultaneously be a driver, reflection, and victim of organizational complexity.* There is good reason in-house counsel are burned out while also being labeled the Department of Slow.

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Law departments are not designed to solve for scale. Yet solving for scale is the modern law department’s fundamental challenge. Innovation* in the service of strategic alignment is simultaneously (seemingly) impossible and imperative.

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Our own annual years in review (here and here) offer a starting point for further reading.