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A majority of corporate legal departments believe it is more important to maximize existing internal resources to control costs than to actively hire new in-house attorneys, according to the 2019 HBR Consulting Law Department Survey released on Tuesday.

Most respondents indicated they expect their legal needs to increase in 2019. However, the majority believe they should use the resources they have rather than hiring more in-house staff. Only 37% of respondents reported an increase in in-house legal staff in 2019. Last year, 52% of respondents to the survey said they hired more legal staff.

"We've seen over the last couple of years that law departments are building internal capabilities to do more work in-house," Lauren Chung, managing director at HBR Consulting, said.

Rather than hiring more attorneys or looking for additional outside counsel, legal departments are increasing the workload of existing resources, standardizing work processes, and redistributing work to more appropriate resources.

Chung said there are a number of contributing factors to why companies want to do more work in-house.

"Law departments are seeing from a cost-control perspective that doing more internally costs less," Chung said.

She explained that law departments are recognizing how to allocate work internally.

"Law departments are beginning to think much more strategically about what work is going to whom," Chung explained.

Finding ways to bring more work in-house is only partially due to the rise in legal operations, Chung said.

"I think legal operations has a role in that for sure, but I think it is strategically from a GC's perspective trying to think about legal demand increasing and legal budgets are not at the same rate," Chung said. "I think it's about law department leadership looking at alternative options."

Law departments overall have become more used to the idea of using alternative legal service providers, according to the report. Chung said there has been an 11% increase in the number of companies who are willing to use nonlaw firm resources for work.

More than costs, Chung said, law departments are focusing on service delivery and are finding that law departments can be the most effective service for their client, rather than a law firm.

"It is cost control, but it is also law departments looking for new service delivery models. It is a desire to recognize that law departments built internal capabilities over the last several years by bringing work in-house," Chung said.

She explained that alternative legal service providers can help tap into the flex resourcing model.

"These types of alternative models for service delivery, I think, is what is driving law department leadership to explore ALSPs more than ever," Chung said.