Statistics show that general counsel are worried about some kind of economic downturn in the next year, however, those who work with in-house counsel say day-to-day operations aren't changing just yet.

Michael Sachs, a partner at Major, Lindsey & Africa's in-house group in Chicago, said while he has not noticed a significant increase in hiring, he has also not gotten phone calls from general counsel asking to cancel searches for new in-house attorneys because of a looming economic downturn.

"GCs are spending some time thinking about it because it's been the news," Sachs said. "Smart GCs are thinking about how they're going to handle things while it happens."

As more reports surface that an economic downturn is coming, in-house counsel are going to be paying more attention to how the business is doing.

According to a survey published in November by Altman Weil, 76% of chief legal officers and general counsel in the United States believe a recession is coming and already is impacting their overall budgets.

"The context of the 2019 survey, conducted in September and October 2019, includes a greater measure of economic uncertainty than in recent years, arising from the threat of a recession, unpredictable trade policy and a more volatile geopolitical environment," James Wilber, a principal at Altman Weil, said in the report.

The report shows a decrease in the number of legal departments who have increased their outside legal spend. According to the report, only 40% of legal departments increased their legal budgets in 2019. That number is down from 53% of respondents who said they increased their budgets in 2018. Thirty-eight percent of respondents said they decreased their spending in 2019. Only 37% of departments increased their outside counsel spend in 2019.

"This pullback on law firm spending may reflect the results of doing more work in-house, the use of lower-priced firms or non-firm alternatives, renegotiated rate packages, or some combination of these and other cost-control efforts," Wilber said.

Justin Ergler, director of alternative fee intelligence and analytics at GlaxoSmithKline, said he has not been in any meetings where leaders have asked him about new and cheaper fee arrangements with firms.

Ergler said the recession in 2008 forced legal departments to shrink their budgets and be more careful on how they spend money on outside counsel. However, he said, even in a good economy, general counsel have not been given a green light to spend more money.

"While the economy has recovered since 2008, I don't think that there was an inflection point where companies said we no longer need to worry about legal costs," Ergler said.

He added he thinks companies will be better prepared for the next economic downturn and said law firms are increasingly getting used to the idea of moving beyond the billable hour.

"If law firms are going to continue to be profitable during an economic downturn, they'll need to get used to the idea of non-hourly alternative fees along with investments in technology."