Corporations are using fewer law firms because short-staffed corporate legal departments have little time to manage outside firms, according to new research.

The study, carried out by BTI Consulting Group, canvassed 550 companies with average revenues of £16bn and average annual legal spend of £12m.

Companies surveyed said they expect to have on average two primary law firms by 2012, six secondary firms and 23 other firms they sometimes use. That compares with a 2008 average of two primary law firms, nine secondary firms and 32 other firms.

In 2007, the companies on average worked with two primary, 10 secondary and 40 other firms.

Corporations' efforts to trim their list of law firms, known as convergence, is a long-term trend, but in the current climate, money was not the only issue cited by companies.

BTI president Michael Rynowecer commented: "Corporate counsel are saying, 'I don't have time to be managing law firms; I just cut my staff by 20%.'"

Corporate counsel are also indicating a reluctance to work with firms that are not flexible in billing, staffing matters and communicating with the client, Rynowecer said. Companies' increasing demands for flexibility create opportunities for smaller firms, and BTI research shows the same companies making a marked migration to smaller firms.

According to the data, companies have fewer relationships with Am Law 100 and 200 firms – the US's top 200 revenue-producing firms, as ranked by The American Lawyer.

The research showed 36% of the firms the companies worked with in 2008 were Am Law 100 firms, 26% were Am Law 200 firms and 38% were outside the Am Law 200. In 2007, 64% of the firms the companies worked with were in the Am Law 100, 13% were in the Am Law 200 and 25% were outside the Am Law 200.

"If you put together the fact that companies are embracing smaller firms at same time they are reducing the number of law firms they are using, it is real, it has traction and clearly there is new behaviour," Rynowecer said.

This article first appeared in The National Law Journal, a US sister title of Legal Week.