In-house legal trends in California are largely similar to the rest of the country, however, more legal departments in the Golden State have increased outside counsel spend compared to their counterparts in other states, according to data collected by HBR Consulting.

At the beginning of November, HBR Consulting collected data from the legal departments of 207 companies nationwide. Thirty of the law departments that responded are in California.

Like law departments in the rest of the country, cost control for legal departments in California remains a high priority. Companies in California reported an 8% increase in legal spend this year. Specifically, legal departments in California reported an 18% increase in outside counsel spending. Nationwide, companies reported an average of only a 3% increase in outside counsel spend.

"We saw nationally that there are other methods of addressing legal demand," Lauren Chung, managing director at HBR Consulting, said.

Chung said the increase in outside counsel spend in California may have to do with the number of different legal services or alternative legal service providers in the area.

Where legal departments in California are ahead of their counterparts elsewhere is in the use of legal technology and legal operations. The data shows that 100% of California respondents have an electronic billing system in place and 89% have implemented matter management systems. The top technology used by other legal departments in the rest of the country is board management systems and only 84% of respondents nationwide indicated that they have a board management system in place.

Chung said she's found legal departments in California are more open to the use of technology. That openness to trying new technology, she said is largely driven by legal operations, which California also appears to be ahead of the rest of the country's corporate legal departments.

"Legal operations is what is driving technology initiatives," Chung said.

The survey showed that 57% of legal departments in California have a team of individuals with formal legal operations responsibilities. Only 43% of companies in the rest of the country indicated they have a dedicated legal operations function.

Chung said because of organizations like the Corporate Legal Operations Consortium starting in California, there was an early recognition that legal operations could be an effective cost-saving measure.

"There was an early recognition in organizations to have that perspective; that legal operations can have a significant role in the legal department," Chung said. "It had its roots in California and a lot of momentum built up in that region."

The investment in outside counsel, legal operations and legal technology is all in efforts to meet increasing legal demand. Nationwide, 88% of respondents indicated they are seeing an increase in legal demand because of regulations, new technology and other issues. Eighty-one percent of the California respondents also indicated they are seeing an increase in legal demand.

"The legal demand [in California] is consistent with what we're seeing more broadly," Chung said.

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