June 20, 2007 — New York, NY, June 20, 2007 - The 2007 Chief Legal Officer Survey, conducted annually by Altman Weil, Inc. and LexisNexis has just been released. The survey reports plans for increased staffing in law departments as well as increased use of outside counsel.

Inside Staffing

Forty percent of Chief Legal Officers (CLOs) participating in the survey plan to extend their in-house capabilities by hiring additional lawyers in the next twelve months, up from 36% last year.  In addition, law departments report they have added an average 1.7 completely new positions in the last two to three years.  This number tripled from .57 new positions per department reported in the 2006 survey.

The most frequently added new position in law departments was an attorney with specific practice expertise.  When asked about greatest future staffing needs, a specialist attorney was again ranked number one.

“Law departments are trying to find areas of practice where they can add the most value to their corporation – and bringing in a specialist can do that, as long as the economics of internalizing the work justify it,” explained Altman Weil principal Daniel J. DiLucchio.

Outside Counsel

Within the next twelve months, 18% of law departments plan to increase their use of outside counsel, up from 14% last year

The survey also examined satisfaction with outside counsel, reporting that 32% of CLOs have fired or are considering firing at least one of their outside law firms this year.  The reasons for their dissatisfaction were:  ‘mishandling a critical matter’ - named most often, followed by ‘poor quality legal work,’ ‘lack of responsiveness,’ and ‘cost management issues.’

When asked what steps outside counsel have taken to improve the working relationship with the law department, the top response was improved communication.  Reduced fees / improved billing practices / budgeting ranked second.  Other relationship building efforts named were complimentary training programs, enhanced responsiveness, and new technology initiatives.

Selecting New Counsel

When choosing from similarly qualified firms on a preferred provider list or when looking for representation requiring a new area of expertise, most CLOs first consult their personal network of contacts, including: law firm relationship partners, inside counsel at other organizations and their in-house staff.

When looking for new counsel in the absence of a personal reference, CLOs turn first to online directories for information. Other options are: reviewing law firm websites, attending legal conferences, checking lawyer rating services and using search engines.

“While personal networking will always be a key factor in outside counsel selection, the use of online resources is important to note,” commented John Lipsey, Vice President of Corporate Counsel Services for LexisNexis Martindale-Hubbell.  “In 2007, CLOs still rely heavily on vertical market directories that provide them deep and meaningful outside counsel profiles, quickly and efficiently.  Law firms with a strong online presence will be the beneficiaries.”

Compliance Remains Top Concern

When asked about their long-term concerns over the next three to five years, Chief Legal Officers identified compliance as number one, followed by staff development and retention, costs, and serving the corporate client.   Compliance has been the top concern for CLOs in each Chief Legal Officer Survey since 2003.

“One of the biggest factors driving the increased need for legal services in corporations is Sarbanes-Oxley compliance, remarked DiLucchio.  “Compliance issues impact law department staffing and training as well as generating new potential liabilities.  It’s not surprising that this is and has been the top of mind concern for CLOs.”

The Survey

The Chief Legal Officer Survey<