Technology and pharmaceutical companies are the most lucrative clients for law firms, according to a new survey of European in-house legal departments.
Technology companies spend up to €1m (£690,000) per lawyer on outside counsel, while pharmaceutical companies were a close second at €917,000 (£629,500). The average across all in- dustries was €333,000 (£228,500), according to the survey by recruitment consultancy Laurence Simons and management con- sultancy Hildebrandt Inter-national, which covered 98 in-house legal departments across Europe.
The same industries had the highest legal spend per lawyer, according to the survey, with nearly half the technology companies surveyed showing a total legal spend of more than €1m. The top spend was €2.3m (£1.6m).
A pharmaceutical company had the highest overall spend at €2.6m (£1.8m) per lawyer, with another reporting expenditure per lawyer of €1.8m (£1.2m). The survey average for this category was €847,000 (£581,400)
Technology companies reported that they were prepared to spend up to 4 per cent of their total revenue on legal issues. Large-scale M&A deals or litigation in this sector could account for the higher spend.
The technology practices of City firms have been faring well recently. Clifford Chance‘s communications, media and technology (CMT) practice recently racked up £8.5m in fees on a jumbo outsourcing deal for ABN Amro. Herbert Smith also secured its first deal for IT service giant LogicaCMG, with its £627m takeover of French rival Unilog.
Pharmaceutical deals have also been in the headlines, the most obvious being Allen & Overy‘s role advising Alliance UniChem on its proposed merger with Boots, which is taking advice from Slaughter and May.
Naveen Tuli, a partner at Lawrence Simons Inter-national, said that technology and pharmaceutical companies accounted for more than 60 per cent of recruitment work.
“Without a doubt those are the two sectors that keep us busy,” Tuli said. “IT and telecoms were quiet from 2001-2003, but pharma and biotech companies have been consistently in demand, mainly because the sector is so heavily regulated.”