Build a law department and cut outside counsel fees in half (Glatfelter)

In 2005, $1.1 billion specialty-paper producer Glatfelter brought in its first general counsel. Since then that general counsel, Jeffrey Norton, has added three lawyers, one being a contract attorney on assignment to the company. As reported in GC Mid-Atlantic, May 2007 at 8-9, the legal department also hired two legal assistants. The article states that “The restructuring of the legal department reduced the company’s spending on outside counsel fees by more than 50%.”

If Glatfelter’s total legal spending was at the typical mark of 0.5 percent of revenue, it would have spent approximately $5 million on outside counsel when it decided to create an in-house department. If the four lawyers cost an average of $200,000 each and two assistants paralegals $50,000 each, then with benefits and other costs of a law department the internal spend might be approximately $1.5 million. If that be true, Glatfelter’s in-house investment quite plausibly reduced outside counsel fees by $2.5 million.