Corporate Legal Spend Falls to Six-Year Low — But Outside Counsel Share Ticks Up

The ACC's 2026 Law Department Management Benchmarking Report documents a significant structural compression in corporate legal budgets: legal spend as a percentage of revenue fell to 0.43%, down from 0.53% last year and the lowest reading in six years. Median employees per in-house lawyer rose from 300 in 2021 to 367 today, confirming that in-house teams are absorbing more volume without proportional headcount growth. Yet outside counsel's share of total legal spend rose modestly to 47% from 45%, suggesting that firms willing to take on strategic and complex matters still have a clear lane — provided they can articulate why they belong there. ALSPs and technology remain at only 3% and 5% of spend respectively, indicating the structural shift toward alternative providers is still early but accelerating. With 25% of departments using AFAs — predominantly fixed and flat fees — BD teams should treat pricing flexibility as a minimum threshold for competitive positioning, not a differentiator.