Litigation is not eating up all of the legal costs in corporate America, though it is a significant chunk. Among counsel who track litigation costs, about a quarter said that they account for 21 to 50% of their legal budgets; an additional 12% reported that litigation expenses accounted for more than 50% of the total legal budget. Broken out by size, counsel for 15% of mid-market companies and 16% of businesses in the $1 billion-plus range reported that litigation consumes over half of their legal budgets. For companies with revenues under $100 million, that figure dropped dramatically to only 8%. Translated into the bottom line, nearly a quarter of U.S. companies are spending 2% or more of their gross revenues on legal fees; 10% of them spend more than 5%. Separated by industry sector, 23% of insurance company in-house counsel reported that their litigation budgets account for over half of their total legal budgets. Over a third of manufacturing and energy companies spend between 21% and 50% of their legal budgets on litigation; the same is true for more than a quarter of retail/wholesale, health care and tech/comm companies. In contrast, 26% of real estate and finance company respondents reported spending less than 20% of their legal budgets on litigation.

Reference: http://www.newaccountantusa.com/Litigation.pdf