Companies relying more on corporate counsel: survey

Companies relying more on corporate counsel: survey
In the past five years, how has the perceived standing of Canadian corporate counsel changed? Source: Deloitte & Touche LLP
Facing a bad economy, more complex regulations, and higher risk, Canadian companies have been relying much more on their corporate counsel over the past five years, according to a recent survey.
While 72 per cent of Canadian companies saw their in-house lawyers as first responders to business legal issues five years ago, that number is now up to 97 per cent, according to the recent findings of the global survey by accounting and professional services firm Deloitte & Touche LLP.

In-house lawyers’ role in how legal services are provided also grew, as more work was done in-house.

“This evolving relationship between companies and their corporate counsel has led to a change in the way companies react to a serious legal or regulatory issue: their first point of contact is now corporate counsel, rather than relying on an external law firm,” the survey’s authors note.

The findings suggest companies have become more reliant on in-house counsel particularly for advice regarding regulatory compliance, risk management, and ethics.

“The growth of the in-house legal profession has also influenced delivery, particularly how and where law firms are providing services,” says the study. “Corporate counsel have a greater influence on the way legal services are provided, resulting in a reduction of outsourced legal work and requests for external help only when needed.”

Canadian in-house lawyers have key roles in their organizations and are more likely to be involved in management teams, the survey finds, but don’t have as much access to membership in their corporate boards as counterparts in other countries.

The survey says 81 per cent of Canadian respondents said they are members of the executive team, but only three per cent are also members of the board of directors. Globally those numbers are 61 and 13 per cent respectively.

The survey had 134 Canadian respondents, 49 per cent of whom were general counsel, chief legal officers, or equivalent, and the rest worked at other levels in the legal departments. Canadian trends were compared with those of nine other global jurisdictions such as the United States, Mexico, Australia, United Kingdom, and Southeast Asia.

The findings are in line with similar studies done in the past few years, including last year’s Canadian Lawyer annual corporate counsel survey.

Some other key findings of the Deloitte study include:

•    The standing of Canadian corporate counsel in the legal profession has improved more in the last five years than for their global counterparts: 72 per cent said it has improved in Canada versus 62 per cent globally.

•    Canadian organizations reported issues with managing the volume of electronic documents: 81 per cent in Canada versus 76 per cent global.

•    They also face challenges getting co-operation of the business units: 42 per cent in Canada versus 36 per cent globally.

•    Despite having a preference for e-mail communication, Canadian corporate counsel are less likely than their global counterparts to receive advice from law firms through that medium: 46 per cent in Canada versus 76 per cent globally.

•    Regulatory disputes in Canada remain largely resolved through negotiated settlements — that’s the case 75 per cent of the time.

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