More work for in-house departments

Once again in this issue, we share the results of the annual Canadian Lawyer corporate counsel survey, which gauges the relationship between in-house counsel and their outside legal service providers. It’s not surprising that one of our main findings is that the economy, and its current state of instability, is having an effect on corporate law departments.
According to our survey, 64 per cent of respondents said they are looking to bring more legal work in-house, particularly if the economy continues its downward trend. Even if there is an improvement in the economic outlook, 61 per cent said they will not send more work outside their organizations, and 57.4 per cent said they will be implementing new cost-cutting measures with the firms they currently deal with.

A survey conducted by the Association of Corporate Counsel and released at its annual meeting in Denver at the end of October showed a similar trend. Of the respondents to that survey, 76 per cent of in-house counsel — mostly in the United States — said the recession caused more work for their departments compared to 51 per cent in 2009. The ACC poll showed that law departments are dealing with their greater workload in part by using more paralegals and contract lawyers. It also found about 67 per cent of law departments are lawyers with the rest made up of paralegals and other support staff.

According to the ACC survey, 37 per cent of chief legal officers are planning to hire staff in the coming year, a higher number than reported in 2009 and 2008. Over the last year in Canada, in our survey 48.5 per cent said there was no change in the size of their legal department, while 31.3 per cent said their department grew as there was more work to be done. It will be interesting with the shifting economy to see exactly what happens on the Canadian front in the coming year.

But with both surveys showing more work coming inside, many law departments are looking to become more efficient rather than just bulking up. Part of that will be cost-cutting measures but also improving processes such as contract management, matter management, document management, and e-billing.

With the number of in-house legal departments growing and the increasing size of and workload for those departments, there’s bound to be growing pains. Going forward, it will be even more important for burgeoning departments to learn from those GCs and CLOs who have implemented systems to make themselves more efficient. At the same time, it’s an opportunity for outside law firms that have experience with the efficient systems of some of their clients to also help, and further show they understand the business needs of, clients by advising on ways to more effectively manage their relationships and the work they do. Everybody wins.

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