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The Law Society recently launched its inaugural benchmarking study for the in-house community, the GC350 Report. LexisNexis is delighted to have sponsored the report as part of its commitment to sharing knowledge to help in-house lawyers thrive in their roles.
The Report surveys 100 senior decision makers about their businesses’ legal needs. It covers areas such as the influence and profile of legal teams, key challenges, budgets, distribution of work and the use of external providers. As well as providing an insight into what’s at the forefront of the minds of members of the sector, this initial report will be used as a baseline against which to measure future changes and trends. It’s an exciting acknowledgement of the growing influence of GCs across the FTSE350 and the contribution they make to the success of businesses.
Key findings in the Report include:
Profile and influence
In over two-thirds of the organisations surveyed, the head of the legal department has a seat on the board/executive board. This connection to strategy is vital to helping the legal team become a trusted and influential business partner. Overall, general counsel believe that their teams are high-profile and influential within the business, being expected to proactively deal with business risks and issues rather than simply handle more mundane day-to-day legal work.
Only a quarter of teams questioned are actively measuring their contribution to the business. GCs are deterred by the difficulty in identifying quantifiable metrics, especially for capturing the monetary value of the legal services they provide.
Challenges for the sector
The key challenges identified by the Report are unlikely to come as a surprise to in-house lawyers: a high volume of work with stretched resources, budget limitations and cost pressures, the complexity of regulation, and the issue of motivation, retention and recruitment within such an environment.
According to the Report, 50% of GCs are responsible for setting their budget. 68% determine how the budget it spent, whilst in 15% of businesses that decision is made by a combination of legal, finance and the board.
The Report also looks at what proportion of legal budget is spent internally and what is spent externally. On average, 58% is spent externally, with a quarter of high level strategic work and almost half of technical work being outsourced.
There is a preference for using traditional formal or informal panels, with alternative legal providers accounting for only 5% of legal spend. The challenge for GCs is how to drive more value from external providers given their high cost compared to internal resource – negotiating pricing models is central to this.
Composition of in-house teams and distribution of work
Paralegals make up only a small proportion of legal teams, with teams preferring to be reliant on qualified staff. As 38% of work is ‘day to day’ legal work, this raises the question of whether more use should be made of lower cost resources. High level strategic work makes up just 28% of the work done by internal teams.
Of the legal teams surveyed, over half have restructured their department or plan to do so in the next 12 months. This isn’t due to the changing role of the in-house team, but rather to factors in the business and wider industry.
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