GC350 Report: Departmental restructures

GC350Earlier this year, the Law Society launched the inaugural GC350 Report. Sponsored by LexisNexis, the Report surveyed 100 senior decision makers about the legal needs of their businesses. It shows the growing influence of in-house legal teams and also the pressure that they are under.

Restructuring

Departmental restructuring is one of the key areas covered by the Report. 57% of the legal teams taking part in the study have restructured in the last 12 months or are planning to do so in the year ahead. Respondents don’t put this down to the changing role of in-house lawyers. Rather, the high proportion of departments being reorganised is seen as the result of wider business or industry factors.

The pressure to cut costs and work more efficiently that drives restructures will come as no surprise to any lawyer. But what strategies can general counsel use to cope with these pressures? In-house teams have historically been formed of former private practice lawyers. Is it time to grasp the industry change and take on a bigger role in training and recruiting young lawyers directly and utilising paralegals?

Recruitment and retention

The GC350 Report highlights how budget limitations are putting a strain on resources. This creates a recruitment and retention challenge for general counsel that’s not just about creating career paths, but also finding new potential resource pools. The Report shows that 39% of work is ‘day to day’ legal work and 14% is low level legal process, yet most legal teams are staffed by highly qualified lawyers with only a very small proportion of juniors/paralegals.

According to respondents, 84% of both ‘day to day’ and low level work is being managed internally rather than being outsourced. Is there an opportunity being missed to take on junior staff to manage the delivery of that work more efficiently and free up experienced lawyers?

Using NQs, trainees and paralegals

According to the Report, the number of businesses willing to take on very junior staff is quite limited despite there being many advantages to using paralegals or trainee solicitors in an in-house legal team. Aside from costs, the benefits include:

  • Junior staff are easier to support through a growth phase than more experienced staff (who will naturally be looking to be promoted to senior roles that are smaller in number and expensive).
  • Recruiting newly qualified or junior lawyers is appealing to GCs looking to mould their own team.
  • Juniors can help teams to manage in situations where the job market is not offering the right solutions.

Even some kinds of strategic work aren’t so dependent on high qualifications. As one respondent in the Report says:

“… people attend meetings where their role is quite strategic but then they have got to come back and draft agreements. … [A]t some point you need somebody who can do the leg work in the background and that’s where I think you can take a punt on somebody who’s potentially newly qualified actually because as long as the right level of supervision is there they’ve got the right grade. I think if we’ve looked at people with intelligence who are curious, interested in business and with the right level of intelligence, then I don’t think it matters too much whether they are very experienced because the actual law doesn’t come into what we do that often.”

Due to the specific nature of the individual businesses and industries, having private practice experience is not always an advantage. The core skills for working in-house – internal relationship building, commercial awareness and flexibility – are learned whilst working in the business and are bolstered by a familiarity with that particular business.

The answer to GCs’ problems?

The answer to whether bringing in more junior staff can ease departmental pressures partly depends on the size and structure of a team. Teams that are geographically arranged may be more in need of all-rounders than teams that are more centralised and can allocate work according to specialism and expertise. It is not a one-size-fits-all solution by any means. What is clear though is that general counsel need to be more open-minded to the potential benefits of this valuable and underutilised resource pool.

For more detail and insights, the full Report can be downloaded here.

If you are in the early stages of your in-house career, you may be interested in joining the LexisNexis Aspire training and networking group. Aspire provides a free forum to share experiences and ideas and sharpen legal and commercial skills. Find out more here.

Filed Under: Analysis

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