General counsel having to do more with less, report finds

General counsel in leading companies are being faced with demands to do more while facing cuts in their legal teams, according to research for international law firm Ashurst.

The report, Riding the winds of change, compiled the views of general counsel and chief officers of companies with a combined turnover of US$1 trillion. It reveals that 83% of general counsel face pressure to improve efficiency of their function and reduce costs, with over half (56%) confirming that overall budgets for their legal team have been cut in the last 24 months.

Increasing regulatory pressure was identified as the greatest challenge general counsel face, especially in financial services institutions – while 88% of general counsel confirmed that they are taking a more strategic role in shaping and implementing business strategy.

The top three strategies in-house teams are adopting to help manage their function more effectively were identified as:

• More innovative use of technology – two thirds (67%) of in-house counsel are focusing on innovative use of technology as the cornerstone of their strategies to support smarter working and greater efficiency, in terms of cost and time efficiency, document management/generation and recording and reporting of key metrics.
• Increasing efficiency of resources, including unbundling of matters – although 63% of in-house teams are currently unbundling, this is often not being done in a sophisticated way. Some still regard unbundling with caution due to having to co-ordinate different providers, and more than two thirds regarding instructing a "one-stop shop" firm as the most effective way to manage complex matters.
• Strengthening the process of managing legal matters – 62% of general counsel are taking steps to improve the project management skills of their teams, to manage complex matters internally and co-ordinate external advisers more effectively.

Mike Polson, who heads the Ashurst Advance support services division of Ashurst, said the ability to balance the two demands of greater workload and squeezed budgets was a key factor in determining the success of general counsel and the legal function.

"We have entered a new era in how the in-house function operates and organises itself, and some teams are finding themselves stuck between a rock and hard place", he commented. "The pressure has been exacerbated by reduction to internal headcount for almost a quarter (24%) of all companies."

Mr Polson said the priorities and role of the in-house legal function had been brought into sharp focus by significant market pressures.

"Innovative approaches to managing the legal function are increasingly promoting the growth and profitability of businesses. We have clearly moved into a phase where specific action is essential to re-balance the cost and resource equation. It's no longer a question of 'do we need to make changes' but 'what changes do we need to make?"