Restoring balance for in-house lawyers
This year, we are celebrating 10 years of Vario’s Flexible Services provision. However, over the last decade of business, Vario has grown to become about so much more than simply the freelance legal consultant market. A huge driver for this growth has been our Managed Legal Services offering which has looked primarily towards the goal of making legal teams more efficient. This part of our business has kept Vario firmly in touch with the in-house legal market as well as the freelance one.
In-house lawyering offers a varied career and closeness to the success of a business, but while many feel rewarded by bringing strategic value to business decisions, there are reports of burnout. According to research conducted by Ernst & Young Global (EY), General Counsels (GCs) are working harder than ever and half (53%) of GCs surveyed said that their employee morale has suffered due to increasing volumes of work.
GCs also do not seem confident about the work their teams are able to deliver. A 2021 survey carried out by Deloitte found that just 36% of GCs believe their current resourcing model has the right people doing the right work. Meanwhile, 69% of GCs felt their attorneys were taking on too much low-value work. A separate EY study suggests that just half (52%) of UK law departments are confident that their day-to-day work is aligned with business strategy.
Despite this, businesses are not looking to modernise their legal service delivery models as quickly as we might have thought. Reports show that GCs appear to be persevering with tradition by looking to increase internal lawyer headcount rather than exploring alternative models. The reasons feel understandable at the surface. Leadership like the familiarity of keeping work close; it offers greater control over tasks being done by individuals they can know and trust and the perception of cost savings.
However, while in-house teams hold on to old working practices, they must find new answers to the constant and mounting pressure on legal budgets at the same time as going into battle for talent. Plus, GCs expect their workloads to increase by around 25% over the next three years.
So, eyes may fall first to negotiating better rates with external counsel to create savings. But just 11% of GCs think those savings could be significant, according to EY. A fee squeeze strategy, while not creating the scale of savings needed, also risks jeopardising the quality of work and relationships with external counsel. That doesn’t work either.
As a result, confident businesses have pivoted to new legal service delivery models which deliver quality outcomes, efficiency, process improvement and even cost savings while restoring balance to the life of the in-house lawyer.
Under more successful models, businesses maintain a leaner in-house lawyer team of strategic advisors who are free to maximise the value they add to the business. Lawyers are aligned with strategy, close to issues which matter most and feel valued in their role. Everything else is delivered through blending professionals sitting at scale internally or in ALS businesses while technology enhances speed and scalability. Work is measured on outcomes and data reports on risks and success. Specialist legal advice is accessed when required.
For many, this ideal seems difficult to reach. Benefits are often achieved first, through addressing contracting review, execution, and management processes. We see companies pushing contracting work away from the in-house lawyer team providing the business with benefits through self-serve which rapidly improves speed to contract. Large scale contracting can be outsourced cost-efficiently to external providers like Vario to achieve further benefits.
Ultimately, as pressure mounts on legal teams, GCs will not be able to attract or justify large teams of talented in-house lawyers who are expected to be people managers, fire fighters, churn low complexity work while also being experts in ESG and emerging macroeconomic trends across jurisdictions. The model does not offer the business access to sufficient specialism or flexibility, meaning the task at hand may feel impossible for in-house lawyers.
It feels inevitable that more GCs will embrace a smaller in-house team that is well connected to business strategy and the Board, with an alternative model for low-value work. Data will inform risk strategies and business decisions and the role of the in-house lawyer will be restored to motivating, fulfilling and balanced.
With the first 10 years of Vario now behind us, we look forward to the future. Our Managed Legal Services offering will be a key part of this and if you’re interested in finding out more, we invite you to get in touch.