Firms exploring new working models for their in-house lawyers

According to research conducted by Ernst & Young Global (EY), 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, according to EY. While firms might first try to negotiate better rates with external counsel, just 11% of GCs think those savings could be significant, according to the same survey.

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 improvements 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. Specialist legal advice is accessed when required but scoped narrowly.

Everything else is delivered through more efficient processes, blending dedicated professionals sitting in an internal legal hub or in alternative legal services (ALS) businesses, while technology enhances speed and scalability. Work is measured on outcomes and data reports on risks and success.

For many, this ideal seems difficult to reach. Benefits are often achieved first, through addressing processes for contract review, execution and management. Companies look to move simple contracting work away from the in-house lawyer team to free up their time. The bulk of contracting is then executed through a self-serve model which rapidly improves speed to contract. Large-scale contracting can be outsourced to external providers like Pinsent Masons 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 and experts in environmental, social, governance (ESG) and emerging macroeconomic trends across jurisdictions, while also churning low complexity work. The model does not offer the business access to sufficient specialism or flexibility and competing demands might feel impossible for in-house lawyers to manage and balance.

It seems 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 being motivating, fulfilling and balanced.