Canadian Lawyer InHouse

Dec/Jan 2011

Legal news and trends for Canadian in-house counsel and c-suite executives

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CLOSING • A roundup of legal department news and trends Economy continues to affect legal departments Costs remain the top priority of corporate counsel and economic condi- tions continue to affect legal spending, according to the latest annual Canadian Lawyer corporate counsel survey. Most of the surveyed corporate counsel say they want their outside legal service providers to keep costs down, with 62.4 per cent ranking it as the most important element in the relationship between them and their law firms. Nearly 80 per cent of the 165 respondents, who came from leading Canadian corporate and government legal departments, say an improving economic climate had no effect on their legal spending. In addition, nearly 30 per cent have seen their legal budgets cut further last year, while 43 per cent remained at the same level of 2008. Only 28 per cent saw increases in the legal department spending. "There is a real disconnect between the economics being reported by bank and government economists and [what is] being experienced com- mercially by companies — between real today and what is projected to happen on an annualized basis," says Stephen Mabey, managing director of Applied Strategies Inc. The survey's respondents also confirmed the widely held belief that the cost- cutting moves implemented during the recession are here to stay. Only 5.5 per cent say they are likely to roll back the cuts, 63 per cent say they will not, and 31.5 per cent are not sure. While not every respondent answered every question, the trend remains clear that in-house legal departments are still in saving mode, with 58 per cent of the corporate counsel saying they brought more work inside their departments to deal with the changes in the budgets. And in terms of budgets, 36.4 per cent of those polled say they negotiated new agreements with outside counsel over the past year. One of the survey's big findings was that 85.5 per cent of the respondents say they had not been asked by their legal department to complete a satisfaction survey in the past 12 months. Only 8.9 per cent had completed one in person, and 5.6 per cent completed one either over the phone or in writing. Canadians flock to ACC annual meeting The Association of Corporate Counsel's annual meeting held in late October attracted more than 1,600 in-house counsel, including many Canadian lawyers coming from some of the country's largest and smallest legal departments. Billing models related to the ACC's Value Challenge and developing an ongoing dialogue with counsel were key issues at the event, says David Allgood, who as executive vice presi- dent and general counsel for the Royal Bank of Canada leads a team of more than 200 in-house lawyers. "Some of the law firms have almost been indicating that the in-house coun- sel community is more conservative than the law firms would like, which is a lot different from the conversation we were having two years ago," says Allgood. "I think one of the trends is that the in-house bar, we need to take a step out, take some risks, test, and learn around some of these new billing processes, be a little innovative." In an increasingly global world, Canadian in-house counsel from even the smallest legal departments are finding it important to attend inter- national events like the ACC annual meeting, where they can get informa- tion on issues beyond Canadian juris- dictional law. HR survey: Canadian workers becoming more litigious The majority of Canadian HR professionals believe workers have become more litigious in recent years and fear the trend will continue over the next five years, according to a recent survey by the Human Resources Professionals Association and the Canadian HR Reporter. The survey was completed by 535 HR professionals from across Canada and represented a broad cross-section of industries, sectors, and organizations. A majority of survey respondents, 69.5 per cent, believe that employees are more likely to bring legal action against previous employers today than they were five years ago, and almost four-fifths, 79.8 per cent, feel the situation will be worse five years from now. Most, 74.6 per cent, also believe the courts and other adjudicative bodies were tilted in favour of employees, a perception that many respondents say prompts employers to settle with employees regardless of the merits of their case. Interestingly, this perception of bias was strongest among mid-level managers and executives, 82.4 per cent and 80.5 per cent. Respondents also reported paying more in legal fees to defend against claims filed by employees; 67.2 per cent of respon- dents said their employment-related legal costs had gone up five per cent or more in the last year. 38 • DECEMBER 2010/JANUARY 2011 INHOUSE

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