Canadian Lawyer InHouse

25 CANADIANLAWYERMAG.COM/INHOUSE JANUARY/FEBRUARY 2019 online and more visibility in the legal com- munity," she says. "And I think that would trigger going to those people as well and trigger some more diversifi cation. But I think there is a lack of that right now." In line with most respondents, Sidhu choos- es the external fi rms she works with based on industry expertise. According to the survey, it is individual lawyers and not their fi rms that attract business from legal departments. While 66 per cent said they choose based on industry expertise and 62 per cent base their choice on specifi c lawyers, only 33 per cent said law fi rm reputation would seal the deal, second to last in front of the four per cent that rely on third-party legal rankings/ recognition for a reference. "My practice is usually 'follow your ex- pert,'" Sidhu says. The reason is twofold: They have a relationship and those lawyers know her industry. "I've had lawyers that have now changed fi rms and, honestly, because they know our WHAT ARE THE KEY ISSUES IN YOUR LEGAL DEPARTMENT? LISTED IN ORDER OF IMPORTANCE 1. Risk management 2. Compliance/ regulatory matters 3. Cost containment 4. Managing growth of company/ organization 5. Reputational management 6. Scope creep (clients offl oading non-legal work to legal) 7. Cybersecurity 8. Legal department management and structure/ moving to legal operations IN WHAT SECTOR IS YOUR COMPANY/ORGANIZATION? Government (municipal, regional, provincial, federal and First Nations – including boards and tribunals) 17.92% Financial 15.57 % Other 13.68% Technology 11.32% Professional services 9.43% Natural resources based (including energy) 8.96% Non-profi t or academic institution 8.49% Industry/manufacturing (including life sciences, food production and automotive) 8.02% Service and/or retail 6.60% HOW MANY LAWYERS ARE THERE IN YOUR LEGAL DEPARTMENT? 2 to 5 1 6 to 15 51 to 100 16 to 30 More than 100 31 to 50 33.02 % 21.23 % 18.87 % 8.96 % 6.60 % 6.13 % 5.19 % WHAT WAS THE EXTERNAL LEGAL SPEND FOR THE CANADIAN LEGAL DEPARTMENT IN YOUR LAST FISCAL YEAR? $101,000 to $500,000 25.47 % Prefer not to answer/ don't know 25.00 % $100,000 or less 13.21 % $1 million to $3 million 13.21 % $501,000 to $1 million 10.38 % $3.1 million to $5 million 6.60 % More than $10 million 4.72 % $5.1 million to $10 million 1.42 % WHAT ARE THE LEGAL AREAS YOU SEND TO OUTSIDE FIRMS THE MOST? Litigation 75.15 % Employment/labour 55.03 % Mergers & acquisitions 34.91 % Tax 30.18 % Intellectual property 27.22 % Real estate 23.08 % General corporate work (contracts, etc.) 21.89 % Securities/corporate fi nance 20.12 % Regulatory matters 19.53 % Immigration 15.98 % Privacy legislation and data protection 13.61 % Environmental 10.65 % U.S./cross-border 10.06 % Information technology (contracts, licensing, etc.) 9.47 % Class action 7.10 % Advertising/marketing 5.92 % Other 4.73 % Risk mitigation 3.55 % WITH YOUR PRIMARY LAW FIRM/ EXTERNAL SERVICE PROVIDER, WHAT TYPE OF BILLING ARRANGEMENT DO YOU USE MOST OFTEN? 65.56 % 28.48% 1. 2. 3. 4. 3.31 % 2.65 % 1. Billable hours 65.56 % 2. Combination of billable hours and alternative fee arrangements (AFAs) 28.48 % 3. AFAs 3.31 % 4. Flat fees 2.65 % industry, and we're a unique industry . . . we usually follow the lawyer wherever they go," she says. "It's all about relationship building nowa- days," Sidhu says. "That's why a lot of law- yers who are leaving big fi rms and opening up their own practices have clients because their clients are following them into their practice as well." For Ducks Unlimited, which operates mostly in rural areas, Goodwin seeks out the help of local, small-town fi rms. He says diversity is relevant, but it is not a buyer's market when seeking close-proximity legal advice in, for example, northern Manitoba. "They only have so many options." For the fourth year in a row, litigation is the most commonly outsourced work among legal departments, with 75 per cent saying it was the practice area they sent to outside fi rms the most. Employment and la- bour came in second at 55 per cent. Cost and transparency are key to build- ing legal-department-to-outside-fi rm rela- tionships. For four straight years, the most important thing fi rms can do to improve the working relationship with the company was being more concerned about costs. For Sidhu, the legal department and out- side fi rm need to be on the same page about requirements, priorities and expectations for the fi le to keep costs in line. Without that communication, a legal department budget can be drained of hundreds of thou- sands in unanticipated costs, something

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