Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50880
CLOSING • A roundup of legal department news and trends Cost control and increased regulations key in 2009: report Cost control and working with increased regulatory burdens are the key issues for in-house counsel in 2009, according to the Association of Corporate Counsel's 9th Annual Chief Legal Officer Survey. The survey found the worldwide eco- nomic downturn has had an effect on legal departments. The areas of cost control through key initiatives, includ- ing working with outside counsel on new rate models, were highlighted in the survey. "The economic landscape has changed the way CLOs must man- age their legal departments in order to respond to increasing demands," says ACC president Fred Krebs. The survey found a key area of increased demand is compliance. Regulatory oversight has been a buzz phrase since September 2008 when the lack of regulations and oversight were blamed for the collapse of banks around the world. Those surveyed said they anticipate a need for more cost-effective ways to respond to government inquiries. Seventy-nine per cent of CLOs respond- ing to the survey said they have imple- mented practices to promote cost and time efficiencies. The most common The most common strategies: 48% 44% 43% 41% Increase in the use of paralegals and support staff Using contract management systems Document management Alternative fee arrangements 0 10 20 30 40 50 strategies were a 48-per-cent increase in the use of paralegals and support staff, 44 per cent are using contract manage- ment systems, and 41 per cent are look- ing to alternative fee arrangements with 46 • JUNE 2009 INHOUSE outside counsel. "Figuring out how to keep doing more with less, or better yet, a little less with less — we have to cut outside coun- sel costs but we can't just move them inside, and we are not adding staff. We have to collaborate with other shared services and our customers to figure out how to get things done efficiently and in some cases, stop doing some things," said one unnamed CLO in the survey. CLOs surveyed seek alternative fee arrangements and believe there is a disconnect between the billable hour fee model of most law firms, and the value focused model favoured by law departments. More than half surveyed put a high value on alternative fee arrangements to improve relationships with outside counsel. "The concerns expressed in the CLO survey are not surprising and corre- spond directly to issues we're address- ing with the ACC Value Challenge," says Susan Hackett, ACC senior vice president and general counsel. "General counsel tell us that value means receiv- ing a solution that addresses the client's problem for an appropriate cost, yet too often there is a disconnect between the costs associated with legal work and the value clients receive. "Law firms must not only recognize the increased economic pressure in- house counsel and their companies are facing, but focus on new efficiencies that will help reconnect their billing practices to client satisfaction with the value of their services." Other survey highlights include 54 per cent of CLOs saying the economy has effected the operations of E-mail ideas and questions to: kharris@clbmedia.ca For weekly INHOUSE news and updates go to: www.canadianlawyermag.com/inhouse their legal departments through more work brought in-house, the employment of cost-efficient strategies, and smaller staffs through layoffs and reduced hir- ing. A quarter of respondents said they expect to hire additional staff in the next 12 months. 88% of CLOs surveyed are satisfied with their role "We had a few hires proposed in our budget; we didn't get them. We're grow- ing, so we need to figure out a way to spread the work around, maximize our current resources and continue to pro- vide excellent work under the current cli- mate," said another CLO in the survey. Despite the challenges, 88 per cent of CLOs surveyed are satisfied with their roles. Increased scrutiny and regula- tory oversight is expected by 48 per cent of those surveyed. Yet, 33 per cent responded that regulatory changes would lead them to seek other roles or retire altogether. There were 619 respondents to the survey with 46 per cent from private companies, 30 per cent from public companies, and the remaining 24 per cent from not-for-profit companies. IH