How In-House Legal Teams Benefit From External Counsel Support – Part 1

Part One

 

In a study commissioned by the SRA on the in-house legal community, client-side teams across the private, pubic and third sector revealed their greatest challenges: static or shrinking team sizes, pressure to provide strategic input and the need to meet business expectations.

Of course, it isn’t difficult to understand the root cause of these issues: with increased economic pressure cutting the budgets of businesses across Britain. Lean legal-teams are naturally struggling to meet the unrealistically high standards set out by executives. However, since the study took place in 2014, much has changed. An era characterised by unprecedented events and perpetual uncertainty, the last few years have only helped to heighten the tension for in-house legal counsel as they attempt to juggle responsibilities and navigate new landscapes.

Across functions such as sales, marketing and IT, an increasingly popular and growing response to these persistent problems has been to out-source when appropriate. However, for over a decade, the trend for in-house legal departments has been to decrease their spend with external legal providers, choosing instead to grow their teams and share the workload.

Now, for the first time since 2007, a report has revealed that more in-house legal departments have increased their outside counsel spend than those who have stripped back external support. This year’s Global Trademark Benchmarking Survey signifies a huge change in direction: after years of belt-tightening, financial pressures are beginning to ease and businesses are starting to explore the potential benefits of retaining outside legal counsel. These include:

Enhanced flexibility

When asked about the level of work that they are expected to send to external counsel in the future, 31% of in-house lawyers predicted an increase. This figure stood at just 10.2% in 2017. As well as boosts to their budget, the main reason for this shift can be attributed to the rise in flexible pricing models offered by certain law firms and alternative legal service providers.

 

This is supported by findings from the same survey, where certain respondents claimed to have already moved to providers offering alternatives to hourly fees, further expressing a more positive outlook regarding the quality of work completed by outside practitioners.

As well as costs, in-house departments benefit from the flexibility of external expertise who they can call upon as and when the need arises. Rather than taking time to train a new employee, in-house teams can channel their valuable resources into areas that need it the most and bring in specific counsel for the overflow.

Lower risk of litigation

Commercial disputes are a fact of business life. However, getting served with a court order is the last thing any business owner wants. Unfortunately, legal trouble can brew and bubble over at breakneck speed: before you know it, the business is dealing with a full-blown conflict.

While in-house teams can certainly hold their own, these instances should be few and far between. For a commercially focused law firm, they are the bread and butter of the job. Specialist business lawyers who help a plethora of corporate clients every day know their way around a dispute – but perhaps more importantly, they know how to minimise the risk of them ever occurring.

Focused expertise

Whether it is satisfying all the necessary requirements for regulatory compliance, negotiating fair deals to reduce future risk or dealing with a contractual conflict, outside legal counsel will be able to pinpoint any weaknesses and determine the appropriate action before it’s too late. When it comes to complex cases or time-sensitive matters, choosing the right external legal partner will bring peace of mind that everything is under control.

 

Read part 2