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The Consero Group recently released its Winter 2014 General Counsel Data Survey, which is a brief snapshot into the market view from the general counsel perspective.
According to Corporate Counsel, an ALM publication:
The executive consulting firm, partnering with Applied Discovery, asked 10 questions of GCs who attended a December General Counsel Forum. Consero received 52 responses.
While the sample size is small, it “included general counsel from a broad array of industries and different company sizes, ensuring that a wide variety of industry perspectives were represented,” said Paul Mandell, Consero’s founder and chief executive. Mandell told CorpCounsel.com that the companies’ revenues ranged from $500 million to over $50 billion.
Here’s a quick look at five data points as 2014 gets underway:
1. Inside counsel headcounts will remain the same. 67% of GCs answering the survey expect that that their headcount will remain the same in 2014 and 94% said they had no plans to hire new graduates right out of law school. These indications are generally in-line with the 2013 Law Department Metrics Benchmarking survey conducted by ALM which found that most corporate legal departments were not planning additional staff reductions, even as workload increased.
2. Corporate law budgets will remain flat. The results were more evenly split here, but a majority of GCs – 54% – said they do not expect their budgets to rise; 46% do expect budget increases. Here again, the Concero snapshot is in alignment with the ALM benchmarking study, which found that budgets were down in 2013 from the previous year, but did not experience cuts.
3. GCs keeping more work in-house. Most GCs in this survey reported they expect to handle more corporate legal work with internal resources (54%). A majority, with a wide margin at 81%, say that about half of legal work their company has is already has is already handled in-house. Another study by BTI Consulting had similar findings as a result of greater access to talent from partners that have left law firms. BTI said it believed this trend was temporary.
4. Generally happy with outside counsel. An overwhelming majority of GCs – better than 80% – said they are generally satisfied with the work their law firms are performing. Additionally, 76% said it comes at the right price and that “outside counsel provides sufficient value for the cost.” The Enterprise Legal Management Trends report, which was first reported by The Wall Street Journal in October 2013, and analyzed actual invoices (as opposed to survey data), found that corporate legal departments consolidate about 80% of their work with 10 law firms. For law firms, BTI Consulting calls this the “Predator’s Paradise” where law firms are faced with two major growth strategies – to retain existing clients or take market share from a rival.
5. GCs say legal departments are viewed as a business partners. More than 80% of GCs in the Concero survey said their departments are viewed as “both legal counsel and a strategic business partner.” Notably 66% said metrics do not provide a “useful and accurate measure of the legal department’s value to the business.” As our own Kris Satkunas wrote in a post, Proving Value – Looking Beyond the Wallet, early last year, “The default result has all the metrics focused on cost, thus perpetuating the overly-simplified view of the legal department as a cost center, rather than a value-adding business partner.”
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The Concero study concludes:
The general counsel who participated in this survey clearly remain under pressure to operate efficiently and make do with the resources currently available to them. Fortunately, they seem to find value in their relationships with outside counsel, who are providing sufficient value for the money. As 2014 begins, general counsel can be expected to continue searching for new ways to heighten the efficiency of their departments, while working steadily to provide more value to their organizations as strategic partners.
What do you think? Does this snapshot mirror what you see in the market?
Image credit: The Concero Group’s Study
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