LEGAL
A mere decade ago, the word "cybersecurity" was left to the world of science fiction, and the economic downturn was as of yet unseen. How these times have changed – as is well illustrated by the Association of Corporate Counsel's recent Global Census, an international view of in-house counsel. This survey has been performed earlier in 2006 and 2011, providing a decade-long view of the industry and the issues facing in-house counsel from around the world.
The timespan of this survey is remarkable – while the 2006 provided the baseline, the 2011 Census shows the industry as it was digging out of the economic meltdown; this year's census provides a true picture of what the "new normal" looks like. A few trends consistently emerged, including the increasing amount of work that remained in-house, and attitudes regarding professional development. Corporate Counsel Connect had the opportunity to speak with the ACC's own Vice President and Chief Legal Officer, James (Jim) Merklinger, regarding these results. This issue will cover some general trends along with taking a look at some of the changes in workload; the February issue will specifically focus on professional development advancements.
Women in-house. While some things change, it appears some things remain the same, regardless of countries or decade. Jim commented on a particularly striking finding-- the continuing disparity in salary between males and females in the in-house practice. "Female in-house counsel reported having significantly lower base salaries and lower total compensation than male in-house counsel. The survey found that 69 percent of women earn less than Purchasing Power Parity (PPP) $200,000, compared to 56 percent of men," Jim shared. However, it would appear the number of women practicing in-house increased, as seen by an increased level of participation in the survey itself. Women comprised nearly half of the Census respondents, up 8.5 percentage points from 2011.
Global issues and challenges. The survey points unequivocally to a much more global industry than what was first surveyed in 2006. "Sixty-two percent of respondents to the Census noted that they have cross-border responsibilities," shared Jim, noting that those in United States (58 percent of respondents), Canada (59 percent), Australia (59 percent) and Brazil (59 percent) had relatively less international work. "Those in Belgium (100 percent of respondents), Hong Kong (100 percent), Germany (95 percent) and Switzerland (96 percent) reported high levels of multinational work," added Jim.
A few other interesting regional trends involved corruption and competition. "When looking at issues keeping chief legal officers and general counsel up at night, corruption posed greater challenges for those in Latin America and Asia Pacific, while competition was more challenging in the Middle East and North Africa," Jim shared.
"With ever-growing in-house responsibilities, understanding regional differences is a huge component of understanding complicated multinational issues. It will soon be necessary to have a very nuanced understanding of these topics – if it is not already expected," explained Jim. Managing a multinational team and/or business will require in-house lawyers to be vigilant of the challenges and opportunities posed by working in these other jurisdictions.
In-sourcing. This year's ACC survey shows the continuing trend of decreased use of outside counsel, resulting in work being retained and conducted by in-house attorneys. For example, a few practice areas experienced a decrease in outside counsel reliance — bankruptcy, government and regulatory issues and pensions; possibly signaling that this specialized knowledge may be being brought to the internal legal department. This supports the results of the recent Thomson Reuters Legal Department In-Sourcing and Efficiency Report, which demonstrated that legal departments are indeed increasing internal staff and hiring more corporate counsel to handle the greater amount of work.
These changes require new solutions in-house. According to Jim, "Law departments are increasingly employing innovative value practices to streamline work processes, paying for results rather than efforts, and taking control of operational decisions that can affect legal outcomes...The daily legal work is most ably handled by in-house lawyers who grasp the details of business operations and strategies."
Strategic use of outside counsel. While more work continues to stay in-house, there are a few key areas where in-house counsel are willing to engage law firms. Litigation remains key (although still 6 percent less than it was in 2004), but the two areas experiencing growth over the past four years has been employment and labor, and mergers and acquisitions. Explains Jim, "This may be linked to the fact that in-house counsel experienced so much activity in the area of mergers and acquisitions over the past year." According to the survey, the top three areas that outside counsel are called on for are litigation, the growing area of employment and labor and IP. Not surprisingly, lawyers in organizations with higher revenue use outside counsel more often than those in smaller organizations.
Workload. Becoming more efficient comes at a cost, of course. Nearly half of all lawyers reported an increase in their workload over the last 12 months, and for 42 percent it stayed the same. The average workweek is approximately 49 hours per week, with 43 percent working between 50 and 59 hours in an average week. Still, the payoff for going in-house and reducing hours remains valid, as anecdotal responses mentioned reducing hours from 60+ a week at law firms to 45 in-house.
Value of in-house counsel. A constant discussion with the in-house profession is increasing the value of in-house counsel to the business, with the requirement to take on more work efficiently and become strategically involved. Corporate counsel are now expected, according to Jim, to wear three important hats for their organization: leader of the legal department, counselor in chief and business strategist.
This is the first year the survey asked about the perceived value of corporate counsel in the business, with nearly all corporate counsel responding as being seen as a trusted advisor by most of their colleagues, but fewer in-house counsel being asked to help solve business problems, and even fewer still being asked to participate in business strategy discussions. Consistently throughout the globe, more than half of all corporate counsel are working to change this perception and elevate to the role of a strategic business partner: 63 percent of chief legal officers in Canada and 67 percent of chief legal officers in Latin America would prefer to spend significant amounts of time on strategy development and execution, compared with 54 percent in Europe, the Middle East and Africa region and 52 percent in Asia Pacific.
Jim feels that the next issuance of this survey, to take place around 2020, will show an increasing emphasis on globalization and information security, continuing the trends we see now. The other continuing story will be integrating further into the organization. Jim predicts that "(as) today's business environment becomes more complex and as global demands grow, in-house counsel will continue to play increasingly important roles in high-stakes executive and boardroom conversations that shape a company's future."
Watch for more findings from the 2015 ACC Global Census in the February Issue of Corporate Counsel Connect, focusing on professional development and job satisfaction.
Download the executive summary of the 2015 ACC Global Census now.
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