Learn the benefits of outsourcing in difficult economic times. Today's legal industry is challenged by an environment of volatility, uncertainty and complexity. In the face of pervasive ongoing change, legal professionals are under more pressure than ever before. Compliance regulations have become increasingly complex, performance expectations have increased, talent tensions have grown, tech-enabled efficiency is imperative, and new competitors have emerged.
Outsourcing can help your business deal with the economy by reducing costs, increasing flexibility, and improving efficiency.
More work with fewer resources
Legal teams are familiar with the adage: “doing more with less.” And while a recession remains uncertain, 2023 will likely present continued economic challenges to legal departments.
According to a survey from the legal-talent provider Axiom, deputy general counsels are wrestling with the inherent tension between being good guardians of corporate values while being effective stewards of legal budgets during a downturn.
Findings show that 98% of deputy general counsels say their legal department budget has been cut as a result of economic conditions and ongoing volatility, including more than half (56%) who say budgets have been cut substantially.
Despite this, nearly all deputy general counsels (99%) report their departments are seeing a rise in both the volume and complexity of legal and regulatory matters even as budgets shrink. New laws and regulations are constantly being introduced, so a deputy general counsel must stay on top of changes that could impact their organization while maintaining compliance with existing laws and regulations. Furthermore, legal professionals are challenged by the growth of other areas of focus, such as Environmental, Social, and Governance (ESG) law.
The in-house talent challenge
The "great resignation" has impacted the legal profession worldwide and it has faced unprecedented challenges in recruiting and retaining talent. While some argue that the great resignation may be better described as the "great reshuffling" since legal professionals stay in the profession but change employers, the disruption and cost to organizations remain high.
Worryingly, legal departments do not appear well-prepared to deal with these developments. According to the Axiom survey, 92% of respondents believe their department lacks sufficient staffing and bandwidth to do its job effectively.
Who does the work is changing for legal departments
Corporate lawyers are seeking new ways to manage their increasing workload, so there has been a growing trend in reevaluating "who" does what and how.
While some legal departments are outsourcing more work, they are also increasingly utilizing alternative legal service providers (ALSPs) and corporate service providers as well as non-legal staff.
Axiom survey results show that 80% of deputy general counsels are interested in maintaining or increasing the involvement of external support, including 49% who would ideally work with more external resources to address their workload. Additionally, nearly two-thirds of deputy general counsel (65%) see flexible talent providers as an effective solution to their department's resourcing issues. Agile legal talent can be particularly useful in under-resourced departments as deputy general counsels look to cut back on administration and focus on managing their legal cases.