The Association of Corporate Counsel Australia recently launched the 2017 Benchmarks and Leading Practices Report, an in-depth and extensive study of trends in the Australian and New Zealand (ANZ) in-house legal profession. The report also features 13 general counsels as best practice case studies and 4 legal industry disrupters and thought leaders:
- Anthony Wright, Principal | Chief Executive Officer at Lexvoco
- Jamie Prell, Legal Director at LOD – Lawyers on Demand
- Joel Barolsky, Managing Director at Barolsky Advisors
- Richard Tromans, Founder & Consultant at Tromans Consulting | Editor at ArtificialLawyer.com
NewLaw firms slowly growing share of the legal pie
ANZ’s corporate legal departments’ external legal bill has increased from an average of $1.8m in 2015 to $2.6m in 2017. Although majority of the respondents (60%) reported pressure to reduce legal costs. A breakdown of ANZ’s corporate legal departments’ external legal expenditure reveals that while BigLaw still has a lion’s share (88%) of the $2.6m, NewLaw firms are slowly growing their share of the legal spend increasing from 7% in 2012 and 2015 to 9% in 2017.
Breakdown of ANZ corporate legal departments’ external legal expenditure.
Opportunity for BigLaw, NewLaw and LegalTech firms
ANZ in-house legal community have also reported an increased focus on legal project management, workflow improvement and use of technology. The progress however is limited by the financial resources available to corporate legal departments. Majority of internal legal expenditure (88%) are tied to staff related costs with only 4% to technology and 3% to workflow improvement initiatives. To remedy this, corporate legal departments look to their BigLaw, NewLaw and LegalTech providers to help supplement the gap in legal project management, workflow and technology.
Future proofing corporate legal departments
General counsels have inherited a high touch operating and sourcing model with a curative approach to legal issues. We have seen a paradigm shift in recent years from curative and preventative treatment of legal issues. The report also features a self-diagnostic tool developed from the research findings to help corporate legal departments future-proof the legal function. The following framework sets out the characteristics of high performing in-house legal departments.
From a historical perspective, like other functioning markets the legal industry has seen the balance of power swung between buyers (corporate legal departments) and sellers (legal service providers). The legal industry is now a buyer’s market, with a plethora of choices from law firms, Big Four firms, NewLaw firms and LegalTech firms to service organisations’ legal needs as they arise.
You can get your copy of the 2017 Benchmarks and Leading Practices Report here.