Corporate Lawyers Say They Are Spending More In-House

By ELIZABETH OLSON

Chief legal officers at corporations in 41 countries say they are spending more — and hiring more staff members — in-house, according to a new study by the Association of Corporate Counsel, a legal professionals membership group, that asked 1,300 corporate lawyers and chief legal officers.

The rise is being driven by more government regulatory scrutiny as corporate dealings become increasingly multinational, according to the group’s report. One-third of those responding said their companies had been the target of regulators in the last two years.

One in three corporate lawyers said their companies had been targeted by regulators in the last two years, “reflecting the additional risk companies are exposed to as they increase their cross-border work and face a wider range of government scrutiny,” said Veta T. Richardson, the association’s president and chief executive.

While multinationals are still outsourcing complex litigation, “corporate law departments are spending more on internal budgets than on law firms or other external legal service providers,” the association’s 2016 study found. Currently, 53 percent of the legal budget is being spent internally and 47 percent is being spent on outside legal help, the study found. Corporate legal departments are focusing on ethics and compliance issues along with regulatory concerns and data breaches, which were experienced by some 22 percent of companies in the study.

That means that legal staffing has more than doubled at nearly half of the corporations, said the association, which has more than 40,000 in-house lawyers in 85 countries as members. The association said the explosive rise in its membership reflected the growing number of legal professionals at corporations.

Nonetheless, 61 percent of the chief legal officers predicted that the total amount of work going to outside legal providers would remain the same in the coming year. Corporations are continuing to take a harder look at what they spend for outside law firms, and the respondents who expected to reduce outsourcing said they would increase the number of in-house lawyers in their departments in the coming year.

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