2018: The voice of in-house counsel
2 September 2013
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Also in: 2018: A window into the future
Prediction: Clients will require law firms to field professional project managers as a service norm.
Costs management, both in litigation and non-contentious work, will rise to the top of the in-house agenda. With multiple methods of charging clients will start to invest in systems that track and manage costs. In turn, law firms will have to hire professional project management teams, who will increasingly take the front seat in terms of managing the client relationship.
Prediction: In-house legal functions will get bigger and more specialist.
More senior lawyers are opting for life in-house, and they will want to retain as much control of the legal function as possible. Increasing regulatory demands will require companies to keep their expertise in-house; the most prominent industry specialists will be in-house rather than private practice lawyers.
Chris Vaughan, GC, Balfour Beatty
More GCs will move into the CEO’s chair, given the increasingly strategic nature of the role. And there will be a more polarised legal market, clearly divided between high-end premium work and commoditised, low-value wor”
Claire Morris, Nationwide’s Deputy Group General Counsel
The key is adaptability. We’ve already seen great changes driven by economic, political and regulatory views and priorities, which will continue to shape what we do and how we do it.
Our traditional sphere of influence is changing with the increased focus on Europe. We can no longer rely on our traditional methods of communication within the UK political and regulatory arena, and will need to build new relationships and understand how we are able to work effectively to ensure that our voice is heard when European law and regulation is formulated.
As our working environment becomes more complex we will see more specialist rather than generalist roles, which will result in the size of legal divisions increasing rather than decreasing.
In-house functions will adapt to changing demographics by embracing a more diverse workforce and taking advantage of technological improvements.
Rose Sinclair, head of legal services, Simply Health
As GC I think our position is stronger than ever. The business is appreciating how much value my team adds because we’re able to demonstrate how much we’re saving in external fees. The economic climate will continue to mean that we’re used much more than external firms. Panel firms will continue to drive down cost at every opportunity. The business is already much more willing to listen to us and, as they keep shedding people, will be more reluctant than ever before to place work outside.
Douglas Denham, legal director, De La Rue
I think we’ll see less, but a more disciplined, use of email and the establishment of more formality in its use between organisations. One US state governor’s team I’m aware of no longer uses email because of the issues with injudicious comments, both personal and professional.
Simon Rose, Head of Corporate Legal Affairs & Group Property, United Biscuits
In-house functions will become more prominent and, in larger organisations, be seen increasingly as full-service providers as the disparity in cost between in-house overheads and legal fees grows, along with the realisation that practical commercial advice is best achieved by a team that lives and breathes the business rather than an external advisor with half an eye on
its indemnity policy.
Robert Marr, head of legal, 1st Credit
As GC the job is going to be a mixture of doing the law, whether that’s checking contracts or doing litigation and keeping an eye on the bigger picture – checking we don’t fall foul of regulators. In the financial services sector regulation is going to be the big change. More regulators getting involved means more pressure.
The days of the GCs saying ‘I’ve got a piece of work on my desk, but I’ve got too much to do’ and then outsourcing it are gone. There will be much more bespoke instruction.
I don’t think the hourly rate will continue. For non-bulk work there will be more direct instruction for a particularly barrister or law firm.
As we move away from the silo mentality everyone needs to be able to think beyond the legal solution. I’m going to want more communication and a working relationship as opposed to ‘we’re a law firm, you’re a client’. I want them to understand our business in more depth. We want a legal solution and to know how it affects us on a commercial level.
Andrew Winterton, general counsel, easyJet
The in-house market will expand due to increased regulation (both UK and especially Europe) and cost-efficiencies (compared to hourly rates for outsourcing). In particular, compliance and governance functions in plcs will grow.
Panels will become the norm, if they are not
Private practice firms will have increased pressure put on them to provide secondees, perhaps leading more firms to have designated departments or pools of secondees. I’d also hope that more flexible/part-time working would become the norm in private practice.
Jeremy Cross, head of legal, Anesco
There will be a head of legal, or someone from the company’s legal function, on the board of every FTSE 100 company. This is a trend that we’re already seeing, there are certainly a lot more in-house lawyers acting as company secretaries at FTSE 100 companies and many companies are also appointing lawyers to positions that give them a greater strategic role. In-housers will be essential to business and the number of lawyers working in-house will as much as double.
In 10 years time there will be just a handful of major global law firms. Competition will increase and bills will be more intensely scrutinised. The number of large law firms will reduce, there will be more global mergers and smaller firms will continue as they are.
There will be a very squeezed middle.
Raymond Marshall, head of legal and business affairs, Guinness World Records
We’ll see a lot of change in fast-moving sectors like media around data protection and privacy. Online distribution is where a lot of issues will be arising and new technologies, the internet and social networks will continue to be a challenge for lawyers working in IP issues, trademark and copyright. Data protection will be also be important for people dealing with data from children.
EU legislation is also pushing the boundaries of what might be legal. It’s difficult to talk only in English law nowadays, so larger firms with offices around the world could benefit, though boutiques that know EU law will do well too.
In terms of career progression I don’t think it will change much. The legal industry is quite set in its ways – it’s not like the sales world where you get incentives for the work you bring in, so I doubt there’ll be a big move towards merit-based pay.
I’m happy to take on trainees without practical experience if they show the right competence, have an inquisitive nature and a willingness to get their hands dirty.
Kiaron Whitehead, general counsel, BPI
Trust, understanding and performance – in a competitive legal world and irrespective of sector, clients will use these three cornerstones to measure externally instructed solicitors and barristers.
Chris Barlow, head of corporate legal, Nomura
Teams will have to deal with more regulatory challenges. Firms that support financial institutions need to bolster their contentious and non-contentious regulatory practices
Tom Cowling, general counsel, Ecotricity
There will be sustained growth of in-house teams at the expense of private practice driven by costs, work/life balance issues and the increasing sophistication of in-house teams and the resources available to them.
The bar will continue to be strong, in-house teams will retain counsel directly (sometimes on annual fixed fee retainers) and will outsource to law firms (or document management consultancies) only especially resource intensive disputes.
We will see the decline of the one- or two-person specialist boutiques. Small will no longer be as beautiful as it was, driven away by client fixation on costs and team depth in expertise. Boutiques will struggle to cope with larger firm undercutting and predatory activity. There will, however, be a rise in consultancies.
Multi-disciplinary practices and alternative business structures will have been shown to work and will start to be commonplace, but we will not see the emergence of a real ‘Tesco Law’ threat to the industry. Margins, regulatory complexity and high street and client antipathy will prevail.
GCs will increasingly be appointed at board level and expected to contribute commercially, strategically and legally to significant business decisions.
Some specialist providers such as IP rights management (especially trade marks) will experience disruption due to the availability of cost-effective software and effective online support. There will be a scramble for client value-added in those sectors.