In-house teams grow by 33 per cent in a year as budgets rise

In-house legal teams expect to be larger and in control of bigger budgets next year according to new research revealing a 60 per cent rise in headcount in EMEA in-house teams since 2010.

According to legal recruitment specialist Laurence Simons, the size of the average legal department in EMEA countries has increased by a third in the past year from an average of 12 lawyers in 2013 to 16 in 2014. That number has risen from 10 in 2012. 

The EMEA Legal Department Benchmarking Survey 2014 found that in-house teams are expecting the growth trend to continue as companies shift resources from external legal spend to bolstering their in-house capacity.

Of all teams surveyed, none anticipated a drop in headcount over the next year. Over a quarter of in-house teams have already made hires and 65 per cent expect to add to their teams over the next two years.

It is a marked shift on the previous two years with nearly half having expected headcount to remain static in 2013 and 45 per cent in 2012.

The predicted expansion is expected to be driven by an increased legal budget. Almost half of departments expected legal spend would grow over the next year compared to just 33 per cent who thought the same about external budgets.

This year just 6 per cent of departments expect internal legal spend to drop compared to last year when nearly a quarter of departments anticipated a drop in internal budget.

As well as boosted headcounts, internal legal teams are handling a larger volume of company and commercial work as well as bribery, corruption and compliance work.

Corporate and commercial work is now practised by 87 per cent of in-house teams compared to 86 per cent the year before. Bribery, corruption and compliance work was up by 5 percentage points to 69 per cent from 64 per cent the year before.

Laurence Simons global managing director Naveen Tulli said: “As the broader economic recovery begins to really take-off confidence is being reinvigorated within companies – but these findings suggest the recession still lies in the back of employers’ minds when it comes to outsourcing legal work, which is reflected in a continued shift towards expanding and investing in in-house legal teams.

“Many firms are choosing to take a long term perspective by hiring more internal staff and increasing legal expenditure, rather than send out work to private practices. From a budgetary standpoint, fixed workforces allow for greater stability when it comes to planning and forecasting compared to the ad-hoc casework often carried out by law firms.”

For more on in-house teams in Europe, see this week’s German special report focusing on the DAX30.