The Lawyer In-house Attitudes Survey: The bright side of in-house life

GCs are in a more confident mood in our third annual survey, and the urge to shift to private practice is on the wane

In association with

Nadia Banno

For the full survey results, including sector breakdowns, please go here.

The Lawyer’s annual General Counsel Strategy Summit in Portugal saw the third presentation of our In-House Attitudes Survey. Carried out in association with Thomson Reuters, and sponsored by RPC, the survey canvasses in-house lawyers on their thoughts on issues such as regulation, managing and monitoring their relationships with external lawyers, and their own careers.

The rising pressure on costs, increasing regulation and the evolution of the in-house role from legal adviser to driver of business strategy have been perennial topics of discussion – and look set to so for some time yet.

With three years’ data to look at it is clear that while some sectors – notably government – still have doubts about the future, confidence is returning to the business world.

More respondents this year are predicting a rise in legal spend and the size of their departments. In the key sectors analysed the fees charged by private practice firms are becoming slightly less of a problem than before, although they are still an issue.

Indeed, one of the headline statistics from previous surveys, that over half of those survey would consider returning to private practice in the future, did not hold true this year. While the market remains challenging, in-housers appear more content.

The panel

A total of 872 in-house counsel responded to this year’s online survey during March and April. Of those, 30.1 per cent describe themselves as ‘general counsel’ or ‘head of legal’, with ‘in-house lawyer’ or ‘senior counsel’ making up another 38.4 per cent. A handful say they are company secretaries.

The proportion of respondents to have been in their present roles for five years or more rose this year, from 35.2 per cent in 2013 to 38.6 per cent. There is a corresponding drop in the proportion to have only recently joined their present organisations, from 22.4 per cent to 17.3 per cent. However, the proportion to have held their present job for two or three years has remained steady at around 29 per cent across the three years we have carried out the survey.

For the first time we asked respondents to state their gender. Most – 53.2 per cent – are male.

As in the past two years, the largest single sector represented is banking and finance. Almost a fifth, or 18.2 per cent, of respondents work in this sector. Energy, government, technology and the legal sector each represent just over 10 per cent of respondents.

Just under half the respondents are responsible for legal affairs in the UK and Ireland, while a third have global responsibilities.

Team sizes

The relative size of the legal teams represented has changed little since the survey began, with lawyers from teams of 10 people or less representing over half the respondents. In-housers from teams of more than 50 people make up 19.1 per cent of responses.

A total of 28.7 per cent of respondents this year said they thought the size of their teams would grow in the next 12 months. Just over half (52 per cent) expect their teams to stay the same size and 12.6 per cent think they will decrease. The latter figure is a 0.1 percentage point increase on 2013, a negligible change.

At the summit, a lively discussion sprang up over the use of secondments to support staffing levels in-house. Many delegates said it is becoming harder to persuade external advisers to provide secondees as the market environment picks up, and many firms were asking in-house teams to pay for secondees.

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The budget

This year’s survey respondents have more money to play with than last year’s, with 7.2 per cent saying their teams have a legal budget of over £10m. In total, 26.3 per cent of respondents work in teams with legal spend of more than £1m, compared to only 22.5 per cent last year.

In-housers are optimistic their budgets will keep rising. This year’s survey has the highest proportion of respondents expecting their legal budgets to grow, with 20.7 per cent saying budgets should rise this year. That compares with 19.1 per cent in 2013 and just 17.5 per cent in 2012.

The proportion of respondents expecting their budgets to shrink has dropped below 20 per cent for the first time.

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Main challenges

Although ‘increasing regulation’ and ‘changing economic conditions’ have been the two areas in-house counsel have consistently identified as most challenging for their organisations, the priorities have shifted.

In 2012 increasing regulation was a bigger headache for most than the economy, and the same was true this year. In 2013 the economy was of more concern.

Budgetary restrictions remain the other area which many find challenging.

Management support for most legal teams seems good. The proportion giving a score of four or five out of five to the question ‘How well do you feel that the legal function is supported by management within your organisation?’ has held steady over the three years at around 57 per cent.

At the other end of the scale there is a slight rise – from 13.4 per cent to 14.4 per cent – in the proportion of in-housers who give their management only one or two out of five.

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External advice

Practice and industry expertise are, and have been for all three years of the survey, the most important factors in deciding which external advisers to work with. An in-houser’s relationships with individual lawyers at a firm or barristers’ chambers also remains important, according to respondents.

Something else that has not changed in the time we have been carrying out the research is in-house counsels’ frustration with private practice firms. Consistently over the years fees have topped the list of gripes, attracting the votes of 42 per cent of respondents.

Lack of commercial awareness is the other major bugbear, with 30 per cent of respondents naming it their greatest frustration.

Fewer in-housers are going directly to the bar now than in 2012. Then, 51.4 per cent of respondents said they had instructed barristers directly but that figure fell to 50.8 per cent in 2013 and to 48.7 per cent this year.

Performance-related pay

For the first time, this year’s survey asked in-house lawyers for an indication of their salary bands. Over three-quarters of those answering the questionnaire were happy to give an idea of their pay.

Almost half the respondents say they are paid less than £100,000. More than half have a performance-related element to their pay, with 11.9 per cent saying more than 30 per cent of their remuneration package is performance-related.

The survey concludes, as for the past two years, by asking in-house lawyers if they would consider taking a private practice role in future. In 2012 and 2013 the proportion of respondents saying they would was over 50 per cent, but this year more people envisage their future to be in-house. 

A total of 50.8 per cent of respondents say they would not consider a private practice role against 49.2 per cent who say they would.

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Clearly, the pendulum is swinging back towards in-house as a career choice and job satisfaction is picking up again, despite the frustrations many survey respondents and summit delegates continue to express.

For the full survey results, including sector breakdowns, please go here. Lawyers working in an in-house function can receive a complimentary report courtesy of sponsors Thomson Reuters and RPC

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