GCs expect more from commercial relationships
New research indicates that, with increasing demands placed upon general counsel to take more strategic and commercial approaches to their work, law firms must understand the challenges facing GCs in order to better collaborate and achieve results.
The State of Australian Corporate Law Departments Report 2019, produced by Thomson Reuters in collaboration with Acritas, explored themes impacting the role of general counsel that are currently emerging in a changing legal marketplace.
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It found that as organisations demanded a more strategic, proactive approach from their legal departments, GCs are expecting more from their firms.
“Commercial and strategic thinking are key drivers of the best performing firms. Understanding the true nature of the client’s business and being able to respond with commercial acumen and strategic thinking is becoming a crucial skill for private practice to master,” the report said.
As those GCs are “increasingly expected to be a more strategic, commercial partner to the business”, the burden is on law firms “to truly understand the challenges” facing GCs and in-house clients and adapt to the way in which they service clients.
“When firms deliver more strategic and commercial legal advice and support – as opposed to taking a black letter law technical approach – it creates true differentiation to their offering,” the report noted.
“General counsel require strategic business advisors and are drawn to firms and partners who truly grasp their needs and Australian general counsel in particular are far more likely to favour firms that demonstrate commercial nous.”
However, though eager to work with commercial advisers, many GCs are of the opinion that they are “not receiving the desired level of commercial acumen or investment from law firms”, the report continued.
“Beyond hourly rate reduction, being more commercial, strategic and solutions-oriented were the key areas highlighted for law firms to improve in order to increase client satisfaction.”
“In addition, demonstrating a commercial understanding of the client’s business, their industry and commercial nous/business pragmatism are areas in which general counsel want law firms to hone and develop their skills,” it said.
The report also found that, in the wake of the banking royal commission, 48 per cent of general counsel are looking to redesign their working practices.