What law departments can expect to see in 2023
With the new year fast approaching, here are some predictions for what may be coming for in-house legal teams, writes Mark Dodd.
It’s that time of year. Christmas decorations come out of their boxes, and thought leaders dust off their arsenal of platitudes to make another set of predictions for the year ahead. Rather than adding vague (but certainly not wrong) predictions, we’ve made five predictions that are somewhat more precise.
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Tightening junior lawyer supply
Last year we predicted a tight labour supply, a prediction that came true in all major legal markets. In 2023, supply may loosen at the top end, but we expect to see continued and even greater demand for paralegals and junior lawyers. From LOD’s unique vantage point, we’ve seen a new trend of larger corporates rethinking how they resource their teams, and part of that reassessment includes the need to attract junior lawyers.
The spectre of data breaches
The rising threat of corporate data hacking will continue, and legal teams will work more closely with their organisation tech and infosec teams. The stark lessons from Optus and Medibank in Australia will mean that general counsel receive the budget needed to ensure preparedness for data breaches. Cyber incident simulations will grow in popularity as GCs seek to maximise their readiness. Partly in response to this threat and partly good housekeeping, GCs will also be looking to boost their compliance capabilities through hiring and contracting.
Contract management changes priority level
In-house leaders, weary of murky contractual oversight, will prioritise contract lifecycle management (CLM) projects. Organisations will demand easier-to-use contracts, and GCs may run concurrent projects to simplify and harmonise templates, alongside implementing CLM. At-hand contract data will enable GCs to shed light on demand and in real time. The ability of GCs to tell senior leaders to wait for their team to report will diminish — the expectation of instant reporting will grow.
Widening entry broadens the field
New pathways of entry into the legal profession will mature, and direct to in-house legal work will grow in popularity in a few markets, Australia and the UK included. This will be good news for both GCs and aspiring junior lawyers — not such good news for law firms. More expansive entry should lead to greater inclusivity as the skill set mix for corporates differs from law firms. Many GCs will be watching with interest as market leaders look to hire law graduates direct.
The evergreen issue — tighter purse strings
Facing a gloomy global economic outlook, in-house teams across most sectors will have less budget than last year. The need to demonstrate ROI will force GCs to boost their reporting to the board and start tracking key activities that feed directly into data dashboards. Expect to see larger corporate teams bringing in external partners to set up their data intelligence rather than relying on internal DIY project teams.
Legal departments can expect a tight supply of junior lawyers in 2023, with continued demand for paralegals and junior lawyers. A lot of what we’ll see next year was already emerging or maturing in 2022: corporate data hacking, contract management projects, direct entry pathways for law graduates to enter in-house teams and tighter purse strings. One thing we can all wish for this Christmas: no more major macro events causing widespread disruption, like a pandemic or another war.
Mark Dodd is the head of market insights at LOD.