In-house trends revealed for first half of 2023
A new report has revealed the top concerns for in-house counsel across the country during the first six months of the year.
Wolters Kluwer Tax & Accounting (TAA) and ACC Australia (Association of Corporate Counsel Australia) have published their annual In-house Counsel Trends Survey Report for 2023, examining key practices, areas of concern, and challenges for in-house legal counsel over the course of the last year that will shape the future of the profession.
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The survey was conducted in March and April this year and includes data from more than 200 respondents across various corporate, government, and not-for-profit organisations. Chief legal officers (CLOs), general counsel, and heads of legal accounted for 43 per cent of respondents, with senior lawyers making up an additional 41 per cent.
Over 50 per cent of respondents report directly to the chief executive, highlighting the continuing importance of in-house counsel. Furthermore, 53 per cent attend all board meetings, and 65 per cent said their opinion on business decisions is sought all or most of the time.
Technology was cited as the top disrupter to the traditional in-house counsel role, followed by the regulatory landscape and data security. Notably, 47 per cent of respondents highlighted implementation of new tools and software solutions to stay competitive and serve their business effectively as a key challenge. However, 68 per cent said that their legal team had not implemented any new technology of legal software so far this year.
“Cost, budget restraints and time were listed by respondents as by far the most significant barriers to implementing new legal technology, followed closely by a lack of knowledge about new products and confusion about the available options,” the report stated.
The considerable value of gaining experience in private practice before pursuing a career as an in-house counsel is a strongly held belief among many survey participants. Nevertheless, there’s an equally clear sentiment that lawyers can excel in in-house roles without prior law firm experience, especially in larger, well-supported legal teams where training and mentorship are prioritised.
“Interestingly, the fact that private and in-house work require distinct and different skill sets was cited as a reason both for and against prior law firm experience,” the report noted.
“On the one hand, having prior law firm experience allows for the development of a diverse range of skills before transitioning to an in-house role. On the other hand, some lawyers may thrive more quickly in their chosen industry by immediately assuming a business-related role after graduating.”
This was demonstrated by a number of respondents, who argued both the positives and negatives of having in-house experience.
“Private practice helps lawyers understand how to draft, review and structure agreements and legal advice. It helps them understand the different requirements for varied areas and when their expertise doesn’t cover a matter. Additionally, it allows them to understand business risk [versus] legal risk and how to finesse their work for different businesses’ risk profiles,” one respondent said.
Another respondent, however, opined that “private practice does not provide the skills required for an in-house role; being embedded in a business as an in-house lawyer requires different skills”.
“One of those is being a generalist rather than a specialist. You also have to get to know the different areas of the business, and what motivates them; they are not all the same. Private practice is generally about making money for the firm, which is not necessarily consistent with managing ongoing relationships and results in inconsistency,” they said.
Protecting organisations from cyber attacks and security breaches was also anticipated to be the top regulatory challenge over the next 12 months, more than doubling to 78 per cent in 2023 from 30 per cent in 2021. Only 25 per cent consider themselves fully prepared for future breaches, but 75 per cent are stepping up efforts to manage risk by improving approaches to collecting, processing, and storing personal data.
Moreover, environmental, social, and governance (ESG) compliance and reporting continue to trend as a growing area of concern for business, with the largest percentage (36 per cent) of respondents falling in the middle of the scale when asked to rate how prepared their organisations were in regard to ESG compliance and reporting. Another 12 per cent considered their organisations very prepared, while only 8 per cent said they were not prepared. In addition to artificial intelligence (AI) technologies, ESG has been revealed to be one of the top key trends for the legal profession in 2023 — with tech and ESG also tipped to drive mergers and acquisitions throughout the year.
Following the COVID-19 pandemic, flexible working has gained broader acceptance in the profession, with 68 per cent of respondents compared to 62 per cent of respondents in 2021 agreeing. Meanwhile, concerns about losing flexible workplace gains remain a key area of concern.
Within the report, one of the respondents commented that “improvements in work/life balance have come out of the pandemic such that working from home one-to-two days per week is now considered the norm for my workplace. I’d like to see an extension of working hours to ensure greater flexibility (before 7am or after 6pm) ...”
Following the release of the report, Wolters Kluwer TAA Asia-Pacific managing director Izzy Silva said that their legal research platform could help in-house lawyers navigate these challenges moving forward.
“As in-house counsel navigate the ever-evolving landscapes facing organisations and industries today, we want to keep providing tools and insights they can trust and rely upon to empower their legal advice to management teams and inform the decision-making process in legal, risk, and compliance matters,” he said.