Five Key Takeaways from the 2024 GC Survey Report for Growth Companies

In today's fast-paced legal landscape, small to mid-size company general counsels (GCs) and legal leaders are facing a myriad of challenges that demand innovative solutions. In this year’s national study of 300 U.S. GCs conducted by Wakefield Research and commissioned by Axiom, the prevalent pain points for these legal leaders include budget cuts that constrain their ability to invest in essential talent and resources, ineffective resourcing strategies that hinder operational efficiency, and the pressing need to find a comprehensive solution that addresses both critical issues.

Cinching in an Already Small Belt

As economic volatility continues to loom in 2024, 63% of SMB GCs and legal leaders are grappling with concerns about their legal departments' capacity to invest in the necessary talent and resources, a challenge exacerbated by an average 10% reduction in legal department budgets due to current and anticipated economic conditions. Small to mid-size businesses in particular are feeling the squeeze of these budget constraints, necessitating a strategic and forward-thinking approach to resource allocation.

Small In-House Teams Stretched to the Limit

The strain on in-house legal teams is palpable, with 82% of legal departments lacking the staffing resources required to effectively discharge their responsibilities, a figure 3% higher than their enterprise counterparts. The ability to hire the right attorneys to address the mounting needs of these departments has become a significant hurdle, as evidenced by 100% of SMB legal leaders highlighting the difficulty in securing suitable legal talent.

SMB GCs’ Loss is Law Firms’ Gain

Traditionally, legal departments have turned to law firms for support, with 95% of SMB legal leaders outsourcing an average of 23% of their work to these external entities. Over half (51%) shared the reason was due to a lack of in-house capacity or specialist expertise. However, the landscape is shifting with law firm rates on the rise and a glaring gap in their ability to offer actionable business advice over conceptual legal insights. A staggering 99% of SMB GCs and legal leaders who engaged law firms last year found themselves facing challenges that led to regrettable outcomes, signaling a need for more effective alternatives.

Budget Savings, Optimization Are in Reach

Amidst these challenges, there is a silver lining in the belief that legal departments could better manage their workloads if equipped with the right resources in-house. An overwhelming 99% of SMB GCs acknowledged that some work outsourced to law firms could have been handled internally given the right time and staffing bandwidth, underscoring the potential for optimization and cost savings.

SMB GCs Want Innovative Options

SMB GCs are clamoring for innovative resourcing solutions that offer a lower-cost alternative to traditional law firms while maintaining a high standard of quality, oversight, and accountability. A resounding 91% of SMB GCs and legal leaders (3% higher than enterprise counterparts) do not view law firms as a complete solution to their resourcing challenges, with 87% (5% higher than enterprise counterparts) expressing a willingness to outsource certain legal matters to flexible legal talent providers if cost-effectiveness and quality assurance can be guaranteed.

The notion of hiring additional full-time lawyers to address resourcing gaps is met with skepticism by 85% of SMB GCs (8% higher than enterprise counterparts) due to the inherent difficulties in recruitment and the potential for turnover or hiring freezes. The call for innovative, adaptive solutions that align with the evolving needs of legal departments has never been clearer.

How to Solve Big Challenges for Small Teams

The evolving landscape of legal resourcing demands a fresh perspective and a proactive approach for any legal leader trying to stay ahead. Small to mid-size company general counsels and legal leaders can navigate these challenges by embracing flexible and effective legal solutions that maximize their budgets and optimize their resources. To delve deeper into these insights and explore transformative strategies for legal resourcing, download our whitepaper and discover how innovative solutions like Axiom can empower your legal department to thrive in an era of change.