Is Traditional Law Firm Work the Only Resource for the Modern GC?
Key Points:
- In-house legal teams have never been under more pressure, with budgets being cut to the bone and law firms raising rates astronomically, with a rise of 7.9% over last year.
- The complexity and volume of legal work are higher than ever due to global economic shifts and technological innovations, like artificial intelligence.
- Many in-house legal teams don't realize that there are options beyond secondments or elite law firms that can help them meet their needs and reduce overall legal spend.
- 2024 will be the year in-house legal leaders must shift their traditional resourcing models into a new era of modern legal strategies.
Answer: NO!
We’re three weeks into 2024, and legal departments are already grappling with unparalleled challenges. Budgets are tight, but the demand for high-quality legal services keeps growing. It's a tough balancing act to stay cost-efficient while delivering top-notch work. This is where the optimal resourcing matrix comes in.
Whether you're the GC of a Fortune 100 financial services company or the CLO at a health-tech firm backed by private equity, you're probably asking yourself the same question: When do we really need a law firm? This is especially important in a time of rising workloads, complex legal work, and rapidly evolving technology.
The four questions to ask yourself when considering how to best allocate internal and external resources most cost-effectively are:
- What work stays in-house?
- What goes to a traditional law firm?
- What goes to outside legal services and solutions providers?
- Are there new models outside of the traditional firm that can take on law firm work?
What resourcing trends are impacting the legal department today?
With law firm rates reaching a record-high increase of 7.9%, in-house leaders are wrestling with rising costs for diminished value. GCs are resorting to using these expensive firms for "overflow" work rather than complex tasks. Despite the soaring fees, a mere 7% of in-house lawyers view traditional law firms as a fully effective solution for their resourcing needs.
Risks, fueled by the rapid emergence of new, mostly unregulated technologies, a post-pandemic reality, and volatile global markets, are escalating at an unprecedented rate and significantly impacting marketplaces. With the increase in both volume and complexity of work, most in-house leaders say they lack the right resources.
The aftermath of "the Great Resignation" is far from over, with recent reports indicating that overworked and stressed in-house legal teams are still seeking new positions. With many of these lawyers actively searching for a new role, job dissatisfaction in the legal sector remains alarmingly high.
In the wake of an economic downturn, ballooning work volumes, and emerging legal risks, legal departments are struggling with mounting pressure to cut costs while still delivering high-quality services, amidst hiring freezes and resourcing challenges.
What resourcing model is best in this environment?
The traditional legal resourcing model - split between in-house teams and external law firms - is insufficient during economic turbulence. In-house teams, while essential, face challenges in hiring suitable full-time employees for potentially temporary needs, especially finding the right talent for small-to-medium-sized (SMB) companies, in particular.
External law firms, crucial for large-scale litigation and complex matters, are increasingly expensive, with rising costs and limited understanding of client enterprises. Moreover, their advice often lacks practicality and prioritization for their clients' businesses. Combined, these factors have created a disconnect between the service provided and the evolving needs of legal departments.
In the grip of 2024 pressures, what's a forward-thinking GC to do?
Simply reboot their legal department with the right resourcing DNA. Axiom's expanded suite of in-house solutions and law firm services are a game changer, shifting everyday legal work into a cost-effective, low-risk gear. Through our AI-powered process, we streamline immediate and long-term legal needs for enterprises and SMBs alike. From filling team roles and offering one-on-one counsel to full representation across various practice areas, Axiom rises as a flexible, value-focused ally for today's legal trailblazers.
