Deloitte global survey reveals new added value from corporate counsels - confirming Australian trendsDOWNLOAD
Monday, 24 January 2011: Preliminary findings of Deloitte’s inaugural Global Corporate Counsel survey “How the game is changing” show that Australian Corporate Counsel and their global counterparts have significantly improved their value within businesses and the legal profession, as their roles and responsibilities have evolved over the past five years.
“Globally, companies have become more reliant on in-house Corporate Counsel particularly for advice in regulatory compliance, risk management and ethics. The growth of the in-house legal profession has also influenced delivery; how and where law firms are providing services,” said Ms Victoria Sweetman, a lawyer with Deloitte.
“For example Corporate Counsel take active measures to avoid lengthy and expensive litigation, with the survey identifying the trend towards resolving commercial and regulatory disputes by negotiated settlement,” said Ms Sweetman.
“The global survey shows that the majority of legal disputes remain largely resolved outside courtrooms, up from 68% five years ago globally, to 70% today. Judicial determinations continue to serve as the last resort option, down from 19% to 15% today.
“In Australian this trend is even more marked in the legal industry with 82 percent of respondents resolving legal disputes by negotiation today, compared with 74 percent five years ago as per a Deloitte survey of over 200 corporate counsel undertaken in March 2010.
“Freeing up Corporate Counsel to focus on complex legal matters and better managing costs is another example of how the game is changing”, said Ms Sweetman. “As more multinational legal firms arrive in Australia, they, along with Corporate Counsel from large global organisations, are increasingly outsourcing their own less complex legal work to foreign jurisdictions to lower costs. They are demanding that the law firms they use do the same.
“These trends, as with many other industries, mean that the legal industry is increasingly seeing the effects of corporate globalisation changing the way that legal advice from in-house Corporate Counsel is consumed and perceived. Traditional operating models have been challenged both locally and globally,” said Ms Sweetman.
The global survey of 877 legal professional respondents from 10 different countries reveals both a global positive shift in the perception of the role played by Corporate Counsel and that their roles and responsibilities are continuing to evolve.
For example, the survey reveals that most global respondents to the survey believed that Corporate Counsel have greater stature today than five years ago. This is in line with the Australian survey. In fact, roughly two thirds of global respondents (62%) said the Corporate Counsel is now a member of the senior management/executive team, compared to 47% five years ago. The Australian responses to the same question conducted in March 2010 revealed an even greater level of improvement (from 40% to 63% respectively).
Trish Hyde, CEO Australian Corporate Lawyers Association agrees. “We've seen that as in-house counsel take on more integrated and senior business roles, their skill set increases and the return for the business is generally higher. ACLA has also noticed that as the in-house profession has grown in stature, so has the recognition that its unique blend of legal and business experience can add value to local and global business legal affairs discussions," she said.
According to Deloitte Partner, David Lombe, the survey provides insight into the value added by Corporate Counsel legal teams to their organisations. “Approximately three quarters (75%) of respondents said the corporate counsel legal team now demonstrates its value in more varied ways than previously which is consistent with the Australian survey, where seventy percent (70%) took the same view,” he said.
Mr Lombe said that the top three ways to demonstrate the value Corporate Counsel are achieving is through the timely resolution of legal problems (56%), reducing legal risk (54%) and achieving cost effective resolution of legal problems (49%). “This is in contrast to the top three choices five years ago, which were achieving timely resolution of problems (60%), achieving best legal outcome (55%) and reducing legal risk (54%).”
Perhaps as a result, Mr Lombe believes Corporate Counsel now have greater influence on their organisation globally. These figures were also echoed in the Australian survey. Seventy one percent (71%) of Australian respondents held the view that a general counsel carried greater influence in a business environment as compared to a partner of a large law firm, compared to twenty four percent (24%) five years ago.
Eighty two percent (82%) of all global respondents agree that Corporate Counsel is now the first source of advice for senior management when there is a serious legal or regulatory issue, compared to 59% five years ago. These figures appear to be slightly greater in Australia (92% and 64% respectively in the March 2010 survey).
The survey also revealed that globally only more than half (56%) of the respondents felt confident that their company could produce all relevant electronic records in response to a legal or regulatory request.