Priorities for the legal department from the TRI yearly report
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Important conclusions and tactics from the 2023 State of the Corporate Legal Department Report by the Thomson Reuters Institute (TRI)
Globally, the priorities of corporate law are changing. In order to get insight into evolving law department goals and outlooks, the Thomson Reuters Institute conducted interviews with more than 1,500 corporate legal professionals from businesses with annual global sales of more than $1 billion.
Top priorities for corporate law in 2023 and beyond are reflected in these conclusions. While navigating through these revolutionary times may be difficult, legal departments can take use of certain tactics to maximise the opportunities that lie ahead.
Principal results
The following are some of the report’s main conclusions:
A primary concern is compliance: According to data from the 2023 State of the Corporate Law Department Report, legal departments’ top concerns worldwide are new regulatory requirements and compliance. It is now the primary strategic emphasis for 22% of legal departments, up from 15% in 2019.
The spending trend is rising: Corporate legal departments anticipate a rise in net spend, driven by firms that specialise in regulatory work. Nonetheless, compliance with international regulatory challenges including data privacy, cryptocurrency, and environmental, social, and governance (ESG) is also a driving force, as is the rise in litigation costs and prevention.
Increased workloads are advantageous for smaller businesses: Some of these increases in spending are directly related to planning for litigation and risk management. As more companies choose to outsourcing as a cost-cutting and value-maximizing strategy, a larger proportion of Fortune 50 litigation work is being seen by smaller firms.
Office/remote balance is what departments are attempting to achieve: Corporate legal departments are attempting to strike the ideal mix between remote and in-office work in order to maximise productivity and flexibility. While hybrid working is the most common option worldwide, there are still issues with establishing policies and optimising face-to-face communication.
What tactics are available for use by corporate legal departments?
Around the world, lawyers are being urged to accomplish more with less. About 60% of corporate legal departments are either cutting or maintaining flat budgets, while 65% of them are dealing with an increase in the number of cases they handle.
Corporate divisions are under increased pressure to maximise value and optimise spending as a result. Here are some methods to tackle these difficulties.
Boost your operational procedures
The State of the Corporate Legal Department Report demonstrates how legal departments are now approaching risk management differently. Most departments now prioritise compliance with shifting worldwide regulatory requirements, and risk management is increasingly important to total cost control.
Because risk mitigation and regulatory changes are more complicated than ever, in-house lawyers are turning more and more to firms with fewer than 250 people for outside assistance.
These businesses are proven to be more affordable and capable of offering greater value than their bigger, priciest competitors. Businesses understand the advantages of specialised knowledge and tailored support when they collaborate with smaller businesses.
This change in strategy is indicative of a broader trend towards more effective and efficient legal help, and it is probably going to continue as businesses come to understand the advantages of partnering with smaller firms from the standpoints of value maximisation and cost reduction.
Become more productive
The workplace has seen multiple changes in the past few years. One thing is for sure, though: remote work is here to stay, at least in some capacity. Although most departments are still struggling with the specifics of hybrid work, they have made a significant transition to a hybrid model; according to 71% of businesses, this is how most employees work most days.
Even while working in a hybrid environment offers greater freedom, some legal departments find it difficult to balance the demands of in-office operations, meetings, and collaboration sessions. Those who have discovered the “best of both worlds” strategy typically rely more on predetermined policies that promote face-to-face interactions and brainstorming sessions than they do on complete employee autonomy when it comes to scheduling.
For many responders, the enhanced productivity, processes, and efficiency of hybrid work stand out. It is imperative for legal practitioners working in corporate departments to implement solutions that automate and expedite procedures, as issue volumes rise and challenges get more complicated. Legal departments may stay on top of high-value, mission-critical work pertaining to regulatory, risk, and compliance concerns with the use of technology.
Enhance the division
In the current legal ecosystem, alternative legal services providers (ALSPs) are becoming more and more important, particularly for corporate law departments that are worried about achieving global compliance standards and evolving regulatory risk.
ALSPs can offer training and reporting, assist with identifying, tracking, and mitigating compliance risk, and implement corrective measures for violations. According to the Alternative Legal Services Providers 2023 Report, about 25% of corporate legal departments intend to raise their expenditures in this area in the future.
Corporate legal departments may still think about rearranging their service providers to maximise value even if they decide not to increase their regulatory services budgets in the next year. This tendency can spread to other practice sectors searching for fresh approaches to enhance workflows and legal procedures.
Accept solutions that will enhance operations
Corporate legal departments are seeking to optimise value in an era of rapidly evolving and complex regulations. To this end, they are taking steps to minimise risk and lower litigation while closely monitoring costs.
Corporate legal departments should search for methods to streamline operations and maximize process and technology advancements for more security and stability.
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