A recent research report published by Axiom examines the top challenges that General Counsel (GCs) are facing in Australia in 2024. With responses from over 100 Australian-based GCs, the findings highlight two significant areas of concern: budget cuts and managing law firms.
These challenges are not only impacting operations but also their ability to provide effective legal services for their organisations.
Budget Cuts and Resource Constraints
One major challenge is the significant impact of budget cuts, averaging 10%, that GCs are facing. These cuts hinder GCs’ ability to invest in necessary talent and resource, with the report noting that “97% of GCs report that their teams lack the necessary staffing to effectively accomplish their required legal and administrative tasks”.
Budget cuts, and the old adage of ‘doing more with less’, have always been a concern for legal departments, but the current economic climate has exacerbated the situation. Unfortunately, this means fewer resources for talent acquisition, training, and retention, which are crucial for maintaining a competent and efficient legal team.
The impact of these cuts extends beyond the immediate team. Reduced budget means less investment in new technologies and tools that could streamline operations and improve efficiency. Consequently, many GCs are stuck in a cycle of trying to keep up with their growing workload while dealing with the budget constraints.
Challenges with Law Firms
While law firms have traditionally supported in-house legal department, they are now part of the problem. While 97% of GCs surveyed engaged law firms in the last year, a staggering 94% regretted it due to issues such as a lack of practical advice and high costs. Many GCs find that the advice from their firms is not commercial or practical, failing to provide value or solve problems.
Compounding this frustration, the high costs associated with engaging law firms also add to the financial strain on GCs, already burdened by tight budgets.
Navigating the Challenges
Despite these challenges, there are strategies GCs can employ to navigate them. Exploring alternative staffing models, such as flexible legal talent providers, can help to supplement the team and bridge knowledge gaps. GCs could also look at developing in-house capabilities or turn to alternative legal service providers that offer practical advice at a lower cost.
Developing an operational focus could also help by seeking out process improvement opportunities to enhance efficiency and instituting legal project management protocols to manage law firm relationships.
Technology remains an opportunity
Whilst new technology acquisitions may seem unfeasible within current budgets, even small efficiency gains could justify the investment. (Check out this helpful savings calculator resource.)
Further, technology that manages law firm engagements, encourages the use of matter RFPs, and monitors budgets and WIP, can provide time efficiencies and data for informed decision-making.
Conclusion
The road ahead for GCs in Australia is undoubtedly challenging. However, with the right strategies and a willingness to adapt, the modern legal department can navigate these challenges and help their organisations succeed.
