Eight Trends Affecting Staffing in Corporate Legal Departments

Tuesday, February 1, 2005 - 00:00

Max Messmer
Robert Half
Legal

A variety of trends are impacting staffing needs in today's corporate legal
departments. Economic, regulatory, and structural changes are prompting
corporate counsel to re-evaluate their personnel requirements and develop new
approaches to hiring, candidate selection, staff deployment and retention.

Through ongoing research for our annual white paper, the Future Law Office,
as well as other surveys of attorneys in both corporate and law firm settings,
Robert Half Legal has identified eight trends that are likely to affect staffing
in the coming year. The impact of these trends on your department depend on a
variety of factors - your company's size and industry, whether you are part of a
public or private corporation, the composition of your legal staff and your
office's unique workload and budget. Considering each of the trends - and the
questions that follow - can guide you as you make staffing plans, evaluate job
candidates and decide how to most effectively utilize internal talent.

Trend #1: The SOX Factor

The effects of the Sarbanes-Oxley Act of 2002 are still rippling through
public corporations and many privately held companies as well. Corporate counsel
have assumed greater responsibility for organizational governance and, in most
legal departments, work closely with senior executives to ensure the company's
compliance with Sarbanes-Oxley and other regulations. In addition to their other
duties, they are providing proactive guidance on these matters to the chief
executive officer and chief financial officer as well as company boards.

The need to focus on compliance issues has created a new position within some
corporate law offices. Many departments have designated a Chief Legal Officer or
Chief Compliance Officer (often, but not always, the general counsel) to keep up
with new guidelines, monitor internal control of compliance, respond to ongoing
regulatory requirements, provide legal oversight of financial reporting
processes and train staff on risk assessment and management.

Does your department have the necessary internal expertise to deal with
compliance-related issues and concerns? Are you prepared to respond to further
regulatory changes and developments?

Trend #2: Jobs CreatedFor In-Demand Specialties

Law offices are continuing the cautious approach to hiring they adopted
during the recession, but a majority plan to rebuild their teams as economic
conditions further improve. Sixty-two percent of lawyers polled by Robert Half
Legal said they expect the number of attorneys employed with their firm or legal
department to increase in the next 12 months.

The most frequently cited areas of growth were, in order, ethics and
corporate governance, litigation, and intellectual property. These specialties
are generating a significant amount of casework, translating into higher demand
for professionals with relevant expertise.

Are you prepared for a growing caseload in these areas of specialization? Is
outside counsel adequately staffed for project work in these areas?

Trend #3: Shrinking Budgets

Legal departments have been under mounting pressure to cut costs, a trend
that is likely to continue for the foreseeable future. This means they must now
do more with fewer resources - especially human resources. Unfortunately, this
does not mean they can bridge the gap by using outside counsel more often. In
fact, most departments are also reducing spending on outside law firms. As
reported in our Future Law Office white paper, 47 percent of departments
accomplished this by bringing more work in-house.

In reviewing your budget for the coming year, in which areas can you reduce
costs without sacrificing your current level of service and efficiency? Can you
deploy existing staff more effectively?

Trend #4: Exponentially Growing Workloads

At the same time budgets are shrinking, burgeoning workloads are becoming a
fact of life for in-house counsel. In public companies, legal departments are
busier than ever ensuring compliance with Sarbanes-Oxley. In both public and
private firms, caseloads are increasing in areas such as litigation and
employment law.

To help their full-time employees manage growing workloads, many legal
departments are taking alternative approaches to staffing. For example, 69
percent of attorneys we surveyed said they would use project attorneys to work
on large cases or matters that require more resources than they possess
internally.

Have you developed a strategic staffing plan that will enable your staff to
handle major litigation or other significant spikes in activity while still
taking care of ongoing, routine duties?

Trend #5: New Duties For General Counsel

Since the advent of Sarbanes-Oxley, the role of general counsel has become
more complex and demanding as they are required to spend more hours annually on
corporate governance issues. As they assume the role of watchdog and
whistleblower, GCs are becoming more visible within their companies. In order to
perform their new duties related to governance, general counsel are increasingly
becoming involved in matters outside the legal arena, such as providing
strategic business advice and assisting executives with risk management. As a
result, many are more integral members of corporate business teams and have a
greater presence at corporate board of directors meetings. GC's may also be
involved in other aspects of the corporation, working closely with marketing and
communications divisions or on public and community affairs initiatives.

Does your department require restructure or reallocation of duties to enable
general counsel to more easily handle new responsibilities related to governance
and risk management?

Trend #6: Outsourcing Legal Services

Following the lead of companies that have outsourced customer support,
technical support or billing functions to countries with low labor costs, a
growing number of corporate legal departments are experimenting with sending
legal support work to India, the Philippines and other locations. Initially,
companies contracted out administrative tasks, such as document editing,
although there are increased instances of the outsourcing of more
skill-intensive work, such as litigation research.

As this practice becomes more accepted, corporate counsel will need to manage
and address quality control questions, security issues and the considerable
operational challenges this process may present.

Are there legal functions in your department that could be outsourced without
compromising quality or security?

Trend #7: The Changing RoleOf Paralegals

To control costs and realize greater operating efficiencies, many legal
departments are assigning to paralegals tasks traditionally handled by
junior-level associates. Increasingly, paralegals in the corporate setting are
their departments' technology experts and must demonstrate proficiency in
litigation support and case management software. Paralegals also typically
assist with research, document review and trial preparation, and often manage
work teams composed of non-attorney support personnel.

Are your paralegals currently deployed in a way that maximizes their skills
and areas of specialization? Do you offer recognition and advancement
opportunities sufficient to retain your most valuable legal assistants?

Trend #8: Redesigned Legal Departments

In response to the changing needs of their companies, many legal departments
are reviewing their management structures and client service strategies. Many
global corporations, for example, have moved away from the concept of a single,
centralized legal department located at company headquarters. Instead, attorneys
specializing in antitrust, litigation or intellectual property may be dispersed
geographically among the firm's major business locations. These practice groups
provide timely advice and handle legal matters for both individual offices and
the organization overall.

At small and large companies alike, legal department structures are becoming
flatter. Legal departments are encouraging attorneys to move throughout the
company to other business units in order to advance their careers. To boost
retention levels, some departments are offering professional training and
development programs for their attorneys or providing increased opportunities
for associates to build their customer service skills.

Is your legal department structured in a way that encourages the professional
growth of individual staff members while providing efficient service to other
business units in the company?

Taken collectively, the eight trends discussed above will continue to bring
about significant changes and new challenges for corporate counsel. Considering
how they may affect your department can help you prepare for upcoming challenges
and ensure you have the staff in place to handle
them.

Max Messmer is CEO of Robert Half Legal, a leading
staffing service specializing in the placement of legal professionals with law
firms and corporate legal departments. Based in Menlo Park, Calif., Robert Half
Legal has offices in major cities throughout the United States and
Canada.