NEW YORK--(BUSINESS WIRE)--International law firm Proskauer today announced the release of its inaugural Value Insights: Delivering Value in Labor and Employment Law survey, a resource that includes input from in-house decision makers on labor and employment matters and provides in-house counsel with tools to both more effectively help their business partners achieve their objectives and to work with outside counsel to provide value in managing labor and employment matters.
Survey respondents span numerous industries, include both private and public companies, and range from small (< 100 employees) to very large (more than 10,000 employees) companies. Seventy-one percent hold senior roles within their organizations, and 23% focus exclusively on labor and employment matters.
“Working with in-house counsel every day, we see the increasing challenges they face in managing labor and employment matters. The regulatory environment keeps shifting and becoming more complex, and employment litigation continues to increase,” said Elise Bloom, partner in Proskauer’s Labor & Employment Law Department and co-head of the Firm’s Class & Collective Action practice. “We conducted the survey to better understand how labor and employment matters are managed and to identify trends in this area in order to give in-house counsel on how to increase the value they provide to their business partners and how, correspondingly, they can more effectively partner with outside counsel on labor and employment matters.”
Noteworthy observations from the Value Insights: Delivering Value in Labor and Employment Law survey include:
Companies evaluate in-house counsel by qualities that shape relationships. Three of the four most important criteria used to measure the in-house legal team focus on their relationship with their business partners. In-house counsel need to be available, responsive and proactive and use their judgment and knowledge of the business to provide legal acumen on matters. Many of the least valued qualities focused on cost or spend. The exception was ‘adherence to budget,’ which relates to spend predictability and tied with relationship with other business units as the second most important criterion.
Outside legal spend expected to increase. One of the study’s most surprising findings: 23% percent of respondents said they expected to increase their spending on labor and employment matters. Why? More disputes (including class actions), the changing regulatory environment, more eDiscovery and ambitious company growth strategies.
74% of litigation is handled by outside counsel. Responsiveness is key. 65% of those surveyed indicated that responsiveness is the most important criterion when selecting outside litigation counsel. Availability and having strong relationships with the in-house team are also important. For class actions, specialist expertise and a proven track record must also be demonstrated.
Managing risk demands close coordination between in-house counsel and HR. When asked the top two ways they are advised of labor or employment disputes, 88% of respondents said that hearing directly from their human resources department was a top likelihood, followed by 43% who reported receiving a letter from a claimant’s lawyer.
Assessing risk on the fly? Only 19% of those surveyed said they have a formal process for assessing the risk profile of a dispute. Bigger companies don’t mess around, however – 44% of companies with more than 10,000 employees reported having a formal risk assessment process. Potential economic exposure, workplace disruption, setting bad precedent and public relations/reputational concerns are among the top criteria used to assess risk.
Arbitration isn’t universal – and its impact is hard to gauge. Only 30% of those surveyed have arbitration agreements in place, and only 14% require such agreements for all employees. Half of respondents with arbitration agreements felt they reduced litigation, but a full 37% were not sure if it did. And when it comes to savings, only 35% were confident that arbitration reduced their spend.
82% of day-to-day advice and counseling is handled by in-house counsel. And advice and counseling accounts for nearly half (45%) of the time spent by in-house counsel on labor and employment matters, limiting the time they can spend on more strategic initiatives. Outside counsel’s assistance on advice and counseling is sought for ‘second opinions,’ ‘reality checks’ or specialized areas like employee benefits.
The pressure is on for more predictable spend. 46% percent of those surveyed forecast that they will increase their use of alternative fee arrangements (AFAs) and no respondents felt that the use of AFAs would decrease.
Lean staffing for in-house legal teams. On average, in-house legal teams are comprised of only 19 lawyers – but nearly half (48%) have five or fewer lawyers, and over half (53%) have no dedicated labor and employment lawyers at all.
More work handled in-house…without increasing team size. 41% percent of those surveyed believe more work will be handled by the in-house legal team over the coming year, yet only 7% expect the in-house legal team size to grow (92% believe it will stay the same).
Steady use of outside counsel while number of law firms used will drop. About equal numbers of respondents foresee an increase (18%) or decrease (14%) in the use of outside counsel. Interestingly, 23% of respondents foresee a decrease in the number of outside law firms they will use, compared to only 5% who see the number as likely to increase.
View the inaugural Value Insights: Delivering Value in Labor and Employment Law survey.
Proskauer’s Labor & Employment Department has deep experience in distinct legal disciplines across the spectrum of labor and employment law. The department handles the complete range of sophisticated litigation, along with trial, appellate and counseling work, as well as traditional labor relations and collective bargaining to employee benefits and executive compensation and immigration matters.
Called a “powerhouse” by Chambers USA and having “amazing strategists” with “fantastic technical know-how” by Chambers Europe, ours is one of the strongest practices of its kind globally, with more than 160 lawyers based in the U.S., London, Paris and Beijing.
In addition to receiving the highest rankings in The Legal 500 United States, the practice was honored by Chambers in 2015 with a nationwide and global first-tier ranking, and in 2012 with the prestigious Award for Excellence in Labor & Employment. The American Lawyer ranked Proskauer among the top three firms nationwide for labor and employment litigation, noting that clients retain us when their “company's reputation is on the line” and “managing the public face of litigation” is of utmost importance.