LONDON--(BUSINESS WIRE)--Europe’s General Counsels (GCs) are adapting their roles and becoming more strategic, with the largest organizations leading the way by embracing technological solutions to achieve their business goals. That’s according to the General Counsel Barometer 2017, released to the media today by Wolters Kluwer’s ELM Solutions, the global market leader in transformational, technology-based solutions for legal management.
The General Counsel Barometer 2017, published with Raconteur, is designed to test the hypothesis that the challenges and priorities of European General Counsel are still evolving and to examine to what extent some companies are better equipped than others to adapt to that change. Highlights include the following:
- 38% of respondents stated that their role has become increasingly strategic in the last three years, but differences between a countries’ strategic focus was apparent. 47% of U.K. respondents feel their focus has been increasingly strategic, with this figure falling to 44% among Germany-based organizations and 39% among those headquartered in France.
- Alignment with business strategy will provide a major focus for legal departments. 54% say that in the next three years their role will develop with an ever increasing focus on strategy.
- There is evidence of a gulf between the survey’s largest and smallest companies' adoption of technology to manage contracts, matter management, e-billing and compliance - with the larger organizations using technology as an enabler to manage manual processes so they can concentrate on strategic work.
- 77% of lawyers working in companies with an annual turnover in excess of $25 billion say they used “legal-specific technology capable of addressing multiple areas of legal process and integrating with other technology applications throughout the business.”
- Technology adoption reduces radically as company size decreases (30% among the companies in the $5-$25 billion segment). For the companies in the less than $5 billion bracket, only 4% employ such technology.
- Adoption of technology is most prevalent in the finance and banking sector (68%), arguably due to stringent regulation in the sector.
“This survey supports the notion that legal departments outside those in the largest organizations often find themselves tied into functional roles because they lack the resources to become more strategic,” says Mark Stapleton, EMEA managing director for Wolters Kluwer’s ELM Solutions. “The survey found that the most common reason for outsourcing work, in the $5-$25 billion segment, was ‘too much work.’ If they use technology to automate certain processes, they can free up lawyers to focus on the bigger picture and also reduce outside counsel costs. Unlike at larger companies where GCs are demanded to be strategic, technology can enable forward thinking GCs in smaller companies to be proactive in this area.”
The quest for value also emerges as a key theme. Outside counsel and alternative legal service providers are being utilized in diverse ways and often at considerable cost. The majority of respondents have an annual spend of between $100-$259 million and this is being spent in areas including due diligence (68%),e-discovery (44%) and document review (48%).
Interestingly, respondents are split on how they manage and evaluate their outsourced work. 34% stated they have a panel of legal providers “and use legal spend and matter data to measure their performance against goals and guidelines.” In the finance and banking sector, this figure rose to 50%, and to 42% among those in energy and utilities.
Of the U.K.-based companies, some 37% of companies measure their panel providers in this way – slightly more than those in Germany (36%) and France (35%), and considerably more than Belgium (25%), the Nordics (28%) and Switzerland (28%). However, two thirds of respondants have limited or no data to manage their firms, and therefore cannot measure the value they’re receiving from their large expenditure.
By using data and reports from technology, legal departments can scorecard and benchmark their firms, and have informed conversations that improve collaboration and ensure value for money. The largest companies are already doing this, as Maurus Schreyvogel, head of Operational Excellence and Strategic Assistant to group General Counsel at Swiss-based Novartis International AG says, “We used to adhere to a kind of professional code…if a company told us a task had taken them a certain number of hours we would just accept it…. Now, though, we look from a value perspective and we won’t hesitate to challenge external counsel on fees.”
But there are other considerations at play, as Funke Abimbola, GC and head of Financial Compliance at Roche in the U.K. notes, “Cultural fit is very important to us when we select companies. There are lots of external legal practices that can do the technical side of the work, but we’re a very diverse organization and we like to see that reflected in all our suppliers – including legal partnerships.” In such cases technology can also act as an enabler, recording law firm compliance with diversity criteria, for example.
Notes to Editors:
The survey sought responses from organizations divided into three groups according to annual turnover. These were as follows: less than $5 billion (30%), $5-$25 billion (35%) and in excess of $25 billion (35%). In terms of location, the companies were headquartered in a range of European nations, with the majority in the U.K. and France (30% each), and a sizeable proportion in Switzerland (16%) and Germany (14%). Others included Belgium, the Netherlands and the Nordic countries.
Regarding industry sector, the companies were split equally, with 20% each from finance and banking, pharma and chemicals, telecoms, energy and utilities, and commodities and mining. The organizations tended to have sizeable legal departments, with the majority (36%) featuring a headcount of more than 150 and a further 25% numbering between 100-150 people.
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