79 Percent Of In-House Legal Departments Report Strained Budgets... And All 100 Percent Of Those Report Increased Workloads!

This isn't sustainable.

The struggle of the hustle stress multitasking diverse woman busyDo more, with less, or the whole company crumbles. Sound like a plan?

And while it is a bad plan, it’s nonetheless the plan facing most general counsel out there. Despite glimmers of hope that executive leadership at least acknowledge that legal departments should be treated as partners, the latest insights from The General Counsel Report 2023: Global Legal Departments Alleviate and Respond to Critical Pressure Points produced by FTI Consulting and Relativity confirm that the vast majority of in-house departments are still treated as cost centers to be slashed even as legal risk mounts.

As bad as it is to be overwhelmed or underresourced, the glaring statistic in the headline speaks to the massive overlap: Of the 79 percent of those surveyed that reported strain on capacity and budgets, every one of that group also reported surging workload.

Most general counsel agreed that working over capacity is not uncommon for legal departments, which many respondents attributed to the fact that the legal department is still often treated as a cost center. As one said, “It is more of an issue that there are never going to be enough people to do all the work, so it will be a strategy of triage, which has perpetual time and resource constraints.” Still, the tone and scale of the increasing demand was different in this year’s interviews than in years past.

Part of that change in the “tone and scale of the increasing demand,” might be the uniformity of challenges across industries. Internal investigations were the only task where more departments reported decreased demand than increased, and multiple risk areas saw every single respondent reporting an increase.

When the survey asked counsel to identify the top year-over-year risks, it’s clear just how urgent things have gotten.

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And the pace of new laws and regulations coming at companies from multiple sovereigns may exact the harshest toll:

“You never have enough resources or time; we are all treading water and playing catch-up in regulatory compliance,” advised one participant. “There is uncertainty coming, and there are plenty of companies that are unsure of which regulations apply to them,” added another.

This was somewhat of a resounding sentiment, with additional commentary that, “Many companies take the position that they are not going to track the evolution of every bill before every state legislature. Rather, they will wait and then determine the risks of non-compliance.

When local, patchwork regulation reaches the point where companies prefer paying for non-compliance, you’ve got a failed legal regime on your hands.

In any event, times are tough all around for chief legal officers these days. If there’s one takeaway from this report, it’s that all those executives talking about “partnership” need to listen to what legal officers are really telling them. Because the mood out there suggests they’re well past the occasional pat on the back.

Given the realities of corporate America, I assume that instead CEOs will install a ping-pong table and ask legal to cut two more full-time employees.

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HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.