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Are Cost Control Mandates Putting the Company at Risk? How Australian-Based GCs Can Navigate the “Perfect Storm”

By Tracey Batty-Jones.

More than three-quarters of Australian-based GCs say their team is so under-resourced that it has jeopardized the ability for the legal department to do its job effectively. That statistic can’t just be an alarm bell for legal; it should also serve as a blaring siren to all C-Suite executives concerned about organizational risk, reputation, health, and stability.

Conducted by Wakefield research, Axiom’s newly released survey of over 300 Australian-based GCs across a wide range of industries finds that GCs are facing a perfect storm of imperfect resourcing.

The old news: The GC job is hard, and it’s only getting harder. Like their global peers, Australian-based GCs are facing a parallel crisis of budget cuts and increasingly complex workloads. (More specifically, 70% of respondents say their budget has been cut as a result of economic volatility, yet 61% report an increase in the volume and complexity of legal matters). 


The new news: The job isn’t just hard, many GCs (79%) believe it is fundamentally “unmanageable” as they struggle to walk the very fine line between legal efficiency and legal inadequacy.  

Understanding resourcing challenges:

Where are Australian-based GC’s most acute pain points? GCs cite 3 main issues:

  • They don’t have the proper lawyer bandwidth to support legal work

  • They lack the right expertise to address matters at hand

  • The law firms that are supposed to help alleviate work are instead adding another management/administrative burden

So what’s the answer... more in-house lawyers? Not quite. Findings reveal that GCs can’t just hire their way out of trouble for a couple of reasons. First, for more than 60% of Australian-based GCs, hiring freezes have made the issue moot. But even if such mandates weren’t in place, 92% still say it is almost impossible to find and hire the right lawyers to meet their specific needs. Why? There’s the expense: the cost of a full-time hire is often not justified when so many of the matters for which additional resourcing is needed are either part-time or transitory. Then there’s the nature of the expertise required. Australian-based GCs report that they are routinely faced with matters for which they have a dearth of in-house expertise.

Indeed, even under ideal economic circumstances, legal staffing has always been a difficult puzzle to solve given that legal needs change so unexpectedly. While a GC might need talent with labour and employment (L&E) experience today, their need may evolve to contracting expertise next month.

Survey findings underscore the problem. When asked to identify their current in-house deficits, L&E, regulatory and compliance, and ESG topped Australian-based GCs’ lists. But when asked about future in-house expertise deficits, new or emerging areas, and banking and finance, joined ESG matters to top (and change) the list. These constant changes make adequate hiring problematic.

The problem with law firms:

That is why legal leaders often outsource “overflow” work to a law firm. But 61% of Australian-based GCs are reluctant to send matters to outside counsel because they believe that having institutional knowledge of the company is critical to driving better legal outcomes.


Expertise notwithstanding, the costs of outsourcing overflow work to law firms also make it an unideal solution to address pain points. Half of Australin-based GCs say that law firms have simply become too expensive. (Globally, law firm clients expect rate increases between 5-15% in 2023, with some firms expected to hike rates by 30%+).

The modern resourcing model:

The good news is that many Australian-GCs are ready to embrace a more modern model to solve their resourcing challenges efficiently and effectively.

Rather than confining their thinking to the “either/or” of in-house or law firm, these GCs are leveraging a third layer of flexible talent to build a virtual bench of “always-on” lawyers who combine legal experience with knowledge of in-house issues, yet can be used on a completely ad hoc basis. The flexible layer of the legal function offers a bridge between the in-house team and law firms, providing a support for unexpected matters as well as a level of internal organisational understanding that allows for immediate action. It supports the core internal team with on-demand lawyers whose experience can be drawn on to deal with emerging risks, workload surges, and even law firm management, without incurring the costs of outside counsel or full-time hires.

This modern model isn’t just conceptual. Survey findings indicate that Australian GCs are realising its tangible benefits: 63% say flexible talent providers offer better value for every budgeted dollar. Australian GCs also recognise the many benefits that extend beyond cost. These GCs report feeling burdened by the demands of managing a network of external providers and the more administrative elements of their job.  The time spent on these cumbersome tasks highlights just how appealing elite alternative providers can be. Almost half (44%) recognise that flexible talent providers offer effective administrative management.

But flexible talent providers are more than just a convenience: they are also real providers of the type of legal guidance that many GCs struggle to receive. Whereas GCs have complained about the conceptual advice offered by firms, they praise the practical nature of ALSP guidance.

To Australian GCs: Navigating the perfect storm is possible, if you recognize and address the imperfection of the binary ‘staff up or send out’ model. By leveraging flexible legal talent alongside in-house expertise and law firms you can find ways to solve for efficiency without sacrificing efficacy.


About the Author

Tracey is a market leader in legal resourcing, services and solutions across Australia, Singapore & Hong Kong. Through discovery and discussion, Tracey assists clients in visualising new structures, workflows, and legal resourcing to achieve their business goals. Entrenched in the legal landscape, Tracey also mentors legal professionals to ensure they enhance their careers to aligns with their purpose. #TraceyBattyJones #resourcing #cost #control #GC #outsourcing #Australia #talent #flexible #ALSP


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