Some 30 lawyers work in the departments participating in the survey. The sectors covered included electricity, high-tech, real estate, telecommunications, securities, government/investment, technology services, and resources.
Duties
The first question was designed to establish how the duties of inside counsel are changing. Over 60 per cent answered that they are called upon more than ever to provide strategic and business unit/program advice. Forty per cent said they were being called upon to develop new specializations. Among the ones listed were competition issues, risk management, IP, privacy and Internet issues, securities, CMBS, REIT, legislative challenges, governance and regulatory affairs.
It appears as if the time of the generalist as inside counsel is passing quickly. At least 40 per cent said that new "non-legal" responsibilities are being added to their portfolios including environmental compliance, risk management, business development, human resources, privacy, and organization/management.
Pressure Points
Counsel were asked to rank the greatest pressures faced at work. In order of priority were the need for speed (throughput), getting and keeping additional legal talent in-house, and managing the costs of legal services. The "other comments" section for this question provides further insight-"too much work," "lack of time," "changing priorities with endless client rush demands." Managing an increasing volume of work with static resources and the resulting "logjams" irritates clients and makes the challenges of demonstrating value and getting additional resources difficult.
A cycle of high work volume, strain on resources, and turnover of legal talent is created-a phenomenon similar to what is found in many law firms, and a real challenge for achieving objectives of smarter, better, and faster.
Outside Counsel
Survey participants were asked whether a change was likely in the working relationship with outside counsel. Some of the observations suggest that there are opportunities on which firms can capitalize. One General Counsel was searching for a way to co-ordinate retention of international counsel to replace the "ad hoc" method now in place. "We ask the lawyers we currently deal with if they know someone in country X. It's difficult because you want quality control-you want some sort of quality assurance of good service."
Others added that law firms are too busy and that service is no longer the same, that more specialization in service is required, and that there is a need to stabilize the teams assigned by law firms and to reduce the overall number of law firms.
The answers suggest an important shift from the practice of business units giving instructions to firms to those instructions coming from the General Counsel's office. This shift is consistent with inside counsel being called upon to offer strategic, business unit and program advice.
Performance Management
Eighty per cent of counsel responded that balanced scorecard methodologies were in use or being planned by the employer and would apply to the law department. Taken a step further, measurable goals and indicators of individual contribution are in place for a third of the lawyers participating in the survey.
Catalyst Consulting's experience in designing or in customizing performance management systems for corporate and government counsel suggests that lawyers struggle with how to select goals that are aligned with the projects and priorities of their internal "clients."
Once that is accomplished, there is a significant challenge to ensure that the objectives are specific, measurable, achievable, results-oriented, and team-focused. General Counsel are then faced with the challenge of balancing achievements and total compensation for counsel that respects market realities.
Counsel were asked whether any significant changes were likely or if there were opportunities for different compensation arrangements for counsel. Two-thirds responded that customized surveys are required to examine actual compensation in their sectors rather than relying on the ranges available from the reference market.
Again, Catalyst Consulting's experience suggests that industry-specific compensation surveys for inside counsel produce ranges for base and variable pay. But with variable pay approaching 25 per cent to 40 per cent of base, depending on individual and corporate performance, it becomes impossible to get an accurate read on take-home pay.
Findings reveal that special arrangements abound, especially for the recruitment of entry-level counsel from law firms. General Counsel are finding it difficult to recruit and to retain junior lawyers, and often resort to hiring more experienced counsel.
The Future
The survey suggests that work as inside counsel is demanding because of time pressures, the need for specialization, "unbearable clients," and shortages of legal talent.
Richard G. Stock, M.A., FCIS, C.ADM., is a partner with Catalyst Consulting, a national consulting firm serving law firms, corporate law departments and users of legal services. Catalyst Consulting has been designated the Preferred Supplier for Legal Services Consulting by both the CBA and the Canadian Corporate Counsel Association. See www.catalystlegal.com.