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Forty per cent of legal departments set to expand by 2014

Posted by: Laurence Simons 14/05/13
  • Increase in departments bringing regulatory and financial work in-house
  • 40% expect growth by year end and 24% have already made hires in Q1 2013
  • Average size of EMEA legal department up from 10.5 lawyers in 2012 to 12 in 2013

Legal departments’ desire to bring more work in-house is driving the expansion of internal teams in EMEA countries according to research from international legal recruiter Laurence Simons and global bar association, the Association of Corporate Counsel.

The EMEA Legal Department Benchmarking Survey 2013 reveals 24% of in-house teams have already made hires this year, and a further 40% expect to add to their team over the next year.

A greater emphasis on dealing with finance and regulatory issues in-house rather than using external firms is a key reason. Fifty one per cent of departments said they would be bringing regulatory issues in-house this year compared with 31% in 2012. In terms of finance, departments are increasingly bringing areas such as insurance and reinsurance (30% up from 14% in 2012), banking and finance (24% up from 14%) restructuring and insolvency (17% from 11%) and tax (17% from 8%) in-house.

The report shows almost twice as many lawyers (30%) expect internal budget increases as expect external rises (18%) over the next year. Likewise, 36% predict a decrease in external budgets, compared with 24% who predict a decrease in internal spend.

Naveen Tuli, Global Managing Director of Laurence Simons said:
“Legal departments bringing more work in-house reflect a desire for greater control and certainty as a fixed workforce allows for better forecasting of budgets. Many are making the decision that hiring extra permanent staff is more cost effective in the long run than continuing to outsource the work to law firms. The new regulatory and financial landscape also places these areas at the core of any corporation, where in-house teams can provide extensive internal knowledge which isn’t gained from placing the work externally.”

Greater internal hiring would continue the trend seen over the past year, as the average size of an EMEA legal department grew from 10.5 lawyers in 2012 to 12 lawyers in 2013, and has risen worldwide from 39 lawyers in 2012 to 53 in 2013.

When asked where they would deploy one extra team member, 54% of respondents said they would recruit in Europe, 22% in the UK, 10% in Asia and 8% in America. In terms of business areas, 44% would hire into corporate and commercial, 12% in regulatory and compliance, 10% into a general role and 6% into both contract and finance/insurance.

Currently, corporate and commercial dominates in-house activity with 86% of departments managing this where they can. Bribery/corruption/compliance (64%) and intellectual property (55%) round out the top three.

Veta T. Richardson, president and chief executive officer of ACC said:
"Traditional areas continue to dominate in-house department workloads, and those looking to make hires are recruiting for these specialities. However, reflecting the expanded brief of in-house teams, regulatory and compliance are also coming to the fore globally due to measures such as Basel III and Solvency II and there is also appetite for generalists who can switch between areas with ease."

To request a copy of the full report, please contact Jane Holland, FiveTen Group on 020 7858 2022 and jane.holland@fivetengroup.com.