In-house legal teams face a turbulent year that could see them come under pressure to review fees and do more with less, according to research exploring the impact of the cost-of-living crisis.

A Winmark survey of general counsel conducted for London firm Kingsley Napley suggests in-house legal teams will deal with more disputes/litigation and credit risk/debt recovery work, as well as more day-to-day legal requests from internal departments. However, many respondents expect the crisis to have a high impact on the organisation’s cost base.

A GC working in financial services anticipates increased pressure to execute on matters that will impact on financial results. A senior group counsel in retail predicted sharper focus on fees and rates for services.

A GC in construction said they needed to be prepared for potential headcount and budget freezes.

A GC in transport highlighted the need to identify what work can be done in-house and what needs to be outsourced. However, a GC working in the medical sector, said: 'We work with firms in every geographical region. Everyone has raised their rates. They’re telling us that they’re struggling to retain the best lawyers and, to do that, they need to up their salaries.’

The report suggests a wide range of employee initiatives are being considered to mitigate the impact of the crisis on their departments, such as retraining and upskilling employees.

A GC in financial services said mitigation will include encouraging hybrid staff to work more frequently or longer hours at the office to reduce domestic energy bills.

The majority of respondents felt their department was well prepared to mitigate the impact of the crisis and subsequent economic downturn. However, a third were not prepared or neutral on the issue, ‘suggesting that many legal departments will still require support and development to tackle the challenges ahead’, the report says.

Louise Hodges, head of criminal litigation and investigations at Kingsley Napley, said: ‘Following the cumulative events of the past two years, there is no doubt that general counsel and in-house legal teams must be prepared for a rocky road ahead, regardless of size, sector or previous success.

‘At the very top of many GCs to-do list should be to make sure that you have the right training, processes and resources in place. Among other things, it is worth taking the time to think about how your company currently deals with fraud prevention, manages commercial disputes, maximises debt recovery and effectively implements recruitment and resourcing decisions.

‘We all know how much of an impact the cost of living crisis is having on our personal lives at home. As this report highlights, it will also inevitably create significant pressures at work. We can’t ignore it, and there is much we can do to mitigate the risks.'

 

This article is now closed for comment.