More than half of in-house legal teams at FTSE 350 companies plan to expand over the next 12 months, research has revealed.


The finding - contained in a survey by accountancy firm Grant Thornton - has raised fears that they plan to cut back on the amount of work outsourced to their external firms.



The survey found that companies in the construction sector are the most likely to grow their in-house teams in the next year, followed by those in the banking, financial and insurance industries.



Toni Pincott, a partner in Grant Thornton's forensic and investigations unit, said: 'As the reins are tightened on external spend, in-house legal teams are making use of their (newly recruited) specialist practitioners by taking on more work than ever before.'



However, Paul Gilbert, solicitor and chief executive of LB Consultancy, argued that an expanded in-house team might not automatically lead to a reduction in outsourcing.



He said: 'A company might sometimes recruit to meet an economic need. It might want a contract lawyer on board if it's spending hundreds of thousands of pounds a year on external contract lawyers, for example.



'But more often, a company is simply looking to organise its resources more efficiently, handling core activities in-house and outsourcing the rest. There's still lots of work being outsourced, but it's of a different nature.'



Mr Gilbert, whose management consultancy advises in-house legal departments, added that new people on the in-house team can even result in increased spending on external lawyers.



'The new recruit brings a new perspective, and in scratching the surface finds all sorts of unexpected issues lurking beneath,' he said. 'But contrary to what the survey suggests, recruitment isn't easy. There just isn't an overwhelming selection of suitable candidates out there.'



The Grant Thornton survey also found that more than half of in-house legal teams anticipate spending more time on the prevention of disputes.



Ms Pincott said: 'In-house legal teams are sending out a clear message to external law firms that they will now specialise in non-contentious areas of law, focusing resources on strategic issues and risk review, in a bid to anticipate disputes before they happen.'



Jonathan Rayner