Having to ‘do more with less’ and ‘people challenges’ are dominant concerns for GCs amidst the cost-of-living crisis, according to Winmark study sponsored by Kingsley Napley LLP
A recent Winmark survey of General Counsel and In-House Legal teams conducted for law firm Kingsley Napley shows that the majority predict their workload will feature more Litigation, Debt Recovery and Fraud issues in the year ahead as a result of the economic downtown.
The study also finds that Legal departments anticipate increasing internal requests for support and that Employment disputes and HR compliance matters will take up more of their time in 2023.
C-Suite executive network Winmark* surveyed 50 General Counsel, Chief Legal Officers and Senior In-House Lawyers in November 2022 to gauge the type of work they expect to increase as a result of the cost-of-living crisis (i.e. the cocktail of rising prices, inflation and interest rates, coupled with falling household and business incomes). Participants work for companies across a range of sectors and with substantial UK operations.
The survey found:
- 75% of respondents said an increase in Disputes / Litigation work is likely in the next one to two years; 68% said an increase in Credit Risk / Debt recovery related work is likely; and 49% predicted a likely increase in Fraud related workload in the next 12-24 months.
- More than half (53%) of respondents said they expect an increase in day-to-day legal requests from other internal departments; 46% predict an increase in employment disputes that will cross their desk; and 39% said more HR compliance matters are likely to feature in their workload in the next one to two years.
- Whilst the majority of respondents felt their departments are well prepared for the challenges ahead, a worrying 39% do not feel adequately prepared or are unsure if they are ready to deal with the issues likely to be coming their way.
In response to the survey findings, Louise Hodges, Head of Criminal Litigation & Investigations at Kingsley Napley LLP, comments:
“As if getting through the pandemic wasn’t hard enough, in-house legal departments now face a series of new challenges due to the cost-of-living crisis and economic downturn.
The consensus amongst in-house lawyers is that this will lead to an increase in levels of fraud, legal disputes and battles to recover debts, regardless of the sector in which a company operates. Yet it is clear many legal teams feel underprepared for the road ahead.
General Counsel should urgently conduct a ‘Downturn Health Check’ to assess whether their functions have the right processes and resources in place to cope with the new landscape we find ourselves in. Training, technology and external support should all be part of this risk review.”
“This study should be a wake-up call for in-house legal teams so that they can get prepared for the workload to come.
Although litigation is largely reactive, there are steps that can be taken to minimise risks and ensure the right processes are in place to deal with disputes that arise. For example, companies should review their approach to fraud prevention and check sensible measures and policies exist to help minimise the risk of fraud. When it comes to debt collection, there should be a clear procedure in place with enough flexibility to ensure the steps taken are proportionate and commercial. There should also be clear policies regarding the collection and preservation of evidence.
There is actually quite a lot companies can do to get ready for the business environment ahead.”
“A notable finding of our study was the extent to which employment issues will consume the time of companies’ legal teams in year ahead. The 3Rs which many businesses are grappling with right now – recruitment, retention and remuneration – are not only the concern of HR but spill over to legal functions too who are called upon to advise and assist with policies and disputes for their organisations.
Again, it will be incumbent on GCs to ensure employment capabilities are adequately considered in the resourcing of their teams for 2023.
Furthermore pay, flexible working, staff wellbeing, conduct in the workplace and workload will be factors that need to be addressed in team planning to ensure In-House legal functions are able to work optimally to support their employers in the challenging times ahead.”