Understaffing, Budget Cuts Continue to Roil In-House Legal Teams

In-house legal teams continue to face growing responsibility and declining budgets, according to a report Tuesday from Axiom.

General counsel “overwhelmingly report their teams lack resources across the board—the necessary budget, staffing, technology, expertise, and team structure—to accomplish their required tasks,” according to a report from the legal talent company.

Of the 300 US GCs surveyed by Wakefield Research for Axiom, 96% reported budget cuts, 81% described their departments as critically understaffed, and 80% foresaw a hiring freeze this year. Compounding those issues is that most GCs reported that turnover rose last year.

“There’s also a snowball effect,” the report said. “As more people leave, there’s more work to do, causing more people to leave. It’s a potentially vicious cycle that can, ultimately, spin out of control.”

GCs said they expected the greatest demand for their departments to come in three areas: technology and product development; data privacy and cybersecurity; and artificial intelligence and other emerging areas. Along with mergers and acquisitions, those represent some of the most likely areas in which departments were likely to outsource work to law firms.

And while most corporate legal departments reported that they outsourced work to law firms, all of them said they “experienced challenges that caused them to regret engaging the law firm.”