In-house legal teams embracing the need for outsourcing

The landscape of the legal industry has been going through plenty of changes over the past century as we adapt to cope with new ways of living, the advancements in technology, and the everchanging needs of businesses and law.

HBR Consulting did a poll of 225 in-house legal departments and found that cost control is amongst one of the biggest concerns, which has led to in-house departments reducing their spending and adjusting the amount of money they spend on internal hiring.

Is outsourcing replacing in-house legal departments?

Law departments within businesses are now starting to consider alternative options to the traditional in-house model of legal than ever before.

Alternative legal service providers (ALSPs) are becoming a popular choice, as they can provide companies with legal advice and offer different pricing and payment structures which allows for more flexible legal support than having an in-house counsel. ALSPs offer just as much experience as in-house lawyers, with the added bonus of having expertise in various specialised areas.

It’s possible that we may see a greater shift in how legal departments allocate spending between traditional in-house teams and exterior support as they fight to remain competitive whilst also reducing costs across the board.

For corporations, cutting costs will always be a priority but legal matters will always be part of running a business, and so whilst outsourcing and investing in more technology will help them remain competitive and efficient, and give increase support in specialised matters, it is unlikely that larger businesses will axe in-house teams altogether.

In-house teams are particularly useful for drafting legal documents and helping with day-to-day tasks. However, in a fast-moving and increasingly complex business world, there certainly is place for legal consultancy and outsourcing to really take off.

In-house lawyers are likely to want support on more complex matters, particularly if they have a broader overview of business law or industry specific law, and have not got extensive knowledge on environmental laws, for example.