In-house legal departments expect pandemic-induced changes to continue

Chief legal officers across the country say COVID-19 has left their corporate legal departments with less money and more work, according to the results of an Altman Weil survey conducted in September and October.

The legal management consulting company, which has surveyed CLOs for 21 years, found all of the challenges that in-house legal offices typically face were still present but heightened by the coronavirus pandemic.

As a result, 66% of the chief legal officers surveyed reported their organization’s revenue has fallen because of the COVID-19 crisis. Meanwhile 77% said their department’s workload has increased.

The pandemic has forced some downsizing with 11% of law departments laying off employees. Non-lawyers took the brunt of the reductions with 8% of the in-house departments cutting paralegals and 7% reducing their support staff. Yet 4% of the departments laid off staff lawyers and 3% whittled the ranks of managing lawyers.

Even while revenue has dropped, 43% of law departments have increased their total spend in 2020. Of the remaining departments surveyed, 40% decreased spending this year while 17% did not make any changes.

Chief legal officers told Altman Weil they have devoted 15% of their time this year to managing issues related to the coronavirus outbreak. Of the changes made in response to the pandemic, 77% of CLOs believe remote or more flexible working arrangements will become commonplace for their lawyers and staff. Another 17% anticipate their departments will be making greater use of technology tools and 12% expect to reduce travel.

Looking ahead to 2021, CLOs see more changes in employment and budget.

In the next 12 months, 36% of corporate legal offices plan to increase their lawyer staffing. Comparatively, 9% plan to decrease the number of lawyers in their departments and more than half will make no changes.

Also, CLOs are looking to make more adjustments to nonlawyer staffing levels. Just 16% of law departments expect to increase their paralegal workforce, down from 28% that planned to do so this year. As for support staff, 12% of in-house legal offices plan to increase hiring while 12% plan to decrease.

For the coming year, 44% of CLOs anticipate their total budgets will decrease as 39% are expecting increases. Of the offices that are planning to cut their spending, 68% said they would improve in-house process efficiency to cover the workload, 66% said they would negotiate lower costs with outside counsel and 55% expected to bring law firm work in house.