This year we return to the team format of the GC Powerlist, our flagship annual report chronicling the elite of the UK’s buy-side legal community. This team perspective inevitably takes us closer to state-of-the-legal-industry ruminations than the editions focused on individual excellence.
Glancing at this year’s report, the second team-focused edition after the first in 2015, many long-term shifts in the profession have marched on regardless through the era of New Law and tech-fuelled disruption. Teams at leading companies are still accumulating more resources, skills and infrastructure to expand their empires. General counsel (GCs) at leading bluechips operating heavily in the UK are often fielding teams in the hundreds and have expanded substantially over the last three years, despite more pressure for efficiency. ‘More for less’ is a convenient fiction for GCs, but a ‘lot more work for a moderate increase in budget’ has less of a ring.
It is odd that it is often claimed that demand for legal services is flat in Western economies, a conclusion reached by looking at the revenues of large law firms in the US and UK. In a highly-regulated and complex global economy, demand is obviously robust – it is just that it is being increasingly met by providers other than law firms. It is now common for the 50 teams highlighted in our report to spend more than half their very substantial budgets internally, with Shell and Barclays particularly focused on driving efficiency.
In truth, as yet the impact of technology is primarily felt in conference circuit rhetoric rather than changing how teams operate. Nevertheless, the clearest shift since our last team report is a new willingness to bring in a handful of senior operational staff from business services backgrounds in areas like tech or procurement, or at least shift lawyers into senior operational roles.
In-house teams have been far too conservative in investing in business skills. That tendency – though obscured by spurious claims of clients driving change – has materially held back the advancement of the legal industry.
As such, the very recent rise of the legal chief operating officer promises a sea-change in the industry and the prospect of fundamental shifts in buying behaviour of the clients routinely spending £25m-plus annually. Early indications where such professionals have been deployed is that they hunger to shake things up and secure immediate results. Crucially, ushering in such professionals has done much to calm the entrenched turf war in major plcs that pitted procurement and finance against legal, and did much to frustrate constructive change.
But we are not here to nitpick. This report is primarily a celebration of the ascent of in-house counsel. Over the time that I have covered the legal industry, the in-house community has gone through a revolution and is now increasingly seen as a career of choice for many of the UK’s most talented commercial lawyers. There is no hyperbole to say such teams – along with the best US counterparts – lead the industry globally. The 50 teams here – highlighted after weeks of research by my colleagues James Wood, Tom Baker and Hamish McNicol – are exemplary. And the revolution is still in full flow.