Every month, Lisa Hart Shepherd, CEO of Acritas, will present a new blog for Practical Law Global, sharing her experience and insight into how to deal with the changes and challenges the international legal market presents.
This month, she discusses the impact and challenges of law departments' increased international legal spending, and offers valuable insight into overcoming the difficulties this presents.
The average legal department* spend on legal advice outside the home country has grown from 21% of the overall budget in 2009, to a substantial 31% in 2011, according to Acritas. This comes at a time when overall legal spend is static; indicating that spend on legal advice in the home country is reducing.
The findings are part of Acritas' Sharplegal 2011 survey which incorporates the views of over 2,000 in-house counsel every year. The study also reveals that it is not only the average percentage of budget assigned to overseas advice that is rising, the volume of organisations with international needs is on the increase too.
This is particularly evident in the US and Asia, as they play catch-up with the European markets. Most major European law firms have been active internationally for many years, forced to 'go global' at an early stage to avoid the constraints of smaller markets. The majority of American and Asian firms, on the other hand, have largely based their growth strategies on the massive opportunities presented by their extensive home markets.
Driving this increase in average value of international spend, is the fact that organisations need advice in an increasing number of countries. Markets such as Mexico, Vietnam, Indonesia and South Africa are becoming key focus markets for many multinationals.
This brings with it huge challenges presented by the need to consider the different legislation that applies in each market. Highly regulated industries have an even tougher time as regulations vary around the world in terms of volume, complexity and certainty.
On the whole, when in-house departments need assistance to ensure that their business operations are conducted in 'legally safe' environments, they still turn to law firms as their primary partners.
However, the challenge for in-house legal teams lies in finding the right quality of lawyers, ensuring they get an equivalent level of service to the one they receive in their home market and breaking through language and cultural barriers.
It is not surprising, therefore, that many organisations select an international firm and feel more comfortable in their choice as a result. However, organisations must ensure that the international firm they select has thorough local market knowledge − a regular criticism of some international firms' 'outpost' offices is that they do not. PLC Which Lawyer? can help to identify recommended firms for each market.
A full summary of Acritas' Sharplegal global survey of corporate counsel is available for those willing to take part in a 20 minute telephone interview. Click here to register mnesbitt-burrell@acritas.com.
*(with legal needs in more than one country)
Acritas is the world's leading provider of legal market research. We work closely with the leaders of Global 100 law firms and in-house legal departments to deliver the market intelligence they need on a global level.
Acritas insight provides firms with an unrivalled depth of knowledge about the markets they operate in giving them the edge to develop strategies and make decisions of the highest quality.
Lisa set up Acritas nine years ago to exclusively service the research needs of professional and financial services firms. During this time, Lisa has worked on projects with more than 50 law firms, developing strategies in client service excellence, brand evaluation, employee engagement and to achieve global growth. Through analysing the feedback of thousands of legal buyers, Lisa has generated a deep insight of client and market issues.
Lisa also works with many leading law firms in developing custom research programs to meet strategic goals, including mergers and acquisitions intelligence, client feedback programs and thought leadership studies.
Acritas' flagship product Sharplegal is the world's most comprehensive annual study of the legal market. The study delivers over $5 million of data and covers many aspects of the legal business in great depth, including brand, changing buyer behaviour, client service, pricing and international needs.
Acritas works with 40 of the Global 100 on market intelligence programs.