More than four out of five companies globally are set to reduce their legal spend in the next two years, a report by Big Four professional services firm EY has found. Titled “Reimagining the Legal Function,” the report also found that 42 percent planned to cut costs by more than 10 percent.
The report did find, however, that in Singapore, a smaller proportion of companies (20 percent to be specific) were planning to cut cost by more than 10 percent. Dmitry Tetiouchev, EY Asia- Pacific Law Leader, tells Asian Legal Business that it is only a matter of time before the city-states sees the cuts. “Singapore is no different from the rest of the advanced world in making sure the legal function is lean and efficient.”
So how should providers of legal services – including law firms – look to respond to this gradual reduction in spending? “We need to work closely to legal counsels to understand their needs and objectives and to offer them various options to improve the performance of the legal department with the right mix of people, providers, place of work and technological enablement,” he notes.
“It’s about improving efficiency to ensure lawyers spend less time on routine compliance and low-value tasks and focus more on strategic matters. For us at EY, it’s good, because we can provide options for clients to re-evaluate their legal function operating model, and work with them on how best to operate in the context of rapid change in the digital era, whether it’s through our solutions, internal business cases or something else,” he adds.
Tetiouchev notes that law firms can learn from accounting firms, which have already gone through a process of slimming down budgets and streamlining processes. “It’s now the legal market’s turn to embark on the ‘the long journey of increasing efficiency,’” he says.
This is also a time of opportunity for in-house counsel. “When you consider how much technology there is, and how many options are available for GCs, now is a great time for general counsel to rethink what they do and to align themselves to the other functions within the organization, ensuring they demonstrate strategic value and innovative thinking,” Tetiouchev says. “Everyone is on the journey, and there are many opportunities that exist in the market.”
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