½Û×ÓÊÓƵ recently spoke to UK-based leaders of global law firms about client demands and delivering global legal services. We came to some interesting conclusions about increased client demand for specialist knowledge, and more flexibility from law firms around resourcing for specialist expertise.
When we asked in-house lawyers specifically how their teams will grow, just under half (46%) of respondents said they believe in-house roles will become more specialised. A third (33%) said they think in-house teams will rely more on flexible resourcing for specialist expertise.
Andrew Levander, chair of international firm Dechert, says, "As markets become increasingly complex and inter-connected, clients require the integrated capabilities of highly specialised practices and industry sector expertise."
Robert Shooter, managing partner of European law firm, Fieldfisher, has noticed a similar trend. "In-house counsel have become even more sophisticated and want more specialist, sector-specific advice," he says.
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In a new ½Û×ÓÊÓƵ investigative report into global law firms, we found that there are specific sectors where specialisation is becoming more and more in demand.
One example of an area of specialist knowledge that's taken the in-house legal world by storm is the corporate world's increased interest in Environmental, Social and Governance (ESG) initiatives.
Clients now expect their outside counsel to be well-versed in this relatively niche area of the law, says Mike Francies, managing partner of Weil, Gotshal & Manges' London office.
The firm, which has a global 1,100+ strong team of lawyers, is working with the University of Oxford's Saïd Business School to create a specialist ESG-focused training programme for its London-based lawyers to help guide clients through ESG-related challenges.
"The purpose-built programme will cover the role of ESG in investing, reporting and metrics, ESG-linked financing, sustainable finance, and future trends affecting all areas of our clients' businesses," says Francies.
See ½Û×ÓÊÓƵ practice notes on ESG and sustainability here.
Risk and compliance law is another practice area where the demand for specialised knowledge has skyrocketed over the last decade.
In 2017, the demand for risk and compliance expertise grew by a massive 50% compared to the previous year. No doubt, this was due to the new General Data Protection Regulation (GDPR), which came into effect in the UK in May 2018. A similar surge in demand could be seen in 2020, with the COVID-19 pandemic causing a 37% spike compared to the previous year.
In 2022, we saw a 6% increase in demand for risk and compliance law, which could partly be due to the war in Ukraine and financial sanctions placed on 1,300 Russian individuals and organisations.
According to a ½Û×ÓÊÓƵ study, the demand for specialist knowledge in risk and compliance will generate 7% more work in 2023 than in 2022. Cybersecurity, data protection, and financial sanctions are the main risks and trends impacting this increase in demand for risk and compliance law.
Russia's invasion of Ukraine and the resulting sanctions, ongoing cyber-attacks, the risks of working from home, and severe data protection regulations all require experts to navigate these changes.
Laura Spooner, In-house Risk & Compliance Specialist at ½Û×ÓÊÓƵ, says all businesses in all sectors must comply with financial sanctions measures.
"This isn't a new 'thing', but the Ukraine conflict has sharpened the focus for businesses. In 2022 we saw 17 sets of amending regulations relating to Russia sanctions alone, and almost 50 general licences were issued by HM Treasury, compared to just a handful issued before the Ukraine conflict."
According to Spooner, financial sanctions compliance is hard, as international regimes are broad, complex, overlapping and rapidly evolving, and there are severe penalties for non-compliance.
The trickiest bit, particularly in a fast-paced situation such as the Ukraine conflict, is keeping up to date, says Spooner, and it's imperative that businesses do.
As clients want more specialist sector-specific advice as the world and markets become more complex, firms must up their game.
Many firms have changed how they approach projects. For example, Morgan Lewis, which has over 2,200 lawyers and legal professionals across more than 30 offices and ten countries, has reimagined how its lawyers collaborate by implementing a "SWAT Team" style task force to tackle workloads.
"We form around a single issue to create swiftness and dexterity while bringing to bear the resources and proficiency of a global law firm to deliver an innovative client service," says Frances Murphy, partner and managing partner of Morgan Lewis's London office.
Outsourcing and flexible resourcing are increasingly popular options to meet increased client demands for specialist knowledge.
Some firms turn to networking and ‘Best Friend’ networks when seeking international expertise.
"You've got subject matter experts in the home law firm seeking out people in other countries who they're happy to stake their reputation on," says Natalie Salunke, the general counsel for consumer credit provider Zilch.
Other firms such as Allen & Overy, Eversheds Sutherland, and Linklaters have flexible resourcing units offering on-demand expertise in specialist areas. They offer clients access to specialist freelance lawyers on a project basis. Specialist lawyers are hired and paid a daily rate.
Nigel Rea, Service Development Director at Lawyers on Demand (LOD), the flexible resourcing unit of Bryan Cave Leighton Paisner, says: "It would be nice to see some more collaborative partnerships where everyone can focus on what they're really good at, while the service provided to the client is top notch."
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