In-House Corporate Counsel Barometer

THE PURPOSE OF THE STUDY

In 2005 Davies Ward Phillips & Vineberg LLP initiated a joint project with the CCCA to create, supervise and disseminate a survey of CCCA members' attitudes and opinions regarding topics of interest and importance to them, called In-House Corporate Counsel Barometer, to be presented at the annual Spring conference of CCCA. The study provided a wealth of interesting and useful information for our members. We were pleased to repeat the study in 2006, and are once again pleased to do so this year. Some questions have been repeated to develop trend information, and new questions have been added to provide insight on other areas. New questions throughout the report are indicated by NEW .

Highlights Of Study Findings

CHANGES VS. PREVIOUS YEARS

Compared to 2005 and 2006, this year's In-House Corporate Counsel Barometer has picked up on some notable shifts with respect to internal and outside counsel tracking measures:

• Since 2005, the advantages of working as in-house corporate counsel over working in a law firm have gained strength (e.g. being an active part of business decisions, applying their legal training to a business environment, getting a variety of legal work, etc.)
• The perception that it is important to have law firm experience before becoming an in-house counsel is stronger than it was two years ago
• More in-house corporate counsel (78% vs. 71% in 2006) would recommend becoming an in-house counsel to their friends/colleagues who are currently in private practice
• Keeping overall costs down is an increasingly important challenge for in-house corporate counsel
• A new alternative for 2007, "Enterprise-wide risk management" has become the second most important issue with which General Counsel is perceived to be involved
• An increasing proportion of in-house corporate counsel are recognizing the value for money offered by outside counsel
• The use of fixed fees and percent discounts in their dealings with outside counsel is becoming more prevalent among in-house corporate counsel

NEW TOPICS FOR 2007

Many new topics and questions have been introduced in 2007. Specifically, this year's study focused on:

• Additional Advantage of Working As In-House Corporate Counsel
• This year, a new item has been included in the list of advantages of working as in-house corporate counsel over working in a law firm: Enhancement of business skills. Another business-specific advantage, this item ranks third in the overall set
• Hours Worked
• On average, in-house corporate counsel are working 50 hours a week, and for a majority (63%) of them, this amount has stayed the same over the past two years.
• Cost Saving Measures
• The most common cost saving measures implemented over the past two years by in-house legal departments include "brought more in-house" and "require less service from outside counsel"
• Diversity
• "Diversity" within their legal departments emerges as a relatively unimportant issue for many in-house corporate counsel
• Litigation
• Most (84%) in-house corporate counsel are working in organizations against which at least one legal dispute has been filed in the past year
• And of those, one in three have been exposed to class action litigation over the past year
• One third (35%) of in-house corporate counsel say that the amount of litigation their organizations have faced in the past five years has increased; more (44%) expect further increases in the next five years
• Choosing Outside Counsel
• The level of communication/responsiveness of the firm and its lawyers appears to be the most important consideration in choosing outside counsel
• Terminating A Law Firm
• Three in ten in-house corporate counsel are working in organizations that have terminated a law firm in the past year
• Main reasons for termination include price, a general dissatisfaction with the level of service, and a lack of responsiveness
• Innovative Business Practices
• Most (86%) of in-house corporate counsel say that outside counsel has not developed an appealing business practice for their organizations
• "Discount fees/reduced rates" is the most commonly-implemented business practice

CONSISTENT WITH PREVIOUS YEARS

The In-House Corporate Counsel Barometer for 2007 also offers a consistent perspective from previous years when it comes to several in-house and outside counsel tracking measures:

In-House Counsel

• In-house corporate counsel are just as likely as they were in 2005 to report increasing job satisfaction (72% both years)
• Nine in ten (89%) still feel that their company values their work
• The business-related advantages of working as an in-house corporate counsel over working in a law firm (being an active part of business decisions, applying legal training to a business environment) continue to be regarded as the most appealing
• In-house corporate counsel are still on the fence about whether or not they are losing touch with practice of law by working outside of a law firm (51% think they are, 49% do not think so)
• The number one challenge for in-house corporate counsel continues to be staying on top of the volume of work
• Regulatory compliance is still expected to be the most challenging area of law for in-house corporate counsel and their legal departments over the next one to two years
• Hiring intentions for in-house legal departments remain steady, with one in four (38%) expecting an increase
• General counsel's number one role is still seen as an advisory one (vs. management or legal)
• Regulatory compliance is still the top issue for general counsel, according to respondents surveyed this year and last

Outside Counsel

• One quarter (23%) of in-house corporate counsel continue to feel that the services supplied by outside legal counsel over the last year have improved, while the majority (68%) continue to feel that they have stayed the same.
• The top reason for saying services have improved continues to be, "greater knowledge of our business needs" (37%)
• The same proportion of in-house corporate counsel (four in ten) indicates having had experience with alternative billing structures, other than hourly billing
• Expectations of increasing spend on outside counsel have remained constant

METHODOLOGY

For this survey, 722 in-house corporate counsel completed an on-line questionnaire. Given the finite CCCA membership population, the total sample can be considered accurate to within 177 3.4 percentage points, 19 times out of 20, of what it would have been had this entire population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population.

Please open the attached PDF to view the complete factum, graphical displays and detailed tables.

John Wright
Senior Vice President
Ipsos Reid Public Affairs
(416) 324-2900
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