These days, we’re all getting used to rising prices. But the hardest cost increases to deal with are those we can’t predict or prepare for. Sadly, given the current shifts in the business environment, that’s the kind of nasty shock that General Counsel (GCs) are all too likely to face in the coming months.

It isn’t hard to see why. UK consumer inflation is around 9% and widely projected to hit 11% this autumn, meaning cost pressures are increasingly entrenched across the economy. With interest rates also rising, and salaries picking up as the post-pandemic “great resignation” fuels the war for talent, the inflationary squeeze is set to tighten.

Turbulence ahead

The inescapable conclusion? While we don’t want to talk ourselves into a recession, there’s no doubt the next couple of years will be a bumpy ride for all businesses. And in-house legal departments will – as usual – be in the front line as GCs look to do more with less, striving to deliver rising business value with fewer resources. 

It’s a difficult balance to strike. And while legal departments enjoyed a relatively buoyant year in 2021, experience shows how fast conditions can deteriorate. Which means it’s time for GCs to buckle in for turbulence ahead – an imperative underlined by the latest industry figures.

Take Thomson Reuters’ 2021 State of Corporate Law Departments report. It finds that last year saw a boom in in-house legal activity, with 58% reporting a surge in workloads. But at the same time, 29% had their legal budgets cut – suggesting the squeeze on finances was already underway. 

Montresor’s Legal Salary Report 2022 signals a similar warning. It says last year’s dramatic rebound in global M&A and PE activity triggered a spike in law firm salaries, in turn filtering through to in-house legal teams. An example? Base salaries at VP level – that’s five-ten years PQE – in investment banks leapt by 15% in just six months. 

Given such developments, it’s hardly surprising that GCs’ traditionally strong focus on costs is continuing – and even intensifying. Lexis Nexis’s latest report on value creation by legal teams shows that 70% of in-house counsel regard reducing the cost of service delivery as an important way to add value. Non-legal and business skills are also key: 98% say investment in these skills enables legal teams to provide more effective advice. 

Weighing up the options

Combine all the factors now at play – rising costs and investments needs, downwards pressure on budgets and an economic environment that’s uncertain at best – and it’s easy for GCs and their teams to think, “Here we go again”. Not for the first time, the squeeze is on. But how to deal with it this time around?

Drawing on experience from previous cycles, let’s review the options. You could take on less work and/or downsize the team. Switch to cheaper (and therefore probably lower quality) external legal providers. Take a more risk-based approach to the activities the team actually undertakes: do we really need all those supplier NDAs? Or maybe buy the latest whizzy, all-embracing tech solution that will solve all your problems (it won’t).

The common problem with these approaches? They all reduce service quality and increase risk. What’s more, the overall effect may well be greater use of external legal services, cancelling out any savings made internally. Add in the impact on the legal team’s culture and morale, as they become increasingly stretched, and it’s clear the old approaches have run out of road.

The way forward: go fixed

The good news? There’s a new solution to hand that hasn’t been available in previous times of stress. Sign up for a fixed fee on your legal services for the next few years – and get price certainty, and consistency of quality and delivery at a stroke.

There’s an analogy here with how people manage their own finances. If you’ve got a mortgage, what do you do if you think interest rates are set to rise? Agree a fixed rate for three or five years to get through the rough patch. It’s a no-brainer.

Though plenty of law firms might tell you differently, it’s the same with legal services. And Dentons Helix’s solution is built on this realisation. Using our own lawyers, technology and process efficiencies, we deliver high- quality, business-as-usual legal work over the course of a fixed three-year period for a monthly fixed fee. 

What do you get for that fee? Commercial and employment tribunal work delivered by your own dedicated Dentons Helix team that’s fully integrated into our wider private practice – enabling any specialist work to be handled by our more experienced lawyers. With continuous improvement and the latest tech baked into the agreement, so the service evolves to meet your needs ever more closely. All for a fixed price, for three years.

The benefits: looking beyond price certainty

The benefits are legion. The clearest is that, as GC, you regain control of your legal spend so you can plan and manage your costs, whatever happens with your business and the wider economy. Workload rockets? Dial up the service to cope. Falls off a cliff? Scale it back. Your call. With no worries about inflation, staff retention or budget cuts.

But the benefits go further. Take culture. We build our teams to be a great fit for your business and a great place to work, with the right mix of people and skills – including non-legal – tailored to your organisation and industry. And throughout the contract term, we use real-time data to pinpoint opportunities to boost value through business partnering and new efficiencies. All freeing up your own team to focus on delivering your business’s strategic objectives.

Join the next generation

The message is clear. What we’re offering is the next generation of legal services, bringing together the best of private practice and managed legal services. For price that won’t go up. 

To find out more, please get in touch. As conditions get rougher, we can help you navigate a smooth course. We’d love to explain how.