As the overseer of an organization’s legal function, the General Counsel seeks to be proactive and perform the role of a strategic advisor to the ELT, board, and the business while managing the in-house legal team. In considering how General Counsel will fulfill the role in 2024, these executives must anticipate, analyze, and plan for the challenges the law department will face.
BarkerGilmore surveyed General Counsel/Chief Legal Officers about their challenges in 2024. Among the responses received, the GCs primarily identified five challenges: budget; recruitment and retention of talent; technology; regulatory concerns; and outside counsel spending. This article summarizes these five difficulties and broader themes the GCs discussed.
5 Challenges GCs Expect in 2024
1. Budgetary Constraints
The most frequently cited concern GCs identified for in-house legal teams in 2024 was managing the budget.
As a GC from a public life sciences company observed, “improved and broader services internally” were expected “with a smaller budget.” Furthermore, a GC from a public industrial and manufacturing business highlighted how legal teams must balance the costs of cybersecurity and ESG with the “fiduciary obligation to the company to maximize profit for shareholders.”
A private equity-backed technology GC indicated that the “lack of funds to work on operational advances” hindered the ability “to be ready to scale in the future.”
2. Recruitment and Retention of Exceptional Talent
One GC from an industrial and manufacturing company pointed to the current state of the economy as one reason recruiting and retaining talent is such a challenge. The reason provided for this is that the “current economic situation has impacted legal jobs and reduced their work scope due to projects being on hold.” The economic environment pressures GCs to reduce the team’s headcount or limit the number of people the team can add. GCs must consider how to manage budgets and maintain sufficient staffing levels to serve the company’s needs.
Finding talent and ensuring the team is composed of adequately trained individuals to address legal and business issues are aspects of the challenge as well. The GC of a Fortune 500 emphasized the difficulty of finding “talent that meets the changing dynamics of businesses.” Another private healthcare organization’s GC reported a “lack of qualified legal team employees.” One GC attributed the dearth of talent to the salary increase from law firms competing for exceptional candidates.
Relatedly, GCs noted the challenge of retaining employees, especially in a budget-constrained organization, and indicated that motivating employees in an environment lacking funds has been a challenge and takes creativity to keep people challenged and happy. It is also difficult for in-house teams to maintain the increasing workload alongside staffing that has not kept pace.
3. Implementation of Technology While Managing the Risks and Complying with New Requirements
GCs cited artificial intelligence (AI), data privacy, and cybersecurity within the technology theme as a challenge for 2024.
GCs seek to learn how to use AI to enhance the company’s and legal team’s processes while dealing with the intellectual property and other risks of AI. The GC of a private professional services organization reported that the in-house team is looking toward “embedding AI solutions to predict and help the management of legal risks” this year. Another GC endeavors to incorporate technology, including AI, “to create effective efficiencies to allow employees to do more value-add work.” A GC of a public technology company noted the team’s challenge would be finding “safe uses of generative AI in the business.” Additionally, an industrial and manufacturing company GC predicted 2024 as the year legal teams realize “the promise and potential of generative AI and similar technologies that will transform our ability to deliver value.”
Many in-house legal teams plan to focus on new cybersecurity and data security measures implemented nationally and globally. Several states have enacted or are considering enacting bills surrounding data security rules. In 2023, the Securities and Exchange Commission issued regulations about the disclosure of cybersecurity incidents and reporting, and New York State amended its cybersecurity rules for businesses to require more board oversight and reporting about incidents and cybersecurity programs.
4. Increased Regulatory Demands on In-House Legal Teams
Those surveyed noted the challenge of managing the varied regulatory concerns with fewer financial and human resources. Moreover, the GCs observed that the amount of state, national, and international regulations in-house legal teams track is increasing quickly.
GCs pointed out that regulations across technology, ESG, and privacy were causing extra demands on the legal in-house teams. A GC of a public technology company described the challenge as an “increasingly complex regulatory environment.” Others mentioned how in-house teams are responsible for monitoring regulations regarding global trade, tax, and employment laws. Regulations around AI creation, AI uses, and cybersecurity were added to the regulatory challenges predicted for 2024.
5. Management of Increasing Costs of Outside Counsel Spend
As one GC of a public healthcare company summarized, “Law firm rates are increasing faster than our company revenue, causing costs to outpace income, leading to lower margins.” With outside counsel costs and the related concern of salaries for in-house legal team members increasing, legal executives are seeing impacts on budgets and hiring. Furthermore, budget constraints will force GCs to find a solution to the rising costs of outside counsel.
Contact BarkerGilmore to Address In-House Legal Team Challenges
BarkerGilmore tracks and monitors industry trends to ensure in-house legal teams are prepared for the difficulties they face in 2024. Our experienced team of distinguished executive search consultants and former General Counsel and Chief Compliance Officers advise law departments on searching for and retaining world-class talent, building an efficient team, and finding solutions for managing outside counsel spending. Contact BarkerGilmore to discuss recruitment, leadership development, or law department consultations.
Connect with a legal recruiting advisor
* indicates required fields
