According to the Mahlab Report 2016, a spike in class actions and other major litigation against Australian corporations is driving more and more in-house legal teams to recruit their own in-house litigation specialists to add clout to their dispute resolution teams. The emerging trend provides an ideal pathway for former private practice lawyers looking to make the switch to in-house roles, and also has the potential to destabilize the business model for law firms who represent corporate clients in litigation matters.

Harnessing specialist knowledge

‘There is a trend towards employing specialist in-house including litigation, the others being M&A, workplace relations, for example, as a way of acting on potential disputes at an early stage, and possibly nipping them in the bud,’ explained Mahlab managing director Lisa Gazis to The Australasian Lawyer. According to Mahlab’s report, the proportion of Australian lawyers now employed in-house has grown 20 per cent year-on-year, with in-house lawyers now accounting for around 30 per cent of the total lawyer population. The drive towards efficiency and cost-effectiveness is driving the trend, says the report: ‘Rather than briefing the entire litigation matter to an external law firm at potentially very high hourly rates and less manageable timelines, much of the groundwork and strategy can be completed internally.’

LPOs on the rise

While many companies are looking to bring specialist knowledge in-house, Mahlab’s report also found that a growing number are looking to shift less skilled legal work onto outside providers. Use of legal process outsources (LPOs) is winning favour with more in-house leaders than ever before, with Ireland and India-based LPOs generally viewed as the most preferable. ‘If done well, with due consideration given to confidentiality and other pertinent issues, outsourcing was generally viewed as a cost-effective, timely and highly responsive way to manage parts of litigious work,’ the report says.

Sources: Mahlab; Australasian Lawyer; Lawyers Weekly