The research found that in-house lawyers are feeling the heat between the need to execute business strategy and the financial and reputational damage which can occur if legal risk is not managed effectively.

The findings come in a survey of 350 Australian corporate counsel in more than 200 organisations, carried out by law firm King & Wood Mallesons (KWM).

Around 20 per cent of survey respondents admitted not having a specific anti-bribery and corruption policy despite this being a hot topic for Australian companies which have faced a raft of high profile investigations, reports Lawyers Weekly.

Regulatory compliance was also a bugbear for legal departments with counsel frustrated by the slow pace of harmonisation of federal/state and territory laws and reduction of red tape.

Concerns around billing continue with two in three companies complaining about current fee arrangements with their external law firms.

Meanwhile, more than one in three expected to grow their teams in the next three years with strongest growth expected in real estate, construction and infrastructure and industrials as well as consumer and health sectors.

The effects of globalisation on corporate counsel were the stand out findings of the report, according to KWM partners Jason Watts and Joe Muraca, who drafted the report.

‘Global economic developments and market conditions are having a direct impact on the in-house legal team and the role it plays. In-house teams are charged with managing the significant challenges and opportunities arising out of the European crisis, the US downturn and the rise of Asia,’ said Mr Watts.

The report also found that a fly-in, fly-out approach to business was no longer appropriate as meaningful, individual relationships are now key to completing deals.

‘The impact of Australian companies adopting global expansion strategies and engaging in offshore activity has created a new dynamic in the legal services market, with direct impact on the relationship between in-house counsel and the law firms they choose to partner with,’ said Mr Muraca.

The firm produced the report in partnership with four general counsels: Cathie Armour (Macquarie Capital), Andrew Clarke (Origin Energy), John Harrison (GE Australia and New Zealand) and Carmel Mulhern (Telstra Corporation).