“Reimagining the Legal Function Report 2019.” Courtesy of EY

Rising business costs and offering competitive salaries are some of the reasons that 82% of in-house legal leaders will be forced to cut legal spend over the next two years, according to EY's “Reimagining the Legal Function Report 2019.”

That could be the result of greater oversight from executives outside of legal, according to the report. Thirty-seven percent of respondents indicated that over the next two years, they plan on cutting legal spend by 11% to 20%. Eighteen percent of respondents indicated they do not plan on cutting legal spending. The rising salaries of lawyers, according to the survey, are one reason legal departments have to find areas to cut costs.

“Lawyers' salaries have been on a steep upward trend in markets like London, and therefore firms pay hefty salaries to attract mid‑career or newly qualified lawyers,” EY Riverview Law CEO Chris Price said in the report. “Having made the hire, the legal function is then forced to keep up with private practice salary expectations, often outstripping their internal counterparts' salary increments.”

But even with the right pay, 59% of respondents indicated they struggle with attracting talent.

“The recruitment challenge for legal teams seeking junior lawyers is to attract them with meaningful work, not routine activities, and demonstrate the potential for career progression,” Paula Hogéus, EY global labor and employment law leader, said in the report.

The options that firm attorneys who want to leave private practice have broadened. Before, firm attorneys would want to go in-house to be more involved with the business. Hogéus said that now lawyers have the option of working on a contractual basis and roles in legal tech startups.

Another issue is finding ways to give new in-house attorneys meaningful work, rather than menial tasks.

“The recruitment challenge for legal teams seeking junior lawyers is to attract them with meaningful work, not routine activities, and demonstrate the potential for career progression,” Hogéus said.

In order to find meaningful tasks for junior in-house employees, businesses are beginning to outsource those more menial tasks. Thirty-three percent of businesses indicated they are already outsourcing tasks such as contract management, entity management and document retention.

“Smart procurement practices mean that outsourcing these activities to a single service provider, usually at a fixed or commoditized fee, removes the need for the legal function or company secretariat to work out how to deliver these activities,” Mike Fry, EY head of global compliance, said in the report.

A spokesperson for EY did not respond to request for additional comment on the survey results. EY surveyed 1,058 senior legal practitioners from businesses in 25 countries for the results of the survey.