The global economic downturn has affected the requirements of in-house counsel in myriad ways; the most significant including maximising value, a focus on attracting and retaining well rounded, culturally adaptable practitioners and a deeper understanding of Gen Y lawyers, finds Seher Hussain

When looking back at 2011, recruitment consultants and in-house counsel report that several trends for in-house teams hold steady well into the new year. As expected, several of these stem from the continuing global economic downturn, which has had marked effects on the legal community.

Predictably, the in-house community remains adversely affected by the global economic downturn. Overall cost control remains a major priority for in-house counsel, with companies seeing budgets being tightened continuously. “Companies are being quite conservative about budgets,” says Genevieve Chia, head of in-house recruitment at JLegal in Singapore. “They are not throwing money at getting high profile in-house lawyers. We haven’t seen such an acquisition by a company in the last year.”

One of the ways in which this plays into the strategy for the legal team focuses on executive pay. “Due to high growth in most of Asia, executive pay in the region has already surpassed European levels, and is predicted to surpass the U.S. within three years – causing some concern over pay inflation,” says DJ Goh, chief legal counsel for Mercer in Asia. “We have been seeing an increasing focus on governance, with companies' remuneration committees taking a deeper interest and deliberating more carefully on matters related to executive pay.”

Recruitment consultants echo this trend. When discussing bringing lawyers over to Asia, Paul Lee, consultant at Robert Walters, reports that: “Expat packages are very rare now. You come here on your own terms.”

Less freedom with employee remuneration translates into less movement in the top strata for some companies. “In terms of legal counsel, most of the requirements we get now are mid level hires. There’s definitely less movement at the top positions,” reports Chia.

Besides executive pay, in-house counsel are also looking at keeping their teams leanly staffed and “utilise the outsourced options of traditional law firms and alternative legal service providers that are integrated within our facilities to deal with the ‘peaks’ in our workload, and for specialist or local legal expertise,” adds Goh.

Companies such as Mercer are also exploring other cost effective possibilities, such as “setting up centralised shared resources in the form of low cost 'offshore' and 'near shore' LPOs (legal process outsourcers) to handle standardised and repetitive work,” reports Goh.

Crossing cultures

Finite financial resources mean that in-house legal teams are investing in lawyers with well rounded assets. At the top of their list are practitioners who can easily adapt to different cultures by balancing Eastern and Western norms and behaviours. “We see a lot of requests for lawyers that are bilingual in Mandarin, especially as a growing number of companies deal with jurisdictions in China,” says Chia of JLegal.

Lee agrees, elaborating further that as more overseas companies set up operations in Singapore, they will start searching for candidates who can function in both languages. “My clients in Asia generally need lawyers that are business bilingual. So candidates from the Magic Circle, who have done a short stint in China and Hong Kong, are quite in demand.”

It is not just language abilities that matter. In-house counsel also prize cross border knowledge in their lawyers. “Paying attention to cultural nuances also becomes quite important. In various parts of Asia, culture is generally collective and non-confrontational in that people value being part of a group more than being individualistic,” says Goh. “As such, differences in opinion are often kept implicit. Sometimes, it is also a case of not what you say but how you say it…business challenges must be addressed with a sensibility for the various legal systems, cultures, intricacies and complexities that come uniquely with doing business in Asia.”

From the recruitment side, Lee agrees, adding that “overall, companies are looking for cross border skills. Lawyers need overseas exposure; that’s a soft skill that we are seeing a lot of requests for.”

Tailored training

One way in which in-house teams deal with limited finances is by boosting their team’s overall capabilities through professional training. David Huxley, managing partner of Simitri Group International, a communication skills training, coaching and consulting company, says: “What you see in this market is that Asian lawyers haven’t got the same soft skills for leadership that their counterparts would have in English or American or Australian firms. But firms and companies really need that local talent. So we’ve seen an upsurge in in-house and firm lawyers coming to us for training.”

Huxley specifically notes that several multinationals in the last year have sent their in-house teams to Simitri for training, “covering effective negotiation skills as well as strategies on how to influence people more effectively, as well as presentation and communication skills.”

Goh agrees, and elaborates further on the qualities that are necessary for in-house counsel in a regional role, which include “strong technical ability, flexibility, good people management skills, good 'EQ', good communication skills, and a sense of humour. It also helps to have a keen interest in regional business, political and social issues because we cannot give good and practical legal advice without being aware of these other considerations.”

Generation Y

A relatively new consideration that is gaining traction in the marketplace is the question of Generation Y lawyers; in terms of how to attract, understand and retain this demograph.  Although vaguely defined on a general basis, most sources put lawyers born between 1980 and the mid 1990s in this category. Incorporating this group into the workforce presents its own peculiarities, as both in-house counsel and recruitment consultants agree.

According to Mercer’s recent What’s Working research into employees’ views on work, “Gen Y employees have very different priorities and attitudes as compared to employees of other generations,” says Goh. “In Singapore, a whopping 56 percent of those aged below 35 said they were seriously considering leaving their organisation at the present time. With Gen Y making up a large proportion of Singapore’s workforce in the next five years, organisations will need to prepare themselves to grapple with the eccentricities of Gen Y, as well as possibly high levels of turnover.”

In this context, the retention of lawyers has become very important, notes Huxley. “You see a generational shift happening here with a lot of younger lawyers coming in that tend to be more aware of market and project developments. So the training component is also a way to try and retain people; it’s become very competitive to get and keep these lawyers!”

“Mercer’s research also shows that Gen Y employees have more in common when it comes to work styles and career outlooks with their colleagues across borders than older colleagues do,” says Goh. “This suggests an increasingly homogenous global workforce that may start to become more apparent in the next five years.”

The way forward

It’s probable that these trends will only amplify over the next year, cementing the importance of investing in their in-house legal team for companies.  These trends will also help signal the significance of an international mindset to lawyers. ALB