For many years, before the global pandemic we experienced (almost) five years ago now, in-house legal teams have been asked to do “more with less”. We speak to legal leaders every day and they are increasingly finding themselves at the intersection of rising cost pressures and resource constraints. As businesses face economic uncertainties, regulatory complexities, and heightened stakeholder expectations, in-house lawyers must deliver high-quality legal services while managing budgets and optimising limited resources. This challenge is expected to intensify in 2025, making it imperative for legal departments to adopt innovative strategies to remain effective and efficient.
This article explores the key challenges in-house lawyers face and provides actionable solutions to navigate these pressures.
The Challenge: Cost Pressures and Resource Constraints
- Rising Legal Costs: The cost of legal services, technology, and compliance continues to rise. External counsel fees, regulatory changes, and the need for specialised expertise strain already tight budgets.
- Increased Workloads: In-house teams are handling more work than ever before, from business-as-usual legal matters and regulatory compliance to litigation and corporate governance. This is compounded by the growing complexity of global business operations.
- Limited Resources: Many legal departments operate with lean teams, making it difficult to manage workloads without overburdening staff or compromising quality.
- Technological Disruption: While legal tech offers solutions, implementing and maintaining these tools requires upfront investment and ongoing training, which can be challenging under budget constraints.
- Stakeholder Expectations: Business leaders expect legal teams to deliver faster, more cost-effective solutions while mitigating risks and supporting strategic objectives.
Solutions for In-House Lawyers
To overcome these challenges, in-house lawyers must continue to adopt a proactive, strategic approach that balances cost efficiency with resource optimisation. Below are practical solutions to help legal teams thrive in 2025:
1. Leverage Technology and Automation
Legal technology is a game-changer for in-house teams facing resource constraints. We know that by automating repetitive tasks, legal departments can free up time for higher-value work and reduce reliance on external counsel.
- Implement Legal Tech Tools: Invest in contract management systems, e-discovery platforms, and document automation tools to streamline workflows.
- Use AI-Powered Solutions: AI can assist with legal research, contract review, and compliance monitoring, reducing the time and cost associated with these tasks.
- Adopt Self-Service Portals: Create self-service tools for business units to handle routine legal queries, such as standard contract templates or compliance checklists.
2. Optimise External Counsel Relationships
External counsel can be a significant expense, but strategic management of these relationships can yield cost savings.
- Negotiate Alternative Fee Arrangements (AFAs): Move away from hourly billing and explore fixed fees, capped fees, or success-based pricing models.
- Conduct Regular Audits: Review external counsel performance and costs to ensure value for money.
- Build a Panel of Preferred Providers: Establish long-term relationships with a select group of law firms that offer competitive rates and understand your business.
3. Focus on Resource Allocation and Prioritisation
With limited resources, in-house lawyers must prioritise tasks that align with business objectives and deliver the most value.
- Adopt a Risk-Based Approach: Focus on high-risk, high-impact areas such as regulatory compliance, litigation, and strategic contracts.
- Delegate Effectively: Empower junior team members or paralegals to handle routine tasks, freeing up senior lawyers for complex matters.
- Outsource Strategically: Consider outsourcing non-core legal work, such as document review or compliance audits, to specialised providers.
4. Enhance Cross-Functional Collaboration
Legal teams can achieve greater efficiency by working closely with other departments.
- Align with Business Goals: Understand the company’s strategic priorities and align legal efforts to support them.
- Collaborate with Procurement and Sales: Partner with procurement and sales teams to negotiate better rates with vendors and external counsel as well as letting the commercial teams have decision trees and templates to negotiate their own terms.
- Engage with IT: Work with IT departments to implement and integrate legal tech solutions seamlessly.
5. Invest in Talent Development
Once you have hired the right talent it is key to retain your team. A skilled and motivated legal team is essential for navigating resource constraints
- Upskill Your Team: Provide training on legal tech, data analytics, and business acumen to enhance team capabilities. Offer them opportunities to work in other areas of the business; particularly finance. It is vital for all lawyers to be numerate and be able to read a balance sheet.
- Promote Work-Life Flow: Lawyers' mental fitness is reported as amongst the worst compared to other professions. Reduce burnout by fostering a supportive work environment, adopt buddying programmes and offering flexible working arrangements.
- Hire Strategically: Benchmark your functions. What does your business need for the next stage of development and growth? Focus on hiring professionals with diverse skill sets, for example, legal operations specialists or tech-savvy lawyers.
6. Embrace Legal Operations
Legal operations (Legal Ops) is a discipline focused on improving the efficiency and effectiveness of legal departments.
- Establish a Legal Ops Function: Dedicate resources to legal operations to oversee budgeting, technology implementation, and process improvement.
- Track Key Metrics: Use data analytics to measure performance, identify inefficiencies, and demonstrate the value of the legal team to stakeholders.
- Standardise Processes: Develop standardised workflows for common tasks, such as contract review or compliance reporting, to reduce errors and save time.
7. Advocate for the Legal Department’s Value
In-house lawyers must demonstrate their contribution to the business to secure necessary resources.
- Communicate Impact: Regularly report on the legal team’s achievements, such as cost savings, risk mitigation, and support for business initiatives.
- Quantify ROI: Use metrics to show how investments in legal tech or external counsel deliver measurable returns.
- Engage Stakeholders: Build strong relationships with business leaders to ensure they understand the legal team’s strategic importance.
Conclusion
In 2025, in-house lawyers will continue to face significant challenges in balancing cost pressures and resource constraints. However, by embracing technology, optimising external relationships, prioritising effectively, and investing in talent and legal operations, legal departments can overcome these obstacles and deliver exceptional value to their organisations.
The key lies in adopting a proactive, strategic mindset and leveraging innovative solutions to transform challenges into opportunities for growth and efficiency. By doing so, in-house lawyers can not only survive but thrive in an increasingly complex and demanding business environment.