As Canada marked its 150th birthday last year, a new report by Thomson Reuters and Acritas — the 2018 State of Canadian Corporate Law Departments — takes a look back at trends in the Canadian corporate and legal industry over the past five years in order to better understand how the modern legal department has evolved. More importantly, the report looks at what lessons can be employed over the next five years to help the nation’s legal departments reach their goals.
Not surprisingly (and similarly to its US counterparts), the role of the legal department within organizations in Canada has become more significant than ever. Amidst signs of economic instability — such as the uncertainty of international trade relations with key partners in the United Kingdom and the United States, as well as the impact of Canada’s Anti-Spam Law (CASL) — impacting the way companies do business, companies are looking to their in-house counsel for legal advice. What’s more, companies are looking to their in-house teams more and more for a business partner to guide the company through uncertain times.
Because of this, the modern Canadian in-house legal department has a set of goals that may not have been on its plate years ago, beyond the baseline of ensuring the effective delivery of legal services to its business. Today, corporate law departments must also be accountable for the value that it delivers in return for the cost and strategically aligning to the overarching business goal through risk prevention.
The modern Canadian in-house legal department has a set of goals that may not have been on its plate years ago, beyond the baseline of ensuring the effective delivery of legal services to its business.
Indeed, risk prevention today — including new mandates around key areas like cybersecurity — focuses heavily on regulatory and compliance risk, especially for organizations with an international remit. And cost containment remains a priority — the pressure to deliver value from spend is not subsiding. To improve performance, it is essential that the right metrics are in place to measure performance across the areas which align to the department’s goals. As this report shows, however, many departments are measuring cost but not much else.
Canadian legal departments are lean and rely heavily on outside counsel; and for the most part, law firms have raised their game by investing more in understanding their clients’ businesses and strengthening these relationships. However, there has been much slower progress in terms of value and there is still a disconnect between appetite for alternative fee arrangements (AFAs) and uptake.
Looking ahead, the changing pace of technology continues to revolutionize the work environment, and legal is not going to be left behind. Legal departments that have the right skill sets to embrace this are taking advantage of the greater efficiency these technologies present.
To get the full analysis of the ecosystem that Canadian law departments find themselves in today, download your copy of the 2018 State of Canadian Corporate Law Departments.