THE HAGUE, Netherlands — General counsel in the Netherlands are becoming more tech-savvy and more willing to turn to alternative legal service providers to get assistance on their legal matters, according to the results of a just-published survey of GCs.
The third bi-annual General Counsel NL Benchmark Survey showed that 58% of GCs surveyed now say they are actively using new technology to improve their level of service delivery. In 2016 — the last time the survey was taken — that percentage was 36%.
Further, 49% of GCs indicated that they have an increased need for alternative service providers instead of lawyers, compared to just 20% in the last survey.
General Counsel Netherlands (GCN), the largest professional knowledge network for executive legal officers, conducted the survey. Petra van Hilst, founder of GCN, said she was struck by the more active technology use by GCs in the Netherlands. “That’s a very positive development because due to the changing society, native technology is more important,” van Hilst said. “And, due to the fact that there’s still a lot of cost pressure on companies, it’s a no-brainer to try to make your operations run more efficiently by increasingly the use of technology.”
Remarkably, van Hilst added, was that when GCs were asked what technology or innovation was the most important for their legal department to have, 72% percent said it was contract management systems. “That’s quite a high percentage!”
Perhaps pushing the need for technologically driven efficiency, is that many in-house legal departments in the Netherlands are seeing a big increase in work around areas of data privacy and compliance with governmental regulation and cross-border rules.
“Many Dutch in-house lawyers work for holding companies of large international conglomerates,” van Hilst explained. “So, they have to manage all these things abroad, including compliance rules from Brazil to China and elsewhere.” This has compelled in-house lawyers in the Netherlands to devote more thought to allocation of resources and workflow strategies in order to keep up, she added. “Their ‘pie of work’ is defined differently than it was before.”
Another interesting conclusion from the survey had to do with cost management, and how GCs are viewing their budgets and resources. According to the survey, 87% of GCs said they expect total legal costs to remain the same (44%) or increase (43%) over the next two years, compared to 2016, when 72% of GCs expected their costs to stay the same (30%) or increase (42%).
Despite this, 30% of GCs surveyed said they feel that they currently have insufficient financial resources at their disposal to manage legal risks.
This comes, van Hilst noted, during a time where corporate CEOs in the Netherlands are declaring that because the dark days of the financial crisis have passed, there is less need for a high legal spend. “It’s interesting,” she said. “During and right after the crisis, you had CEOs saying that the current times demanded more legal budget, but now the percentage of chief executive officers saying that has dropped very significantly — almost in half. Meanwhile, the number of GCs feeling they have insufficient financial resources has gone up!”
There was also a similar disconnect in terms of corporate law department staffing, with 53% of the legal departments surveyed reporting an increase in the number of full-time employees within the department over the past two years; and 48% saying additional staffing increases were likely during the next two years.
Still, more than half of GCs said their legal department currently has insufficient capacity for the level of work they are doing.
Fortunately, van Hilst pointed out, at least some of that new in-house staff is coming in the form of professional managers. Forty percent of GCs in the Netherlands already employ specific persons within their legal department to deal with legal operations.
Compared to similar benchmarks in other countries, like Australia, the Dutch legal operations number is very high, she said.
“So, I think that’s why you are seeing the in-house legal department itself becoming better managed and acting more like a real operational unit within the company itself,” she added. “And I think that as the legal world is changing, the GC itself, as a professional, also thinks it’s very important for him or her to embrace this change.”
No surprise then that 57% of GCs surveyed said the GC position should be part of the company’s board of directors; while in 2016, that same percentage — 57% of the GCs — said they should not.
The GCN released the results of its latest survey at its General Counsel NL Fall Conference 2018 on Oct. 11.
Petra van Hilst is a multilingual lawyer, connector, speaker and networker in the international legal field. As a founding member of General Counsel Netherlands (GCN), her goal is to promote and professionalize the role of the final responsible in-house lawyer. She is also the initiator of the General Counsel Executive Program, an international academic program/mini-MBA for GCs who seek to develop their nonlegal and strategic skill set.
Van Hilst holds an LL.M. (Master of Laws degree) from the Utrecht University School of Law in the Netherlands. She was also educated at the Fredric G. Levin College of Law at the University of Florida in Gainesville. Van Hilst has vast experience working as a GC in various international corporate environments, including for finance, tech and media companies.