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View from the Top: GCs’ 2024 Outlook on Legal Budgets, Talent, and Innovation

Axiom’s third-annual research report dives into the mind of today’s General Counsels and reveals an urgency for in-house legal leaders to innovate new models to help their organizations thrive.
87%
of GCs are concerned their legal department won’t be able to invest in the necessary talent and resources due to economic volatility in 2024
81%
of legal departments don’t have the necessary staffing resources in-house to do their jobs effectively
100%
of GCs said it’s difficult for their legal department to hire the right attorneys to address their needs
97%
of GCs engaged a law firm to support their company’s legal matters last year, sending them an average of 26% of their work
100%
of GCs who engaged a law firm last year experienced challenges that caused them to regret engaging the law firm
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Budget Cuts
Law Firms
Modern Solutions
Budget Cuts

GCs overwhelmingly report their teams lack resources across the board—the necessary budget, staffing, technology, expertise, and team structure—to accomplish their required tasks.  

As they continue struggling to do more with less, GCs face a succession of roadblocks, including an average 11% reduction in their legal department budgets. A full 63% of GCs have a high level of concern that their legal departments won’t be able to invest in the talent and resources they need this year. They need to flip that script by looking to innovative methods, solutions, and services that can help them achieve the flexibility, productivity, and efficiency “mission accomplished” demands. 

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Law Firms

In-house resources are lacking, but turning to law firms to handle everyday tasks isn’t an ideal solution either, GCs said. 

Even as 81% of GCs report that their teams lack the necessary staffing to effectively accomplish their required legal and administrative tasks, 80% anticipate a likely headcount freeze this year, making it clear that adding more in-house resources isn’t likely. Yet while nearly all (97%) engaged the support of a law firm last year, all who did so (100%) found reasons to regret the alliance. The vast majority (89%) maintain law firms are not a completely effective solution to their resourcing challenges.

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Modern Solutions

So, what’s a shrewd GC to do? Like all industries, the legal industry is evolving, and GCs can no longer count on or afford to stick with the business strategies that worked in the past. 

Addressing outdated resourcing strategies requires adopting solutions such as new technologies, building out operations professionals within their legal departments, and rethinking how and when to partner with modern legal service providers.

Insights into the state of the in-house landscape are crucial to help GCs understand this matrix, the business and operational climate nationally, and innovations and other options now at their disposal to help them make informed, sound decisions for their teams and the organizations they serve.

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It’s no secret that GCs work in a risk-averse industry that’s historically been slow to embrace change. But if there’s one major take-away from this year’s national study, it’s that today’s GC has no choice but to flip that script.

As in-house legal leaders watched sky-high law firm rates continue to rise, 97% of GCs continued to dip into their depleted law firm budget, to their ongoing regret.

Making matters worse, of the GCs who engaged a law firm last year, every one indicated that some of the work they outsourced could have been handled by their in-house team if timing and staffing bandwidth allowed. But it didn’t.

When GCs acknowledge outsourcing to costly law firms was regrettable in some way and their own legal department could have handled more work internally if resources allowed, why, then, did they engage law firms? More than half (56%) said it was due to a lack of in-house capacity or specialist expertise.

One answer can be found in optimizing their legal solutions by incorporating new resourcing models. As this research highlights, the traditional approach of staffing up (hiring internally) or sending out (engaging with law firms) is inefficient and insufficient at best.

Today, more than ever before in the industry’s history, there are new and exceptional resources GCs can consider and capitalize on when determining how best to allocate limited internal and external resources cost-effectively. 

The dual challenge of lagging in-house resources and experiences with outside law firms that are often high-cost yet unsatisfactory has many GCs looking for an alternative. The tide is shifting as most GCs who sought support from a law firm last year express their willingness to outsource certain legal matters to a flexible legal talent provider instead of a traditional firm. Their driving force? The promise of lower costs coupled with unparalleled quality and oversight. 

Confronting the face of change, is it possible to work within tight budgets, tackle novel legal matters, and still mitigate risk? Our research indicates “yes,” given the right resourcing matrix. Insights into the state of the in-house landscape are crucial to help GCs understand this matrix, the business and operational climate nationally, and innovations and other options now at their disposal to help them make informed, sound decisions for their teams and the organizations they serve.

Embracing the next-generation of legal services can go far in reducing or eliminating the challenges GCs reported in this national study. They can make prioritization and scaling easier with a tech-savvy, AI-enhanced method of matching project needs with high-quality lawyers—whether in-house or external—optimizing their annual budget, and reducing the risk of team burnout in the process. Try that with a traditional ALSP. (Hint: You can’t.)
Law Firms Aren't a Panacea

As in-house legal leaders watched sky-high law firm rates continue to rise, 97% of GCs continued to dip into their depleted law firm budget, to their ongoing regret.

Making matters worse, of the GCs who engaged a law firm last year, every one indicated that some of the work they outsourced could have been handled by their in-house team if timing and staffing bandwidth allowed. But it didn’t.

When GCs acknowledge outsourcing to costly law firms was regrettable in some way and their own legal department could have handled more work internally if resources allowed, why, then, did they engage law firms? More than half (56%) said it was due to a lack of in-house capacity or specialist expertise.
Adopting Innovative Models

One answer can be found in optimizing their legal solutions by incorporating new resourcing models. As this research highlights, the traditional approach of staffing up (hiring internally) or sending out (engaging with law firms) is inefficient and insufficient at best.

Today, more than ever before in the industry’s history, there are new and exceptional resources GCs can consider and capitalize on when determining how best to allocate limited internal and external resources cost-effectively. 

The dual challenge of lagging in-house resources and experiences with outside law firms that are often high-cost yet unsatisfactory has many GCs looking for an alternative. The tide is shifting as most GCs who sought support from a law firm last year express their willingness to outsource certain legal matters to a flexible legal talent provider instead of a traditional firm. Their driving force? The promise of lower costs coupled with unparalleled quality and oversight. 

What's a Shrewd GC to Do?

Confronting the face of change, is it possible to work within tight budgets, tackle novel legal matters, and still mitigate risk? Our research indicates “yes,” given the right resourcing matrix. Insights into the state of the in-house landscape are crucial to help GCs understand this matrix, the business and operational climate nationally, and innovations and other options now at their disposal to help them make informed, sound decisions for their teams and the organizations they serve.

Embracing the next-generation of legal services can go far in reducing or eliminating the challenges GCs reported in this national study. They can make prioritization and scaling easier with a tech-savvy, AI-enhanced method of matching project needs with high-quality lawyers—whether in-house or external—optimizing their annual budget, and reducing the risk of team burnout in the process. Try that with a traditional ALSP. (Hint: You can’t.)
Access the Full Report