A new report shows what Canadian law department leaders are thinking about managing their growth strategies, strategic investments, and performance
While the Canadian legal market typically has been a model of stability over the years, it was not alas immune to the pandemic-induced turmoil of the last three years.
But now, as newer and more complex regulations are flooding the market, and critical challenges — such as environmental, social & governance (ESG) issues or cybersecurity concerns — that had largely been hidden by more pressing matters beforehand emerge as major challenges, the corporate law departments of many Canadian companies are taking action. Many have shifted their mindset and their approach to managing how their needed legal work gets done and what they’re willing to pay for it.
To examine this more carefully, the Thomson Reuters Institute has published the 2023 Canadian Legal Market Update, which highlights the results of a survey of corporate law department leaders in Canada that sought to gain their perspective on key issues such as growth strategies, client relationship development, strategic investments, and performance management. (The report was taken from the results of 272 interviews with Canada-based respondents within the corporate in-house legal community in various legal roles within their companies, which were conducted among multiple different industries. These interviews were conducted throughout 2022.)
Our survey shows that many Canadian corporate law departments have shifted their mindset and their approach to managing how their needed legal work gets done and what they’re willing to pay for it.
Not surprisingly, this year’s report identified certain key developments that are now reshaping many aspects of the Canadian legal market, including:
An aggressive focus on risk — Since 2020, the percentage of Canadian corporate law departments talking about more aggressively preventing and mitigating risk for their companies has nearly doubled, the survey shows.
Hiring and retaining talent has become paramount — Talent in the legal industry became a flash point in 2021 — not only in Canada but everywhere — and more Canadian corporate law departments have made investing in talent a top strategic priority for 2023.
Requiring business savvy from their legal providers — While the attributes that Canadian corporate law departments look for in their external legal providers are similar to those sought by other corporate law departments around the world, business savvy — how well a law firm understands the client company’s goals and can offer advice that is practical and proactive in nature — is an attribute upon which Canadian corporate law departments place even more emphasis.
Indeed, the report offers some crucial insight into the minds of Canadian law department leaders, providing other parties — such as their external law firms — with a road map on what exactly these clients are looking for in their outside counsel.
“I like law firms that are practical, give me timely advice, and give me very commercial advice,” said one corporate law department leader in Canada. “So, if a law firm gives me a 20-minute rendition of the law and all the risks and everything, but doesn’t really give me a good answer, I’m not really interested in them. If you give me really practical advice that’s commercial that’s timely — that’s why I like you.”
All legal organizations in Canada should take note, as this report shows the attitudes, priorities, and mindset among Canadian companies’ law departments are shifting toward more aggressive risk mitigation, managing critical talent issues, and seeking more valued outside counsel.