20% of local companies outlined cutbacks of up to a tenth of current legal fees.
78% of companies plan to reduce their legal function costs in the next two years, with 20% of firms outlining cutbacks of up to a tenth of current legal fees, a report by professional services firm Ernst & Young (EY) revealed.
Globally, legal spending averaged $238.31m (US$172m) for internal functions and $234.15m (US$169m) for external-related work.
Asia Pacific (APAC) and Europe expect the least impactful reduction at an average of 9%, whilst North America has the greatest planned reduction at 13%.
“Singapore respondents appear to be less willing to significantly reduce their cost on legal function. There are various reasons for this: some legal functions here are already operating on leaner models with limited options to cut back further, whilst others may not have the full knowledge on the available options for legal function to reduce cost-effectively and without disruption to ‘business-as-usual’,” commented Dmitry Tetiouchev, APAC law leader for EY, on the survey results.
The survey also highlighted challenges in talent and innovation in the legal sector. More than 3 in 5 employers or 66% of Singapore employers reported challenges in attracting and retaining talent for today’s legal functions, whilst 61% of respondents admitted to spending 20% of their time on routine compliance and “low value” tasks.
Meanwhile, 63% of Singaporean firms felt that the legal function had not benefited from innovation as much as other functions, such as HR, IT and finance. Business-as-usual pressures (46%), budget constraints (46%) and lack of appropriate technologies (22%) were cited as the top three barriers to legal innovation in the island.
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