The Association of Corporate Counsel (ACC) Australia partnered with Empsight International to produce the 2020 ACC Law Department Compensation and Policies Practices Report, drawing from a survey of corporate legal departments from 68 organizations in Australia.
The outlook for 2021 remains static as 52.6% of companies are projecting a freeze in salary budgets, while 5.3% have lower projections compared with 2020. However, about 21% of companies indicated no impact and 10.5% said that increases would be made by exception only.
The report provides insights into legal department staffing and spending practices, budget trends and forecasts, as well as other compensation and human resources policies. The data were collected between June and July 2020.
“The report demonstrates that at a time when legal departments are being asked to take on an increasingly strategic role across the wider business, the ongoing impact of covid-19 means they are doing so with decreasing law department budgets,” said Tanya Khan, vice president and managing director, ACC Australia and Asia-Pacific.
“For in-house counsel, the continuing covid-19 pandemic has not surprisingly resulted in the majority of law departments implementing work-from-home arrangements,” said Khan. “What is more surprising is that a large proportion of law departments anticipate the continuation of work-from-home practices following the pandemic.”
The pandemic has hit company budgets across Australia, with 53% of legal teams surveyed having frozen their spending for the year. About 16 % of respondents said that they may award merit increases on an exception basis, while 10.5% of the respondents acknowledged a possibility of salary reductions.
With the global economic uncertainty, the vast majority of organizations (94%) in the survey did not offer additional compensation for additional hours worked due to pandemic.
With regards to the impact of covid-19 on furloughs, layoffs and reductions in workforce, 10.8% of in-house teams said they had furloughed employees, but 83% reported no changes. None of the participants reported layoffs.
Legal teams’ hiring outlook remains positive, with 62-88% indicating that their hiring plans are unchanged, depending on employee type, and almost no company reporting rescinding job offers. On the other hand, 15-28% of organizations have frozen their hiring across all law department employee types.
On average, more than 70% had not made staffing changes in legal specialty areas, while 20.7% indicated an increased use of outside counsel for human resources work since the outbreak of covid-19. Other areas where participants cited an increased use of outside counsel were contracts (11.9%), litigation (11.8%) and regulatory (11.5%).
“ACC will continue to deliver impactful research into the in-house legal sector in 2021 and beyond, and we look forward to using that research to better understand the challenges and issues impacting in-house legal departments across the Asia-Pacific region,” said Khan.