With the increase in disputes, the nature and conduct of
litigation is expected to become more complex both in Canada
(72% see an increase in complexity) and globally (61%).
When combined with the observed increase in the volume of
information requested and disclosed and the number of cross-
border or multi-jurisdictional disputes, the total costs incurred
to complete the dispute process are increasing.
Interestingly, the formal mechanisms to resolve disputes
continue to shift in Canada. The use of mediation is seen by
40% of GC to be increasing, while only 23% and 11% of GC
see an increasing use of arbitration and courts, respectively.
This result is quite different from global trends where about
40% of GC believe that the use of each of mediation,
arbitration and courts will increase in the next five years.
Doing more with less
It is not surprising that relatively few Canadian GC reported
that the budget for the legal department was expected to
increase in the coming year. The request to do more with
less is common in the current business climate and legal
departments are not exempt from this pressure.
The budget pressures and challenges being faced were
succinctly commented on by several GC:
“I believe our in house litigation capability will increase. I
believe that governance will become more significant given
regulatory change from the 2008 financial crisis. Given the
cost of outside legal services, we will continue to be asked
to do more with less.”
“There will be more pressure on resources given the
regulatory regime and complexities.”
“We need to be smarter about how we deploy our limited
internal resources and tougher on controlling quality and
costs of external counsel. Over time, I think there is a real
possibility that business law goes back to its origins (in the
railroad era), when the best corporate lawyers and litigators
were employed [by] corporations and not by law firms.”
One GC told us that:
“If the legal function survives in an era of cost cutting, it will
be because we are seen as helping to navigate the business
around risks therefore avoiding costs and justifying our
existence.”
Final words
In Canada there is an ongoing evolution of the role of GC.
While not universal, there is a growing expectation that
an important function of GC in Canada is to be a strategic
advisor to senior management and directors. By combining
company and sector knowledge with legal experience, GC
are becoming business barometers who are seen as a critical
component to a company’s stability and success.
Decrease
19%
48%
33%
Increase
Stay the same
Expected Change in Legal Group Budget
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
At Risk | Volume 7, No. 1 | 19