‘Extreme’ stress linked to high turnover of in-house counsel at ASX100 companies

In-house counsel and private practice lawyers are under “extreme” pressure, a panel of experts in Sydney concluded last month. Continued “unsustainable workloads” are significantly affecting the wellbeing, productivity and retention of highly skilled lawyers.

Over the past 12 months, more than 20 of the 100 highest-ranking corporate counsel in ASX100 companies changed roles. That’s according to Chris Drummer, Director of Policy and Chief Legal Officer Engagement for Australia and Asia Pacific at the Association of Corporate Counsel (ACC). He told delegates attending a Thomson Reuters Inform legal leaders masterclass that stress and burnout could be key drivers for this high turnover.

“General counsel and chief legal officers at ASX100 companies are under extreme pressure due to the increased risks of their roles,” he said. These risks include potential prosecution, disqualification and financial penalties for failing to prevent misconduct within their organisations. “If you have the normal stressors of the job, but then think when you go home at night ‘I might be prosecuted by ASIC for all the wonderful work that I’m doing’ it might put a certain flavour on a certain idea and extra stressors on you,” said Drummer.

These findings are backed up by a 2022 Deloitte market survey of C-suite leaders in the US, UK, Canada and Australia. That survey identified that 70% were seriously considering quitting their job for another that better supported their wellbeing. In addition, around two-fifths of C-suite leaders said they were exhausted, stressed or overwhelmed.

Corporate counsel at financial services companies in Australia are dealing with multifaceted levels of “extreme pressure”. These include the Hayne Royal Commission’s inquiries into suspected misconduct and AUSTRAC’s heightened scrutiny of anti-money laundering protocols. “Regulators are really honing in on companies, but the brunt of some of this falls on the in-house lawyers and their duties and responsibilities. Obviously that will be another stressor,” said Drummer.

Meanwhile, in-house counsel are under “enormous diverse pressure” to give legal and commercial advice on many fronts, Drummer said. Business executives are increasingly asking corporate counsel for advice on legal, HR, corporate affairs, risk and compliance issues — dangerously blurring the lines of legal professional privilege (LPP). With a two-year governmental review of LPP underway, in-house counsel may soon face greater scrutiny of their involvement in key business decisions.

The widening role of in-house counsel creates its own stressors. “There’s a real tension around our simultaneous and quite incompatible roles as the facilitator and also potentially the policeman. There’s a lot of ambiguity in balancing both of those accountabilities at the same time, and that can be particularly stressful,” said David Field, Chief Legal Counsel and Director, People and Finance, at Canon Oceania.

Managing stressors and risks in modern legal workplaces

Another challenge facing General Counsel and law firm leaders is how to ensure the wellbeing of team members who work remotely long term. A key concern is limited managerial oversight of how well these lawyers are handling their heavy workloads. Another issue is limited visibility of how well recent hires in different locations are adapting to their new roles and responsibilities.

Insufficient reporting of mental wellbeing challenges in the workplace is a major challenge for the legal profession. A global survey by the International Bar Association identified that 41% of lawyers would not discuss mental wellbeing concerns with their employer for fear that it may have a negative impact on their career. In addition, 35% said their work has a “negative” or “extremely negative” impact on their wellbeing.

Excessive and prolonged stress can have a major knock-on effect on the business, Georgia Bolton, Associate Facilitator at Positive Group, told delegates as she presented at the masterclass. “Decision making and productivity are directly impacted,” she said in a separate masterclass session on workplace wellbeing. “It can also reduce motivation, engagement and focus.”

Bolton noted that, to help manage these issues, businesses should equip all leaders and staff with the key psychological tools to proactively manage their own wellbeing. These include emotional and attentional regulation, cognitive flexibility and social support. “What we use our minds for matters,” she said.

The World Health Organisation recently estimated that 12 billion working days are lost globally each year to anxiety and depression, creating an annual productivity cost of US$1 trillion.

Melinda Upton, CEO of Positive Group, has found that organisational culture on wellbeing can make or break a business. “If you get it right, you can increase productivity, retention and growth. If you don’t get it right and you have individuals who are really struggling, the problem becomes contagious,” she said. “Healthy workplaces are good for business. They reduce the costs associated with absenteeism and attracting and retaining talent.”

Field noted that, as Chief Legal Counsel, it is a “massive” and “never-ending” task to shape organisational culture and manage potential misfeasance risks — particularly when there is ongoing staff turnover. “It’s very rewarding but, if it’s not working, it’s also incredibly stressful,” he said. The question of “what don’t I know?” is one that plagues him. Compounding the problem is that in-house lawyers are constantly having to triage their heavy workloads.

“Because the job has more work than you could possibly do, much of it involves identifying what you’re not going to do. And that can be particularly stressful for junior lawyers because they’re very diligent,” said Field. “Much of the growth trajectory of an in-house legal career involves getting more comfortable with one’s judgment in relation to ‘which rocks am I not going to pick up and look under?’ and ‘that one is probably not going to kill us, I’m not going to worry about that one’.”

Aligning these value judgements with organisational risk strategies is key. “I cannot insulate the company from risk. All I can do is empower it to manage risk, and I must make sure that I highlight if it has inadequately resourced risks,” said Field.

For Upton, who is also Chair of the Minds Count Foundation, it is vital that General Counsel have a place at the executive table. This can enable them to speak up on resourcing decisions and better effect organisational change. “They will be better able influence what is being prioritised by the business,” she said.

The impact of legal technology and generative AI on lawyers’ wellbeing

An ongoing priority for legal leaders is maximising value and minimising risks from limited resources. Technological tools such as legal research platforms are proving invaluable in boosting performance and supporting staff wellbeing. “Technology really does aid in productivity and in managing work overloads,” commented Michael Horton, VP of Client Relationship Management in Asia and Emerging Markets for Thomson Reuters. General Counsel and law firm leaders are also using legal collaboration tools to better manage team workloads. “It provides an empirical way of seeing if one person has too much work and creates an alert process,” he said.

The recent rise of generative artificial intelligence (AI) has raised questions over the value of automating legal work through dedicated tools. A key concern is the high volume of content that some generative AI tools currently create in response to a query. Each piece of generated content then needs to be checked carefully for fabricated data, incongruous citations and incoherent logic.

“I absolutely value the potential for AI to remove drudgery from people’s lives, but there is a real risk that it poses,” commented Field. “We have accountabilities to try and guide our lawyers towards doing more meaningful and value-generating work in general — and avoiding generating lots of free crap through AI.”

Another challenge facing private practice and in-house lawyers is that clients are increasingly expecting generative AI to deliver time and cost savings in legal work. This is putting additional pressure on overstretched lawyers, who still need to safeguard the quality and value of their legal advice. “We need to ensure that we’re still solving problems for clients, not exposing the business to further risks through AI,” commented Upton.

A disparity between how junior and senior lawyers perceive AI is an issue that legal industry leaders will need to address in the coming years. “Junior lawyers are anticipating that they might be replaced by AI, while more senior lawyers are seeing how it could be embraced,” commented Jane Lewis, Vice President of Sales in Asia and Emerging Markets at Thomson Reuters. “We need to work in a way that is smart, sustainable and purposeful.”

Organisations that invest in staff wellbeing can boost productivity and financial results. Are you ready to learn how to develop successful workplace wellbeing? Download The Wellbeing Revolution’ now, or watch the masterclass and panel discussion on-demand here.

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