Law firms that implement corporate social responsibility policies internally are likely to create a positive impression on most prospective clients, according to a study covering 28,265 in-house counsel across Managing IP+ and its sister brands IFLR+ and ITR+.
Of those who responded to the survey, 58% said CSR is important or very important to them. For Managing IP+ survey respondents specifically, the result is nearly identical, with 61% marking CSR as a consideration that factors into their hiring decisions.
Subsequent conversations with in-house counsel reveal the extent to which CSR initiatives factor into in-house lawyers’ decisions to hire external counsel.
According to most sources, CSR compliance isn’t the first thing they look at, but it does matter.
A Seattle-based IP counsel at a food and beverages company said: “CSR would be nice to have, but it’s not essential when we look for representation unless that is the drive for finding an external counsel.
“It really depends on the company’s requirements and needs.”
The research across all brands and follow-up conversations with in-house counsel also reveal that smaller corporations with tighter budgets know that they can’t be too picky, so CSR initiatives aren’t as important to them as for high-earning businesses.
For instance, the general counsel at a US-based manufacturing company said: “If you ask counsel at large companies about CSR and ESG, a lot of times they're going to give an answer that makes their organisation sound good.”
He also noted that large corporations themselves spend considerably on socially driven initiatives, which drives them to work with similarly placed entities.
“But when you're not as large an entity, one of the things you have to do is make sure all of your decisions are based upon what is going to make your organisation thrive in the future,” he added.
Therefore, while socially driven concepts are important, factors like billing rates and practices carry much more weight when hiring a new counsel, he noted.
CSR may not be on top of in-house lawyers' priority lists, but that doesn’t mean firms that can demonstrate responsible business conduct won’t get any brownie points from their clients.
Regional
Over half of the counsel surveyed in the Americas, APAC and EMEA said CSR is an important or very important consideration when they hire an external counsel.
This suggests in-house counsel across all regions value law firms that can demonstrate tangible efforts towards fulfilling their social duties.
Counsel from the Americas showed the most interest in whether their external advisers are responsible social businesses, with 61% of those respondents marking CSR as important or very important.
Those in the EMEA and APAC weren’t far behind, with 57% and 56% respectively finding it significant.
Notably, over one-third of respondents across all regions were indifferent towards CSR initiatives of a prospective external adviser.
In the Managing IP+ survey, EMEA outperformed the other regions, with 62% of participants ranking CSR as important or very important.
The Americas came second, with 59% of counsel marking CSR as significant.
As far as APAC is concerned, the Managing IP+ survey produced similar results to the broader study across all brands. Counsel from the region showed the least interest in CSR, with only 58% ranking it as an important or very important consideration.
Overall, the similarity in percentage points indicates that in-house IP counsel across all regions equally value law firms that can demonstrate positive CSR initiatives.
Across all brands, the Americas produced the highest mean score of 68%, with APAC trailing closely at 66.1%. EMEA was slightly behind, with a mean score of 65.4%.
Global revenue
A study across different revenue brackets revealed that interest in CSR initiatives is directly proportional to a company's earning power.
Companies in the highest earning bracket showed the most interest in CSR, with 60% of survey participants saying it is important or very important to them.
Corporates in the lowest earning segment, on the other hand, showed the least interest in how socially responsible a potential partner firm is, with 55% marking it as significant.
This could be because companies with smaller revenues and tighter budgets may have other priorities than CSR when engaging new counsel.
The Managing IP+ survey results are aligned with the findings of the broader survey.
Companies in the highest revenue bracket expressed the most interest in CSR, with 62% flagging it as important or very important.
Corporates in the lowest earning segment showed the least interest, with 59% marking it as significant.
The findings suggest that high-earning companies are slightly more likely to value whether a prospective external adviser has good social credentials.
Overall, across all brands, companies in the highest revenue bracket generated the highest mean score, at 67.1%.
Industry
From an industry perspective, the advanced manufacturing sector expressed the most interest in CSR, with 66% of respondents marking it as important or very important.
The consumer and power and utilities sectors also value CSR considerably, with 61% of participants highlighting it as significant.
The financial services and technology sectors are least impressed by the CSR credentials of their prospective external counsel, with only 54% highlighting it as something they would consider.
Overall, across all brands, the advanced manufacturing industry expressed the most interest, with a mean score of 69.9%.
Practice area
As far as practice areas are concerned, tax lawyers seem to care the most about whether their external advisers are good corporate citizens, with 67% of respondents saying it is important or very important.
In-house counsel across all other practice areas also demonstrated moderate levels of interest – between 49% (litigation) and 61% (IP).
Overall, the relatively similar scores suggest that in-house counsel, regardless of their area of expertise, would prefer working with counsel who are CSR-friendly.
In terms of mean scores, tax survey participants showed the highest interest, at 71.5%.
Methodology
Through our primary research with in-house counsel representatives, we ask them to rate a range of attributes and their importance in decision-making when selecting outside counsel.
We have aggregated the responses from our practice area-specific surveys in 2022 and 2023 and analysed the results in this report series. The data highlights the extent to which in-house counsels’ views on these attributes differ between industries, regions, revenue sizes and practice areas.
In total we have analysed responses from over 25,000 in-house counsel respondents over the two-year period.
To read the previous instalment of What Corporates Want, click here.
