MALAYSIA

Team size
Almost half of the in-house teams of those surveyed (48.6 percent) are of between two and five. In-house departments of six-to-20 are the next most common (35.1 percent), and this is followed by in-house lawyers working solo (6.8 percent), those in teams of 21-50 (5.4 percent) and finally teams of 51 or more (4.1 percent).

A commanding majority (77.3 percent) said their in-house teams are likely to stay the same size over the coming 12 months, up from 50 percent in last year’s survey. One fifth of those asked believe their teams will grow, while the other 2.7 percent expect their team to get smaller over the next year.
Those expecting their teams to remain as they are were split down the middle on whether they were content with this – half of them referencing a poor economy (and in particular, the oil market) and budgeting as the reason and the other half stating that their teams were of the optimum size for the work taken on.

Increased business size and job demand led many of those anticipating growth to do so, with many requiring new expertise and extra hands on deck to take on upcoming work: “Legal and regulatory issues are the utmost concern for most of the financial institutions at this juncture, particularly with the huge penalty/fines imposed on institutions for non-compliance or contravention of laws, rules and regulations”. Meanwhile, cost-cutting and internal reorganisations saw some predict that their teams would shrink.

Recruitment
Job advertisements edged out the Asian-mena region’s overall favourite method of finding in-house counsel with 51.3 percent of those surveyed preferring this method as opposed to the 46.1 percent that use recruiters (the regional favourite). Use of recruiters, however, is up from last year, when 39.3 percent of those in Malaysia preferred this route. Job websites are also a frequent means of employment, as 35.5 percent use these. 19.7 percent find that referrals from other in-house lawyers are best, referrals from external counsel are trusted by 17.1 percent, hiring directly from external counsel and referrals from others within the company are used by 14.5 percent each and the rest prefer other means.

KEY ISSUES AND CONCERNS
Malaysia’s In-House Community feels that the available legal talent pool is too shallow, with industry knowledge largely lacking in the jurisdiction. Some noted specific laws that recently came into effect as areas where knowledge and experience are scarce, though others mentioned a lack of more fundamental skills, such as drafting.

Many in-house counsel in Malaysia are in a struggle to “convince the business unit to look at the legal risk of [what they are doing]”. “Our commercial colleagues are unable to comprehend and understand the need to minimise legal risk vs their commercial profit [sic]”, another told us.

Legal being perceived as a cost rather than an aid was also mentioned by others, and in the coming year, some see the issue of tackling more work with less resources as a cause for concern.
Interestingly, unlike in the other ASEAN jurisdictions, no Malaysian responses cited concerns over the effect of the forthcoming economic integration, though many may have indirectly referred to this when referring to “updating legislation” as a cause for concern.

Working with external counsel
External counsel’s expertise in a specific area is a deciding factor for 81.6 percent of Malaysia’s In-House Community, as are fees. Also emphasised were responsiveness (60.5 percent), reputation of law firm (42.1 percent), reputation of an individual lawyer (36.8 percent) and relationship between company and law firm (26.3 percent). The next-most important factor is free know-how (for example: legislative updates), with 17.1 percent influenced by this. (Figure 19)

No one particular issue has stood out as a concern for in-house counsel in Malaysia when dealing with external counsel in the last 12 months, though excessive fees, according to 39.5 percent of those surveyed, is the main downside to external help; followed by failure to understand the company, a complaint held by 38.2 percent; work performed slowly, as stated by 35.5 percent; and failure to answer questions in a timely manner: a problem had in the past year by 34.2 percent of those asked. (Figure 20)

Almost three quarters (73 percent) see no reason to adjust the degree to which they rely on external counsel in the coming year, while 16.2 percent expect to use them more often and 10.8 percent anticipate using their aid less.

As well as a lack of adjustment in the volume of work they assume they will receive, the in-house counsel in Malaysia expecting no change in work undertaken externally said that though the load would likely increase, they were going to take on the extra bulk internally, with some claiming that they simply do not have the choice due to budget.

Business expansion (some of which being overseas) and the requirement for specialised knowledge were the main reasons given by those expecting to use external counsel more, along with new regulations. In cases where in-house counsel said they would use private practice lawyers less, most pointed to a preference to handle matters in-house, though cost, as per usual, was a prevailant factor.

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