Agribusiness continues to be on the low end of the spectrum when it comes to legal aid, a new survey finds. Other industries, even ones with a much lower respective risk profile, keep teams of attorneys on staff. But as the legal needs of agribusiness — including large farms — become increasingly complex, how will that change?
A recent survey of 44 senior legal decision makers in 40 top agribusiness organizations has revealed that the agribusiness industry is experiencing regulatory and economic challenges that make it increasingly difficult to operate. Yet that same survey showed that many agribusinesses have either very small or no legal departments. Sixty-eight percent have three or less in-house lawyers, including 20 percent with zero and 25 percent with one in-house lawyer.
“While the average size of a U.S. legal department is 23 in-house lawyers, the survey indicated that the average size in the agribusiness industry is 12,” law firm Lathrop & Gage notes. “Excluding outliers, the average for the agribusiness industry is just eight, with a median of two in-house lawyers.”
Lathrop & Gage’s 2013 Survey of Agribusiness Trends details the legal risks and opportunities for the agribusiness industry. Respondents emphasized the need to ensure compliance, proactively prepare for new regulation and educate policy makers and the public on agribusiness needs. As such, respondents are expecting increases across all industry practice groups. The largest predicted increases include work associated with federal, state and environmental regulations.
“The agribusiness sector presents a complex legal environment in which to conduct business,” says Jean Paul Bradshaw, Lathrop & Gage Partner and former United States Attorney. “With great risks and opportunities come increased workloads and associated legal needs.”
But agribusinesses also invest less in contracting attorneys for their services than their peers. Along with comparatively small legal departments, the agribusiness industry invests in fewer legal resources. While the average legal spend across U.S. industries is $8.5 million, survey results reveal that the average legal spend in the agribusiness industry is just $2.7 million. Given limited legal resources and increasing workloads, the greatest challenges for survey respondents are budget and value management and managing workload.
“Despite limited resources, legal workloads are only increasing in order to meet this changing regulatory, social and technological environment,” warns Jay Felton, Lathrop & Gage partner and fifth-generation farmer.