Survey offers key insights into future legal department operations
Cybersecurity, regulatory compliance, and data privacy continue to be the most important issues to businesses, with industry-specific regulations posing the greatest legal challenge, according to the findings of a new survey.
The Association of Corporate Counsel 2023 Chief Legal Officers Survey, in partnership with Exterro, explores how the CLO role continues to expand as a critical business partner and what is top-of-mind for CLOs in the coming year.
This year’s respondents noted that a majority (67 percent) of CLOs expect the volume of privacy-related regulatory enforcement to increase in 2023, up seven percent from 2022.
Despite this, only 38 percent of CLOs said they plan to hire more lawyers this year, compared to 45 percent in 2022. Additionally, fewer CLOs reported that they plan to send more work to law firms and alternative legal service provides this year than last year.
The survey’s additional key findings include:
- The CLO’s role as an integral business partner continues to grow, with most CLOs reporting directly to the CEO (77 percent) a result that has remained stable for five years
- CLOs’ corporate function oversight is increasing, with at least 20 percent saying they oversee one or more of the following: compliance, privacy, ethics, risk, government affairs, ESG, and cybersecurity response. A four percent increase was shown in the number of CLOs that now oversee privacy, risk, and cybersecurity response since just last year.
- Data management saw a five percent increase from last year in those who selected it as a top strategic priority for the legal department.
- Top legal challenges changed and vary geographically; following industry-specific regulations were data protection privacy rules, up four percent from last year to 59 percent, and mergers and acquisitions with 38 percent. Additionally, more CLOs in the US see regulations as the biggest challenge (68 percent) compared to those in Europe (52 percent) and more than 40 percent of CLOs in Asia and Europe expect political changes to be the top challenge, compared to just 32 percent in the US.
- 41 percent of CLOs said they plan to invest in new legal technology solutions in 2023. Contract management remains the top technology for investment as reported by 67 percent of CLOs.
“The ‘age of the CLO’ shows no signs of letting up,” said Veta T. Richardson, ACC president & CEO. “The value of applying their unique training and experience to roles outside the traditional legal function is increasingly being recognized as beneficial to the strategic and operational needs of their organizations. It does remain to be seen if this slowdown in hiring is a signal that legal departments are nearing their target operational sizes or an indication of a larger pullback in spending due to economic concerns.”
Legal operations was listed as the top strategic initiative in legal departments from 70 percent of CLOs, followed by right-sourcing legal services (45 percent) and cost minimization (43 percent).
“We’re excited to partner once again with ACC on this valuable resource for in-house legal leaders,” said Bobby Balachandran, president and CEO of e-discovery company Exterro. “The 2023 Survey demonstrates that CLOs’ priorities are shifting to accommodate the convergence of legal operations, privacy, regulatory compliance, and cybersecurity response—and that they are responding to that growing scope of responsibilities with new strategies and technologies.”
The survey analyzed data from 892 CLOs across 20 industries and 35 countries.