Survey shows risk driving change across legal department strategy, technology and operations
Global legal departments have changed the way they are strategizing around and preparing for their biggest risks, according to a new report.
The General Counsel Report, released by FTI Consulting, Inc. and global legal technology company Relativity reveals that 87 percent of participants expect risk to increase in the coming year. Regulatory and global compliance challenges emerged as the number one issue for the first time in the five-year history of the report.
Moreover, increases in the scope and scale of corporate risk combined with continually growing demand on legal departments contributed to declining preparedness in every risk category studied. The study included surveys between Ari Kaplan Advisors and chief legal officers at large corporations in every major region around the world.
“Across discussions with corporate legal department leaders, there was a resounding sentiment that the past two years have been the most difficult on record, yet nearly all general counsel are bracing for additional challenges on the horizon,” said Sophie Ross, global chief executive officer of FTI technology.
“They feel underprepared in every major area of exposure, but they’re also taking significant and decisive action. Legal department leaders are setting new priorities, strategies and functions that allow them to simultaneously brace for the impact of increased regulatory and legal risk, while remaining open to growth, technology advancement and broader company leadership.”
Key findings of the first part of the four part report include:
- Regulatory issues dominated all other risk areas, with 30% of respondents noting this is their top risk for the coming year, compared to 23% who selected this category in the previous year report.
- While regulatory compliance rated number one among 30% of respondents, nearly all (92%) ranked it among their top five exposures. Data privacy and data protection followed, ranked in the top five by 80%, and other leading issues included implications of advanced technology (55%), ESG (53%), increased number of disputes and investigations (50%) and rising legal spend (43%).
- Artificial intelligence was mentioned in the context of risk management by 20% of participants, whereas it wasn’t mentioned at all in previous years.
Subsequent parts of the report will be released in early 2024.
Chief legal officers across North America, Latin America, Europe, the Middle East and Australia was surveyed in July and August, 2023.