60% of General Counsel Indicated Worry over Mounting Risks, Many Cited Lagging Preparedness in Critical Areas
WASHINGTON, Dec. 01, 2021 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today announced findings from its Technology segment’s annual study of corporate legal departments, in partnership with global legal and compliance technology company Relativity. Based on a detailed survey and one-on-one interviews between Ari Kaplan and chief legal officers at large corporations, The General Counsel Report 2022: Leading with Endurance Through Risk, Culture and Technology Challenges, revealed that emerging expectations and obstacles are demanding unprecedented resolve from corporate legal teams. In a series of three installments, the report will cover the key areas — across risk, culture and technology — that general counsel expect to dominate time and resources in the year ahead.
In Part 1 of the report, the majority of respondents spoke at length about their concerns over intensifying corporate risk. Roughly 60% indicated that their risk landscape is expanding or becoming more difficult to navigate in areas spanning compliance, regulatory enforcement, data privacy, information security, emerging data sources and ongoing effects from the pandemic. Feelings of preparedness dropped from the previous year in every major category discussed. The report shares detailed insights from study participants, their strategies for responding to increased risk and year-over-year comparisons against responses from the General Counsel Report’s 2020 and 2021 editions.
“A resounding theme of endurance was unmistakable in this year’s General Counsel Report,” said Wendy King, a Senior Managing Director within FTI Technology. “Over the past two years, our reports have documented how in-house counsel have risen to calls to become strategic business partners within their organizations and fulfill responsibilities across an ever-expanding job description. What we’re seeing this year is that the burden on general counsel is increasing yet again, and their ability to meet intense risk, people and technology challenges will be tested over the long term. While this is a daunting outlook, the good news is that legal teams also achieved notable successes in their 2021 initiatives, providing a strong foundation for ongoing resilience into 2022.”
Key findings covered in Part 1 include:
- Data protection is a clear and rising threat for 46% of respondents, while more than one-third are concerned over increased regulation and antitrust enforcement. When asked about the most concerning risk, one respondent said, “It has to be the increased regulatory scrutiny over the past couple of years…everywhere we turn regulators are emboldened. It is that increased regulatory scrutiny combined with a hyper-vigilance around reputational risk that everyone seems to have.”
- While general counsel felt relatively well prepared (4.02 on a scale of 1 to 5) for data privacy obligations and regulations such as GDPR and CCPA in 2020, that confidence slipped notably (to 3.27) for 2022.
- While the use of collaboration platforms and cloud file sharing was not a focus in previous years’ interviews, this year more than one-third of general counsel indicated increasing risk stemming from the accelerating growth of emerging data sources across costs, efficiencies, data privacy, information governance, compliance monitoring, security and e-discovery processes.
- In parallel with the rising concern over the effects of emerging data sources, legal teams are feeling far less prepared to handle them, with the average preparedness rating for this area dropping from 3.77 in 2020 to 2.9 this year.
- General counsel also listed environmental, social and governance requirements and their impending impact on business, reputation and regulatory compliance as a new area of risk.
- Preparedness for the impacts of advanced technologies such as AI and blockchain were also low, but steady when compared to previous years, hovering around an average rating of 2 on the 1 to 5 scale.
“Given the data trends and new risks we’re seeing among corporate clients, it’s not surprising that general counsel are reporting a lack of preparedness in responding to the impacts of emerging data sources,” said Sophie Ross, Global Chief Executive Officer of FTI Technology. “Keeping pace with the growth of corporate data is difficult for even the most sophisticated organizations, and that rate of growth is continuing to accelerate. Still, working toward organizational control over the evolving data footprint and adjusting core workflows accordingly will be critical priorities for legal teams to benchmark against in the year ahead.”
David Horrigan, discovery counsel and legal education director at Relativity, added, “The general counsel in our inaugural General Counsel Report let us know they were no longer leading ‘The Department of No,’ and our third annual General Counsel Report indicates they have become ‘The Department of Everything.’ From dealing with environmental issues and employee health to creating data lakes and managing inclusion and diversity efforts, they find themselves doing things most lawyers probably never contemplated in law school. It’s why we do this report, giving readers inside access to general counsel for candid commentary on the vital issues of the day.”
Part 1 of The General Counsel Report 2022: Leading with Endurance Through Risk, Culture and Technology Challenges is available for download here, and the findings will be discussed at length during a joint webcast on December 8. Speakers include Ms. King, Mr. Horrigan, Mr. Kaplan and Monique Ho, General Counsel at Course Hero. Free registration is available here. Part 2 and Part 3 of the report will be released in early 2022.
Demographics and Methodology
During July and August 2021, Ari Kaplan personally interviewed 30 general counsel with predominantly Fortune 1000 companies. Nearly 57% had revenues that exceed $1 billion, and 70% had over 1,000 employees. Most were in telecommunications and technology (40%); 13% percent were from life sciences; and 13% were from manufacturing; with the remainder from the construction, energy, retail, real estate, consumer products, R&D and advertising/marketing industries.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 6,600 employees located in 29 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.46 billion in revenues during fiscal year 2020. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalized and independently managed. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.
Relativity makes software to help users organize data, discover the truth and act on it. Its SaaS product RelativityOne manages large volumes of data and quickly identifies key issues during litigation and internal investigations. The AI-powered communication surveillance product, Relativity Trace proactively detects regulatory misconduct like insider trading, collusion and other non-compliant behavior. Relativity has more than 300,000 users in approximately 40 countries serving thousands of organizations globally primarily in legal, financial services and government sectors, including the U.S. Department of Justice and 198 of the Am Law 200. Relativity has been named one of Chicago's Top Workplaces by the Chicago Tribune for 10 consecutive years. Please contact Relativity at firstname.lastname@example.org or visit http://www.relativity.com for more information.
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Source: FTI Consulting, Inc.