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General Counsel Report from FTI Consulting and Relativity Finds Resounding Agreement Over Mounting Risk, Demand and Pressure
The findings of the study made clear that the strain upon corporate legal departments has not abated. Of the general counsel and chief legal officers surveyed this year, 79% reported increased risk and demand, compared to 60% in the previous year’s study. Among those, 100% reported overall concerns and strains on capacity have been amplified across seven unique areas, including ESG, business strategy, risk management, crisis and breach incident response, data privacy and compliance monitoring. Respondents also reported increases in numerous types of matters that fall on the legal department, including fraud, misconduct, data privacy violations, class action litigation, contract management demands, internal investigations and more. Only 7% of respondents indicated they did not see increases in any of the areas listed.
“Many chief legal officers are experiencing the most turbulent period of their entire careers,” said
Key findings covered in Part 1 include:
- 40% or more of respondents cited regulatory change, compliance, data protection and global and/or geopolitical uncertainty as their top risk areas.
- In ranking their top five risks, 33% of respondents listed data protection first, 23% said regulatory compliance is at the top of the list and 20% selected data privacy first.
- 57% of respondents included ESG issues among their top five risks, and 53% placed information and data governance in their top five.
- New regulations that require policy refreshes and additional headcount were reported as an area of rising challenge for 60% of respondents.
- 57% of respondents said they are concerned about the impact of unsanctioned uses of emerging data sources within their organization, which was a 10% increase from the 2022 report. One respondent said, “There are an increasing number of sources of data, and in a remote environment, it is harder to understand where those sources are…It is very hard to understand the governance about what you control and how to contain all of your data.”
- Feelings of preparedness to handle risks relating to data privacy and cybersecurity increased from the prior year, with weighted averages on a scale of one (not prepared at all) to five (very prepared) rising from 3.27 to 3.43 and 2.59 to 3.37, respectively. Preparedness for risks relating to emerging data sources decreased slightly, from 2.9 in the 2022 report to 2.73 in the current survey.
- Respondents also indicated they feel reasonably prepared for increased volumes in litigation and investigations (weighted average of 3.93), but few expressed confidence that their organizations are “very prepared” in any of the critical categories.
- 73% of respondents said that risks relating to AI and other advanced tools, including the use of unsanctioned AI-based applications, are key threats for which most organizations are not prepared, with almost three-quarters of the participants rating it at a one or two out of five.
“Concern about regulatory risk and ESG issues may be the biggest takeaway from our fourth annual edition of the General Counsel Report,” said
Part 1 of The General Counsel Report 2023: Global Legal Departments Alleviate and Respond to Critical Pressure Points is available for download here, and the findings will be discussed during a joint webcast on
Demographics and Methodology
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
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Source: FTI Consulting, Inc.