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Image: BTI Benchmarking Corporate Counsel Management Strategies 2014
Depending on who is answering the question, estimates for the legal market in the U.S. alone range from $100 billion to $300 billion. Needless to say, it’s a wide gap and as it tends to be with studies, the results usually center on the parameters: what’s included versus what is excluded.
What the industry might be able to agree on is that corporate counsel “is the center of gravity in the legal industry.” It’s useful then to understand what’s on the mind of corporate counsel, to understand the trends in the legal industry.
Legal Trends: Puzzle or Mystery?
Trends are part puzzle and party mystery and the difference between the two, as Malcom Gladwell once wrote, is distinctive. In puzzle, all the pieces exist and merely need to be arranged in a logical order to form a complete picture. In a mystery, we are relegated to relying on inference or intuition.
Invoice data, such as the ELM Trends Report, is an example of a puzzle: The pieces can be assembled. However, invoice data – like an investigation – is retrospective and it tells us what happened.
Where the trends are going next is a bit of a mystery, which is where surveys are often useful. While surveys can certainly be conducted to evaluate an experience, like law firm client satisfaction, surveys are often used as market research.
Survey data designed for this purpose – like intelligence gathering – is forward looking and used to test a hypothesis (or a null-hypothesis as statisticians might argue). With a degree of reliability, we are all afforded the opportunity to take action before something happens.
The Corporate Counsel Agenda
There are several surveys that provide a glimpse into the rationale for what is on the corporate counsel agenda in 2014. Certainly there are a range of issues facing GCs – costs, pricing, resources, BYOD, security – among many others. However in a review of current corporate legal department surveys one distinct pattern emerges: Compliance is keeping corporate lawyers awake at night.
Here are four survey reports on the corporate counsel agenda:
1. BTI Benchmarking Corporate Counsel Management Strategies 2014.
This report is based on “more than 3,700 interviews conducted over the span of 13 years.” BTI Consulting regularly provides useful updates, reports and webinars stemming from their research. In 2014, the study identified the top corporate legal challenges as:
a) deliver more value
b) control legal costs
c) ensure compliance
d) mitigate risk
It’s worth noting that delivering value and controlling costs switched positions between 2012 and 2013. Ensuring compliance ranked third in 2007, 2008 and 2010; second in 2009; dropped out of the top four challenges in 2011 and 2012 and has remained third on the list for the last two years.
2. ACC Chief Legal Officers 2014 Survey.
The Association of Corporate Counsel received survey responses “from more than 1,200 individuals in 41 countries who serve as the organization’s chief legal officer or general counsel” for its annual survey in 2014. According to the survey’s executive summary:
“CLOs see ethics and compliance, regulatory or governmental changes and information privacy as the top three issues of primary concern for the year ahead.”
In a blog post called The Things That Keep GC Up At Night, attorney Richik Sarkar broke these sections out by percentage:
- 88 percent of respondents named “ethics and compliance”
- 83 percent of respondents included regulatory or government changes
- 79 percent of respondents highlighted information privacy concerns
3. 2013 IMPACT® Benchmarking Survey.
Huron Consulting collected data from “71 companies of varying size and industry,” and found shifting priorities that counted compliance as an area of growing concern:
Since the last survey, Ethics and Compliance increased in importance relative to other business priorities and was rated as the highest law department business priority in 2013 (2.82 on a scale of 1-3, with 3 being very important).
4. Grant Thornton LLP 2014 Corporate General Counsel Survey.
The Grant Thorton online survey, which was conducted by ALM, collected responses from “250 in-house attorneys at public and private companies in the U.S.” This survey also surfaced compliance as a top concern, however it dug a little deeper into the reasons why this issue is top of mind. The survey found:
- 47% or about half are “not sufficiently familiar with SEO and DOJ guidelines” because
- Lack of compliance staff and budgets 65%
- Multiple regulatory and compliance models around the world 40%
- Difficult to manage across jurisdictions 31%
- Lack of top-level commitment 19%
- Too many regulations to stay on top of 15%
“It is hard to imagine a government investigator — or a jury — accepting ‘lack of resources’ as the primary reason for failure to comply,” said Bill Olsen, principal and Global Investigations and Anti-Corruption Services leader at Grant Thornton.
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In considering the plethora of data available, we might be able to paint a picture of which way the center of legal gravity is leaning. It’s a step closer to removing the mystery of corporate legal trends.
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