Legal Ops Grows; CLOs Strive “See Around Corners,” says Survey

by | Mar 2, 2016

Legal Ops Grows; CLOs Strive “See Around Corners” says Survey

Corporate legal departments will experience healthy growth this year, according to the latest findings from the Association of Corporate Counsel’s (ACC) Annual CLO Study. The survey finds legal operations roles are in high demand and broadly, CLOs plan to invest more money in-house, than in previous years.

Last week we wrote about how the survey relates to current corporate legal trends – Study Suggests 4 Corporate Legal Trends on the Rise – this week we’re diving into the survey itself a little more closely.

The ACC study suggests as GCs face increased pressure to do more with less and prove value to the business, operational roles in the legal department are becoming more important than ever:

“GCs who invest in chief operating officers or other legal management professionals enable their departments to employ innovative strategies to reduce costs, use technology in new ways and restructure work flows, freeing the GC to focus more time on contributing to business strategy,” said ACC president and CEO, Veta T. Richardson in a statement.

Inside Counsel Spending to Outweigh Outside

This year’s survey finds internal legal department spending will exceed outside legal spending. In addition, as more corporations vie for global business in an increasingly digital market, CLOs report issues of compliance and increased regulatory scrutiny as the top two issues that “keep them up at night.”

“An astounding one-in-three general counsel told us that their companies have been targeted by regulators in the past two years, reflecting the additional risk companies are exposed to as they increase their cross-border work and face a wider range of government scrutiny,” added Ms. Richardson.

5 Takeaways from the 2015 ACC CLO Survey

The study examines a myriad of issues facing the Office of the General Counsel and gives clues as to what can be expected over the next 12 months. Here are aspects that stood out for us:

Legal department headcount grows.  GCs are arming themselves with additional operational support staff to help them work more effectively and efficiently. According to the report, almost half of all respondents reported legal operations staff positions in their department. This represents a stark contrast to just a year ago, when just two in 10, reported these roles.

The study found it’s not just legal ops that plan to grown – CLOs have designs to increase staffing throughout the entire legal department. The study indicates nearly 40 percent of CLOs added in-house staff last year.  Survey respondents report a need to beef up expertise in the following areas: compliance, contracts, general legal advice, and regulatory or government affairs.

2. CLOs Try to See Around Corners. More than 70 percent of CLOs said issues of ethics and compliance are the top issues “keeping them up at night.” Regulatory challenges too were rated high, ranking within a percentage point.

In addition, the study found 31 percent of CLOs were targeted by a regulator or government entity for a violation in the last two years. CLOs in particular, are feeling the heat because they are tasked with “having to see around corners,” in order to protect the corporation from unanticipated risks. Government entities are enforcing stricter penalties for non-compliance and, in some rare cases, can even lead to huge monetary payouts and jail time for some executives.

Also see these related posts:
3 Ways Corporate Legal Operations Use Metrics
Defining Legal Operations and Assessing Maturity
5 Tips for Improving Corporate Legal Maturity

3. The White Knuckles of Cybersecurity Continue. Nearly 60 percent of CLOs said data security is a pressing issue this year. Additionally, 22 percent of CLOs said their company has experienced a data breach in the last two years. Although data security issues are almost impossible to completely avoid today, however, more and more government entities are enforcing mandatory notification and emergency response plans.

4. Happy to be Business Partners, Strategic Advisors. Although the responsibilities of CLOs continues to evolve with more expectations being put on them to serve as strategic advisors to the business, an overwhelming majority of CLOs, 82 percent, report a level of satisfaction with their jobs.

What’s more, a little more than 40 percent report the highest level of satisfaction in their roles and a majority of CLOs said being a partner to the business is how they prefer to spend their time. Perhaps this explains why today’s CLOs bring with them a host of useful non-legal skills such as emotional intelligence and executive presence, as they seek to build these identical skills in their own staff.

5. Gender Gap Remains. Seventy percent of men reported making more than $200,000 annually while only 62 percent of women reported making the same. In addition, only 21 percent of men reported making under $200,000, while more than 30 percent of women reported the same. It is important to note, according to the study, experience doesn’t explain these variances in salary.

* * *

A summary of the last year’s survey, the 2015 CLO Survey, can be found here:  Budgets, Compliance, Security Top CLO Priorities, ACC Survey Says.

This post is by Carla Del Bove, who provides support to the business of law software product line based in the LexisNexis Raleigh Technology Center.

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Contributing Writer
Contributing Writer

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