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Law360 (January 21, 2021, 2:54 PM EST )
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| Wendy King |
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| David Horrigan |
In a 2020 survey commissioned by our firms, Ari Kaplan Advisors LLC conducted phone interviews with 31 general counsel from a range of industries, including technology, telecommunications, consumer products, life sciences and financial services, about their roles today.
The survey was limited to those who serve as the chief legal officers of their organizations, and most were from Fortune 1000 companies, with 61% from companies with more than 1,000 employees. The results were published in November, in a report titled "The General Counsel Report 2021: Rising to Today's Challenges and Building Resilience for the Future."
The study examined how corporate legal departments are responding to the pandemic, a shifting digital landscape and other key issues stemming from the world's current crises. Most notable among the responses was the breadth of responsibilities that are now falling on the GC's shoulders. Less than 20% of respondents said the scope of their role was not impacted, or only minimally impacted, by the instability of 2020.
With this added responsibility is the additional expectation that counsel serve as key leaders in helping organizations survive the current environment and build resiliency beyond it. To that end, the survey identified the following roles as new or intensified areas of focus for GCs today.
Guardian Over Emerging Risk
This critical capability has been heightened by adding wide-reaching and rapidly evolving risks to the already long list managed by general counsel. One of the most notable emerging risks GCs encounter and feel ill-prepared to navigate is the impact of emerging data sources on e-discovery, investigations and regulatory compliance.
When asked about the top area of legal risk for business today, 65% cited privacy, data protection, security and/or data risk. Other top concerns included COVID-19 implications and intellectual property risk. However, across the board, chief legal officers indicated their feelings of preparedness for top risks have improved since 2019.
Chief Health Officer and Custodian of Employee Safety
The pandemic has forced 84% of general counsel surveyed to fulfill the unofficial — but critical — role of chief health officer and assessing and recommending policies to balance maintaining business activities with the health and safety of their employees.
A key concern of GCs is keeping an eye on the mental health of their employees, where many are balancing the pressures of simultaneously working, parenting, teaching and caregiving. Other responsibilities span how the company handles COVID-19 exposure in the workplace and implementing guidelines from the Centers for Disease Control and Prevention.
One chief legal officer said they tracked approximately 950 government orders related to their workforce, as well as CDC, World Health Organization and state recommendations. Another general counsel respondent said that as companies reopen their offices, the GC becomes the chief medical officer making decisions about contact of employees and body temperature thresholds, adding:
Where do I balance my role as GC and the well-being of my employees? The chief medical officer ... is a significant change when you are asking people to self-disclose, and the parameters around sharing that information is critical.
Mitigator of Skill Gaps and Outsourcing
Many GCs recognize skill gaps and bandwidth limitations among their in-house teams, which is driving specific needs for outsourcing to external experts, service providers and law firms.
When asked to select their top drivers for outsourcing legal work to law firms or service providers, surveyed general counsel identified the following: needing expertise not available within the internal team (84%), adding bandwidth in terms of head count (55%), and cost savings in outsourcing versus hiring (32%).
One GC said the top reasons for outsourcing include the need to enlist experts, such as on matters involving the U.S. Securities and Exchange Commission and mergers and acquisitions, and capacity. "I tend to outsource items at the highest level, such as very complex deals, and lower level, such as commercial contracts," the GC added.
Another said that the biggest driver for outsourcing is getting the right expertise for the right project.
Advocate of Technology Proficiency and Adoption
Confidence in technological capabilities increased by more than 15% over a similar survey conducted in 2019, with 55% of 2020 participants reporting that they believe lawyers have adequate technological competence. One-third of survey respondents are using artificial intelligence as part of their technology stack, and 70% use cloud or software-as-a-service systems.
While there is visible improvement on technology capability and adoption, it only goes so far. Survey respondents indicated a large gap remains between capability and talent, and aptitude using collaboration tools like Slack or Teams versus advanced e-discovery techniques or other complex software.
One GC interviewed in the survey said, "Lawyers have an adequate level of competence when using tools, but they lack a strategic understanding of technology and how it can improve their business."
With equity issues having reached the forefront of societal attention and debate, GCs today are likewise at the forefront of tackling diversity, equity and inclusion programs within their organizations. The survey revealed that 71% of the respondents have some role, oversight or priority focused on diversity, equity and inclusion initiatives for their company and/or legal department.
When asked to rank the effectiveness of their organization on managing and promoting inclusion and diversity, the respondents offered an average of six out of 10. One respondent suggested:
You can lead by example. You can make sure that the way that you are recruiting, promoting and managing the business can help lead by example. As an executive, you can hold people accountable and ask questions. It is amazing what a well-placed question can do to open people's eyes.
Mentor for the Legal Field
Survey respondents had a wide range of advice for their peers and their outside legal partners, particularly in how other in-house counsel should approach their roles and in setting standards for law firm attorneys.
One chief legal officer said:
Any crisis of any kind can be an opportunity for the legal department. You can be a true business partner and add value when you step outside of your role a bit and try to think along the lines to be a business partner over a legal adviser. Businesses are suffering in terms of declining resources, and people are scared and stressed. The legal department can bring a calming presence to that situation. That is what I try to do.
Flexibility was also a resounding theme throughout the survey. One GC said of dealing with the pandemic:
It is not a sprint or a marathon. It is a triathlon. It will last longer than what we have come to grips with as a society both economically and professionally. We will be dealing with this for a long time so help your team appreciate that. Assure your team members that we will learn and adapt along the way together.
Takeaways
There are several key lessons legal professionals can take from the survey results and use as a starting point for adapting to the new landscape.
One is that all lawyers, but especially in-house counsel, need to think of their roles as more than solely legal ones. Serving as a strategic, empathetic business leader is key to success in today's environment.
Willingness to take on new responsibilities and challenges will become increasingly important as a differentiating factor for chief legal officers and law firm partners. Lawyers should expect the general standards for good listening, empathy and relationship building to continue to rise as their colleagues, teams and clients work to rebound from these highly challenging times.
Another notable takeaway from the 2020 survey was a theme we saw in the previous study conducted in 2019. As reported by Law360 in 2019, in-house legal teams increasingly expect their partners to take the time to build meaningful relationships with them — and work to establish a strong understanding of their businesses. Once again, the bottom line message from chief legal officers was: "Know my business."
Any organization looking to establish a successful partnership with in-house legal teams must understand the current value dynamic, and be willing to invest in maintaining strong relationships. Chief legal officers won't hesitate to make changes in their bench of providers if they are falling short of the expertise, sophistication and quality expected.
The defining events of 2020 will be marked as pivotal moments on many critical fronts. Chief legal officers have been at the forefront of these issues, persisting in evolving their roles during a period that most describe as the most challenging of their careers.
The survey participants have clearly risen to the occasion. With a practical outlook on the implications and opportunities of emerging technology and a renewed focus on empathy, counsel are driving their teams and their organizations forward through unprecedented challenges.
With optimism for a brighter future, effective law department leaders have refined their approaches to be practical, business-oriented and, above all, peer-centric.
Wendy King is a senior managing director at FTI Consulting Inc.
David Horrigan is discovery counsel and legal education director at Relativity.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firms, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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