General Counsel Report from FTI Consulting and Relativity Reveals Declining Risk Preparedness Across Global Corporate Legal Departments
06 Dezembro 2023 - 9:30AM
FTI Consulting, Inc. (NYSE: FCN) and global legal technology
company Relativity today announced findings from The General
Counsel Report. The study uncovered substantial changes in how
global legal departments are strategizing around and preparing for
their biggest risks.
The report, which is based on a detailed survey and one-on-one
interviews between Ari Kaplan and chief legal officers at large
corporations in every major region around the world, revealed
contrasting priorities throughout nearly every area of the
corporate legal function, including equal enthusiasm and caution
regarding technology transformation and investments in hiring amid
budget constraints. Notably, 87% of participants expect risk to
increase in the coming year and regulatory and global compliance
challenges emerged as the number one issue for the first time in
the five-year history of the report. In parallel, increases in the
scope and scale of corporate risk combined with continually growing
demand on legal departments contributed to declining preparedness
in every risk category studied.
“Across discussions with corporate legal department leaders,
there was a resounding sentiment that the past two years have been
the most difficult on record, yet nearly all general counsel are
bracing for additional challenges on the horizon,” said Sophie
Ross, Global Chief Executive Officer of FTI Technology. “They feel
underprepared in every major area of exposure, but they’re also
taking significant and decisive action. Legal department leaders
are setting new priorities, strategies and functions that allow
them to simultaneously brace for the impact of increased regulatory
and legal risk, while remaining open to growth, technology
advancement and broader company leadership.”
In a series of four installments, the report will cover
escalating digital risk and regulatory compliance challenges, key
privacy and environmental, social and governance (“ESG”)
challenges, legal department technology adoption and legal
operations trends.
Key findings covered in Part One include:
- Regulatory issues dominated all other risk areas, with 30% of
respondents noting this is their top risk for the coming year,
compared to 23% who selected this category in the previous year
report.
- While regulatory compliance rated number one among 30% of
respondents, nearly all (92%) ranked it among their top five
exposures. Data privacy and data protection followed, ranked in the
top five by 80%, and other leading issues included implications of
advanced technology (55%), ESG (53%), increased number of disputes
and investigations (50%) and rising legal spend (43%).
- Forty percent of all respondents said their company is
following activity around renewed U.S. regulatory enforcement under
“dormant” laws (e.g., Clayton Act, Robinson-Patman Act).
- Artificial intelligence was mentioned in the context of risk
management by 20% of participants, whereas it wasn’t mentioned at
all in previous years. One general counsel in Australia said, “I am
concerned because we are not clear on its outputs and we have
created a generative AI policy to create guardrails. We cannot
prohibit its use because people love it, but I want to make sure
there are guidelines that will not run afoul of regulations or our
compliance obligations.”
- Challenges surrounding emerging data from cloud tools,
collaboration platforms and chat applications jumped substantially,
with 62% of participants stating they had experienced new
challenges across disputes, investigations, data protection,
governance and compliance, up nearly 20% from the prior year.
- The number of general counsel with some level of concern
relating to emerging data sources rose to 93% from 57% in the prior
year.
“Managing risk is the raison d’etre for any general counsel, and
the data from The General Counsel Report are valuable for gaining
insight on where chief legal officers see the leading risks facing
corporations today,” said David Horrigan, Discovery Counsel and
Legal Education Director at Relativity. “In the U.S., we usually
see anticipation for regulatory risk to increase after a new
presidential administration takes office. Regulatory risk jumping
to the top concern in this off-year — leapfrogging data privacy and
data protection in the process — shows the significant impact
regulations are having on business today.”
Part One of The General Counsel Report 2024 is
available for download here. Subsequent parts of the report will be
released in early 2024.
Demographics and MethodologyIn July and August
2023, Ari Kaplan personally interviewed 60 leaders serving as the
general counsel or chief legal officer of their organizations.
Participants were from across North America, Latin America, Europe,
the Middle East and Australia, and roughly half work in
organizations with more than $500 million in annual revenue.
About FTI ConsultingFTI 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 8,000 employees located in 31
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 $3.03
billion in revenues during fiscal year 2022. 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.
About RelativityRelativity 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. 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. Please contact Relativity at sales@relativity.com or visit
www.relativity.com for more information.
FTI Consulting, Inc. 555 12th Street NW
Washington, DC 20004 +1.202.312.9100
Investor Contact: Mollie
Hawkes+1.617.747.1791mollie.hawkes@fticonsulting.com
Media Contacts: Ashley Allman
+1.206.369.5209ashley.allman@fticonsulting.com
Relativity PRpr@relativity.com
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