The 2022 Chief Legal Officers survey conducted by the Association of Corporate Counsel (ACC) found significant transactions, business-critical and environmental, social and governance (ESG) issues are the key focuses for in-house counsel.
Analysing data from 861 CLOs across 20 industries and 38 countries, the report released in January explained that chief legal officers (CLOs) devote more legal resources towards significant transactions, addressing the business-critical areas of cybersecurity, compliance, and data privacy, and continuing to guide their organisations on ESG-related issues.
“ESG issues are forcing many companies to improve their compliance efforts to satisfy environmental regulations and the increasingly sharp focus by investors and customers on the organisation’s approach to ESG and corporate social responsibility,” Tanya Khan, vice president and managing director, Australia and Asia-Pacific at the ACC in Melbourne, told Asia Business Law Journal.
The latest annual survey also found that the biggest legal challenges for CLOs this year are expected to be caused by industry regulations (66%), data protection rules (55%), and M&A issues (39%).
Citing the survey, Khan said that the past two years had seen the unprecedented growth in the CLO role, responsibility and influence, where CLOs have taken on more direct oversight of business functions.
In Asia and around the world, the vast majority of CLOs (80%) now report directly to the CEO. The survey also found that 77% of the respondents attended board meetings, and 63% were consulted by other executives on key decisions. These were a moderate increase from previous years.
“We are witnessing an unprecedented growth of the role, responsibilities and influence of the CLO across the organisation, accelerated by the business disruption caused by covid-19, social unrest and the complexities of the challenges facing today’s businesses,” said Khan.
“Today, only half of a CLO’s job is providing legal advice and managing the legal department,” she added. “The other half is spent on higher-level corporate strategy, and this percentage is even higher for CLOs in larger, more complex departments.”
To increase the capacity and capability of their legal departments, the research found that CLOs are investing in legal technology (55%), especially contract management software, hiring more lawyers (40%), sending work to outside firms (41%) and continuing to increase investment in legal operations.
The survey was conducted in partnership with Exterro, an exclusive ACC alliance partner for e-discovery, data privacy, and cybersecurity.