Survey Says . . . Vital insight into the fast-moving retail sector according to elite corporate counsel from around the world

Thursday, October 29, 2015 - 12:33

Acritas’ Sharplegal data reveals how general counsel within the retail sector* face unique pressures when managing the legal affairs of their businesses.

International Legal Advice

Sixty-three percent of retail organizations have a need for international legal advice, up from 54 percent in 2011. This high rate of international dealings comes with a host of challenges for GCs and their legal departments.

Industry Challenges in Retail

While peers in other industries are more heavily burdened by the regulatory weight of their industries, general counsel in retail have a broader set of challenges, with 22 percent citing competition as their main challenge. The increasingly competitive environment is driving the need for innovation from retail businesses. As one general counsel in Massachusetts told us, “Continuing to be a leader within the field is a critical element for us, and in order to do that we need to continue to innovate and stay ahead of our competitors. And in order to do that we need to continue to innovate and stay ahead of our competitors in designing and bringing into the marketplace products that people love.”

The need for innovation and the prevalence of online activity is transforming the way retailers go to market and the associated responsibilities of their legal counsel. “Thinking about legal issues,” one respondent said, “it is privacy and security of information, and talking about the grocery business, I would say it is the disruption because of ever-changing business models that are now more Internet-based.” In today’s marketplace, retailers have to rapidly respond and adapt to the currents of change driven by technology and trending consumer patterns, resulting in a new set of required legal skills in consumer data protection, which is becoming an essential part of doing business for any company and presents high risk to retailers whose consumer brand is a significant asset, as we have seen in recent major breach cases. Another senior counsel explained: “It’s just the rapidity in which new technologies come onboard. Customers and consumers adopt new things, Apple releases a new whatever, a new piece of hardware, all of those can be game changers pretty quickly, particularly in the area of privacy, e-commerce or, you know, any of these customer communications.”

The transformative nature of technology in the retail business was particularly evident in the case of one UK-based online fashion retailer, whose general counsel explained that so much of the business and legal function’s activity is about their online platform and technology that they no longer identify as a retail business as much as a technology business.

While competition is the top challenge for retail companies, our research also confirmed that almost as many are under the pressure of regulation compliance in the industry. In fact, 20 percent of senior corporate counsel in retail organizations, interviewed as part of Acritas’ 2014 Sharplegal survey, mentioned the increasing and changing rules and regulations as the biggest industry challenge facing their business. Explaining their challenge, one U.S.-based GC referred to a “constantly changing regulatory environment,” adding “it impacts on the ability for my company to comply with regulations.”

Regardless of all these challenges, legal departments remain under pressure to deliver more cost-efficient legal support and protection to their organization.

The Quest for Value Continues

Throughout the year we have been working hard to uncover what senior corporate counsel are really looking for when they refer to better value. Of those interviewed within the retail sector, 41 percent told us that they are looking to reduce overall spending by driving greater efficiency in the delivery of legal support to their organization. A further 30 percent are looking to their law firms to provide more price certainty, through more transparent fees and fixed terms.

Add Your Voice

What are your views on the future of legal service delivery and how it should change? If you have yet to voice your opinions through Acritas’ Sharplegal study in 2015 and would be interested in being interviewed, or would like a fully detailed spend report on the retail sector (generated from data provided by your peers), please contact Deidre Roddy at droddy@acritas.com or go to acritas.com/takepartinsharplegal2015. It only takes 15 minutes to add your voice!

* Interviews were conducted with 129 corporate counsel in organizations with revenues of $1 billion and above in the retail sector who took part in Acritas’ Sharplegal survey in 2014. Acritas interviews over 2,400 senior corporate counsel across 50 countries every year for Sharplegal, the world’s most comprehensive annual study of the global legal market.

 

Lizzy Duffy is vice president at Acritas. She can be reached at eduffy@acritas.