ACC Chief Legal Officers Survey Finds Drastic Growth in Legal Operations: Staffing Association of Corporate Counsel Study Also Finds One-Third of CLOs Say Their Companies Have Been Targeted by Regulators

Wednesday, January 27, 2016 - 15:20

–– Corporate law departments are spending more on internal budgets than on law firms or other external legal service providers, and the percentage of general counsel (GCs) stating that their companies have designated legal operations staff has more than doubled, the ACC Chief Legal Officers (CLO) 2016 Survey reports. The study, released today by the Association of Corporate Counsel (ACC), a global legal association representing more than 40,000 in-house lawyers in 85 countries, includes more than 30 benchmarks on the evolving role and priorities of the CLO/GC.

 

The survey of 1,302 GCs/CLOs in 41 countries found that ethics and compliance remains the top concern of law department leaders, with regulatory issues/challenges one percentage point behind. Data breaches were GCs’ third most concerning issue this year, and the percentage of respondents who said their companies had experienced a breach dropped slightly, from 27 percent to 22 percent.

 

CLOs based in EMEA (Europe, Middle East and Africa) and Latin America/the Caribbean had heightened regulatory concerns, as 44 and 41 percent of GCs, respectively, answered that their companies had been targeted by a regulator in the past two years, compared to 31 percent worldwide. Globally, CLOs in companies with large law departments were more likely to report being targeted, with 56 percent of respondents in departments with 50 or more employees saying they have been targeted, versus 29 percent of respondents in departments with fewer than 50 employees.

 

“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,” said Veta T. Richardson, ACC president and CEO.

 

Reversing traditional spending patterns, CLOs reported slightly larger internal budgets – 53 percent of their budgets are devoted to internal spending versus 47 percent for external spending. Complex litigation was the most common work to outsource, and 61 percent of CLOs predicted that the total amount of work they send to outside providers will remain constant in the coming year. Meanwhile, one-in-five GCs who expect a reduction in outsourcing indicate that they will increase the number of in-house lawyers in their department in the year ahead. Thirty-seven percent of CLOs increased in-house staffing levels at their companies in the past 12 months, while the percentage who reported having legal operations staff more than doubled, to 48 percent this year. This explosive growth reflects ACC’s own experience with the special membership division formed for legal operations professionals which has grown by about 52 percent – to almost 400 members from 258 different companies – since last June when division launched its inaugural ACC Legal Ops Conference. This year’s conference, to be held in Chicago on June 23-24, will focus on meeting the growing demand for skill development and collaboration on law department strategic planning, use of technology, and innovation in managing internal and external resources.

 

“We have seen unprecedented growth in the role of law department management professionals this year,” Richardson said. “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.”

 

CLOs in larger law departments were more likely to use alternative fee arrangements (AFAs). Flat fee for an entire matter (41 percent), flat fees for some stages of a matter (40 percent) and retainers (32 percent) were the AFAs law department leaders cited using most often. Across the board, use of AFAs continues to trend upward.

 

Other significant survey findings include:

[if !supportLists]·       [endif]The healthcare industry remained most likely to have experienced a data breach, with 49 percent of GCs/CLOs from the industry answering that their companies have experienced breaches, consistent with last year’s findings and data in the ACC Foundation: The State of Cybersecurity Report, released in December 2015.

[if !supportLists]·       [endif]The education industry witnessed a marked increase in the number of CLOs reporting a data breach; this figure was up 16 percentage points over 2015.

[if !supportLists]·       [endif]One-in-five CLOs created new positions in compliance in 2015, mirroring its spot as the issue most likely to keep GCs up at night.

[if !supportLists]·       [endif]The oil and gas industry led in significant cuts to in-house positions, with 20 percent of oil and gas CLOs reporting significant cuts, compared to 4 percent overall.

[if !supportLists]·       [endif]GCs from Generations X and Y were more likely than baby boomer GCs to seek non-legal skills, especially related to business management.

[if !supportLists]·       [endif]Most CLOs (82 percent) report a level of satisfaction with their current job, with 43 percent saying they have the highest level of job satisfaction.

 

For more information on the ACC CLO 2016 Survey, to purchase a copy of the full survey or to learn more about a customized benchmarking report, please visit http://www.acc.com/closurvey.

 

About ACC: The Association of Corporate Counsel (ACC) is a global legal association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other private-sector organizations through information, education, networking opportunities and advocacy initiatives. With more than 40,000 members in 85 countries, employed by over 10,000 organizations, ACC connects its members to the people and resources necessary for both personal and professional growth. By in-house counsel, for in-house counsel.® For more information, visit www.acc.com and follow ACC on Twitter: @ACCinhouse.