GCs Have Full Plate in 2024 With Regulators, Labor, AI, Elections

As legal departments scramble to complete year-end objectives, the holidays are an important time to think about and prepare for the challenges ahead. Let’s take a look at some trends that will likely keep in-house attorneys occupied in the coming year.

Navigating Elections

2024 is an election year, and we’ve seen how the political climate has permeated all aspects of society, including business. Culture wars have business leaders on edge about what issues to speak out on, how to approach diversity and environmental, social, and governance, and even where to do business for fear of alienating customers and employees.

Consumer trust is at the heart of a strong business environment, and that’s not easy to establish and maintain in a society that is both highly connected and divided. I can see a day when an exhausted electorate tires of the current political theater and demands fresh faces and bipartisan solutions to big challenges, but that’s not likely to come in this election cycle.

General counsel need to lead an internal leadership discussion on how to navigate the current political landscape both within the company, and externally.

Rise of Regulators

This past year has seen the rise of regulatory activity and enforcement, and that’s likely to continue in 2024. A recent survey of general counsel revealed that for the first time in the survey’s five-year history, lawyers see regulatory compliance as their top concern for the coming year, and no wonder.

Republicans and Democrats don’t agree on much, but as trust in business has eroded, politicians and regulators see the current environment as an opportunity to challenge how tech has shaped modern society.

The Federal Trade Commission has shown an increased appetite for regulating marketing practices, protecting consumer privacy, and challenging mergers. The Department of Justice’s Antitrust Division has explicitly sounded the call to rein in corporate power by reinvigorating enforcement, and investigations by state attorneys general have become more frequent as well.

US-based companies that do business overseas are increasingly spending more time and money complying with EU laws that regulate consumer privacy, marketing, and—coming soon—AI.

And perhaps most concerning of all to attorneys is the fact that regulators have demonstrated an increased willingness to charge individual executives criminally, as shown in the recent cases involving chief information security officers from Uber and Solarwinds.

How to respond to this resurgence in regulatory activity? I’ve had a lot of success in my career developing good, cooperative, and proactive relationships with regulators, helping them understand my business and demonstrating good faith in developing solutions to their concerns.

But regulators can be motivated by political issues and aren’t always interested in coming to a smart solution—you may have no choice but to fight it out in court.

My advice: The worst time to establish a relationship with a regulator is after they’ve decided to target you. Identify who’s likely to regulate some aspect of your business proactively, and get to know them in a cooperative environment when they don’t have any issues with you—you’ll get a better reception later when a problem arises.

Most importantly, ensure that individual leaders (particularly chief information security officers) work closely with the general counsel to ensure that important decisions around corporate transparency are made as a group, informed by outside counsel.

Labor’s Comeback

Regulators aren’t the only group that’s coming to the business forefront—labor is making a comeback too, triggered by Covid-19 and fears of job loss and a widening disparity in wealth.

The numbers are mixed—unions had some high-profile battles at places such as Starbucks, Amazon, and Trader Joe’s, and overall union membership rose by 273,000 in 2022. But nonunion jobs grew at an even faster pace, and today union membership as a percentage of the workforce still sits at historic lows, near 10%, down from nearly a third in labor’s heyday.

To be sure, there’s tension in the US workforce, but laws make unionization difficult. And legally, your greatest risk may come not from organized labor, but from individual employees empowered by the internet. They may be resentful over a return to the office, angry over pay disparities, or uncomfortable reporting whistleblower concerns through internal channels.

Your best defense is to create an environment where workers feel valued and respected—stakeholders with a voice at the table, not pawns to be exploited. Companies need to recognize there are no secrets and must invest in creating a culture where speaking up internally is truly encouraged.

General counsel need to be the internal face of transparency and trust, speaking out in employee forums about their personal commitment to ensuring complaints are followed up on and investigated. Get educated around the most important issues to employees, and make sure you’re comfortable talking about how the company is addressing them.

Embrace AI With Eyes Wide Open

I know what you’re thinking: a law article about 2024 that hasn’t talked about artificial intelligence. Not to worry, I was just saving it for last.

On the eve of 2024, the specter of AI hangs over legal departments like a double-edged sword. There’s potential to use AI in the legal industry and throughout many companies to do better work, faster. There’s also a minefield of potential problems that need to be navigated in getting to that much heralded place.

You have to explore AI to see what works, or risk falling behind. But do so remembering that you, as the lawyer, are responsible for your work. AI is a tool, but it’s fallible. Its definitive answers can easily lull you into a state of security that can get you in trouble, as lawyers who have used AI to write and file briefs using Chat GPT learned.

When it makes a mistake, you can’t blame AI. And rules around intellectual property, privacy, and client confidentiality still apply—remember that whatever data you enter into many versions of AI products could be used widely.

Make sure you understand how your company is using AI, and think carefully about how traditional laws may be applied to this new world—where there will likely be legal uncertainty for some time.

Rob Chesnut consults on legal and ethical issues and was formerly general counsel and chief ethics officer at Airbnb. He spent more than a decade as a Justice Department prosecutor.

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