Companies are leaning on general counsel and chief legal officers more than ever in an effort to stay ahead of myriad boardroom challenges, according to an Association of Corporate Counsel analysis.
The report released Tuesday by the ACC describes an “age of the CLO” blooming within corporate boardrooms as 80.2 percent of in-house legal chiefs surveyed said they report to their CEO, up from 77.9% in 2019 and 64.4% in 2018. That increase reflects how business leaders are increasingly keen on soliciting input from their top legal advisers.
“The CLO’s position as a major business strategist is universally accepted,” said ACC president and CEO Veta Richardson in a statement. “Three quarters of C-suites consistently look to their CLO on matters of risk and strategy, and with compliance and technology issues becoming increasingly complex, we expect to see their number continue to rise.”
The findings in the ACC’s 56-page report, known as its annual Chief Legal Officers Survey, are based on responses from 1,007 in-house legal chiefs from 20 industries in 47 countries.
Other key finds from the report include:
- Respondents were almost evenly split when it came to whether they have a direct reporting line to a company’s board, with 53.2% answering in the affirmative and 46.8% telling the ACC they did not. The ACC said that 76.2% of respondents almost always attended their employer’s board meetings, which while an increase over previous years, still has room for improvement.
- The ACC found that 57.3% of respondents also held the title of company or corporate secretary, while 37.9% did not, with 4.9% having the position report directly to them.
- For the one out of five law department leaders surveyed by the ACC who do not report to their CEO, 49.5% said they instead reported to the chief financial officer, followed by the chief operating officer (17.5%), chief legal officer of a holding or parent company (11.5%), chief administrative officer (10.5%), and board of directors (4%).
- A little over one-third of law department leaders told the ACC they expected to send more work to law firms this year, roughly on par with previous years, as almost 20% of all respondents said they would send more work to alternative legal service providers.
- In a sharp departure from five years ago, the ACC found that 53.8% of respondents now employ at least one legal operations professional, up from 21.2% in 2015. The ACC noted the average number of legal operations employees has trebled—from 1.8 to 5.9—since 2017. Of those respondents recently surveyed, 10% said they intend to expand their legal operations team in 2020.
- The top five non-legal skills in demand by in-house legal chiefs are leadership (61.7%), business management (47%), executive presence (45.3%), communication and listening skills (45.2%), project management (42.1%), and emotional intelligence (41.5%).
- Digitalization and technology (29%) was the top strategic initiative facing law department leaders, followed by risk and compliance (19%), business integration (18%), reducing spend and increasing efficiencies (14%), legal operations (9%), and benchmarking and data analysis (6%).
- Data privacy and protection (21.7%) was the top area where the ACC found law department’s looking to provide with additional resources, followed by significant transactions, such as M&A and spin-offs (19.5%), compliance issues (16.1%), regulatory issues (13.3%), and litigation matters (13.1%).