I wrote at the end of last year about a report from FTI Consulting and Relativity on the ever-widening role of general counsel. I summarised the theme of that report thus:
You would not [when I qualified] have expected to see a report whose title links general counsel with “risk, culture and technology challenges”, with the implication that corporate lawyers are involved in pretty well every aspect of corporate management.
That report was one of three under the broad heading General Counsel Report 2022. The third one has the title Leading with endurance through risk, culture and technology challenges. Like the others, it is based on interviews by Ari Kaplan of Ari Kaplan Advisors with people directly involved in the changing world described in the report. You can find it here.
The report’s opening proposition is that general counsel have shifted from their core responsibilities to becoming “strategic leaders across health and safety, technology adoption, employee development, diversity and other key initiatives” and that this “served as a crash course in endurance training”. David Horrigan, Discovery Counsel and Legal Education Director at Relativity, says that this is “something [GCs] may not have anticipated while studying torts in law school”. He was speaking specifically of the technology aspect, but it applies to all these subjects.
The report has three main headings – the widening landscape of risk management, cultural development and team management, and technology activation. Reports across consecutive years allow us to see what has changed: privacy, data protection, security, and data risk form the largest areas of perceived risk across the years; Covid-19 implications remained much the same; there is a new focus on compliance and regulations, and on technology modernisation.
Taking each part of the report in turn:
The widening risk landscape
A constant theme is that risk preparedness went down between 2021 and 2022. In other words, general counsel feel less well prepared to face risk than they did. In part, this is because the resources are being spread across wider areas. While it is possible that the degree of preparedness claimed in 2021 has resulted in greater comfort in areas which once caused more concern, this is perhaps unlikely. The shift to remote work is one obvious area of heightened risk of which GCs are only too well aware. The report mentions specifically the changes consequent on the arrival of a new administration in Washington and heightened regulatory activity
A growing concern is “ESG” – environmental, social and governance issues. These come up partly because of increased regulatory activity and partly because investors and shareholders are increasingly concerned about it. Closer to home, the kind of issues collected under the ESG label matter for staff retention and for customer loyalty.
Culture development and team management
The pandemic has heightened awareness of the wide role of GCs in the management of the people employed in an organisation. Part of this is hard edged and specific – working from home may have been imposed by COVID-19, but it seems to be here to stay as organisations and their staff discover that productivity, along with well-being, improve with a different relationship with the workplace. There is more to this than the traditional HR function, and GCs are getting increasingly involved in health and people-related issues. People working from home raise security issues, while requiring them to come back into the office raises questions like mandatory masking and vaccination. Such things would once have been compartmentalised under IT or HR respectively. Now the lawyers have to be involved, for themselves as departments as well as for the wider organisation.
People are perhaps realising belatedly how much “work” actually consisted of informal information flows in the corridors. One respondent observed that crisis mode makes it hard to prioritise long-term benefits over short-term needs.
Supporting technology improvements
It is perhaps unsurprising that a report by two technology companies should focus on the importance of technology’s role in the management of the business. 13% of those interviewed said that their involvement in technology buying decisions has increased because technology itself has become more prominent, at the strategic level rather than by attending demonstrations. In part this is a budgetary matter because GCs inevitably get involved in big spending decisions. In part also, there is a greater awareness of how investment and technology can improve the business as a whole, including the GC’s department.
The pandemic itself has been “an accelerator for technology modernisation”, forcing attention on whether existing technology actually does the job it was bought for and on whether people are adequately competent and trained to use it. Previous reports had traced an increase in technology competence, but that dropped significantly for 2022 for reasons which the report describes as “nebulous”. In part this must be because the technology itself, and the range of functions to which it is applied, have moved faster than many users can cope with.
Speaking of artificial intelligence, one GC said “artificial intelligence are buzz words”. Another said that despite dedicating people to the use of AI “it still doesn’t work. It is not there yet, but will get there”. I suspect that unrealistic expectations on the parts of both users and the suppliers feed on each other. Questions like “What problem are you trying to solve?” perhaps get overlooked.
There was a tone of optimism in the previous reports which is somewhat muted for 2022. Distilling what one can from the report and its quotations, it is perhaps the case that dealing with the crisis of pandemic required different skills from the long haul which has followed. I don’t think that anyone in a legal department reckons that things will get easier in 2022.