Over the past few years, general counsel at corporations across the globe have had to become jacks of all trades due to the rapidly evolving economic and political climate. The resulting cultural and professional shifts have happened so fast we’ve all been left with a bit of whiplash.
At Relativity Fest 2022, we debuted the results of our fourth annual FTI Technology-Relativity General Counsel report, with a panel of heavy hitters discussing the results and what they’re seeing within their own companies.
Moderated by Relativity’s own David Horrigan, we sat down with Ari Kaplan, principal at Ari Kaplan Advisors; Celia Perez, general counsel at FreightCar America; Wendy King, senior managing director at FTI Technology; and Matthew Griffin, general counsel at Lactalis Heritage Dairy.
But before we get too far ahead of ourselves, let’s talk about the methodology used to conduct the survey. Between August 22 – September 2, 2022, we conducted 30 interviews with general counsel and chief legal officers, most of whom have global responsibility. But this wasn’t your typical anonymous online survey; instead, we facilitated in-depth conversations with each participant to truly dig deep into some of the hottest topics facing corporate legal professionals today.
Now that those details are out of the way, let’s jump into the findings!
Data Protection & Privacy Are Top Concerns
So, what kept corporate legal teams up at night in 2022? When asked, “What do you see as the top area of legal risk for business today,” over 70 percent of those surveyed said data protection and data privacy are top of mind.
No one on our panel was surprised by this result, especially Celia who suggested there are lots of external factors at play: “You have an increase in remote workers and rapidly evolving technology, plus changing regulations like GDPR and the CCPA (California Consumer Privacy Act) affecting a corporation’s data collection and retention policies, so I’m not surprised at all.”
As part of FTI’s Technology division, Wendy chimed in as well: “We don’t have many conversations lately that don’t mention data privacy. It would be unusual not to have that as part of your discussion.”
When it comes to data privacy laws, the panel urged attendees (and GCs everywhere) to not just look at where your organization has physical locations, but also where your customers and suppliers are located. With the supply chain shortages, companies have had to quickly pivot to find new vendors and may not have had a chance to think about potential new local regulations or policies they’re now responsible to comply with.
Broadening the Scope of ESG and Diversity
A hot topic facing businesses today is one that has really gained momentum in recent years: ESG (environmental, social, and governance) initiatives. In fact, of those surveyed, 11.8 percent said ESG is the top area of legal risk today (for reference, this number was close to zero a few years ago), and 60 percent said they’re concerned about it as a business imperative.
Right now, there are four different generations in the workforce, all of which look at this issue through a different lens. Younger generations have really started the movement for companies having a purpose outside of generating revenue, and creating an internal culture that focuses on inclusion and diversity. And as Wendy pointed out, “we’re seeing more companies where this [ESG and diversity efforts] is becoming the expectation. But how do you make it go beyond a report, a metric, and initiative to become part of the fabric of your organization?”
While there are some diversity requirements in place for public companies, this can’t just be a checklist item that’s mentioned in the company handbook. Employees and customers want to know you’re “walking the walk,” and they are becoming much more selective about who they choose to work with. Not only is ESG becoming a reputational risk to organizations, but also to those who align themselves with those brands—which impacts their ability to attract and retain employees, as well as customers.
Ari backed up that sentiment, stating that “people choose to look at it as either operational or cultural, when it’s really a mix of both.”
Each company is at a different stage in their journey to define ESG and IDB (inclusion, diversity, and belonging) efforts, but how does something that sounds like such a positive directive translate to legal risk? Matthew observed that in an effort to find a path forward, “there are some aiming for the middle of the pack and to be surrounded by a ‘safe wilderness.’ But for those who are trying to lead, they are taking a risk because they’re putting a lot of resources into that transformation, and they want to be able to tout that work—and doing so entails some degree of risk.”
Future Role of the General Counsel
The role of a general counsel is to identify risk, but with how quickly things are changing, the panel cautioned others not to become the “Chicken Little” of their organizations by flagging everything that might happen. Instead, be ready to really do your research to identify the risk that is most likely to require action on the part of your specific organization.
Both Celia and Wendy echoed this statement by again commenting on how rapidly the role of the GC is changing and evolving. General counsels are now more likely to be looked upon as strategic partners, working collaboratively with other members of the c-suite to identify and solve problems. Because of how valuable and adept these lawyers are, we’ll also likely see a lot more repurposing of legal talent—creating roles like “Chief Legal Officer and Chief Privacy Officer,” or “General Counsel and Head of Cybersecurity,” our panel hypothesized.
Matthew commented on the benefit of embracing AI within the legal departments: “I’ve started to see, with contracts or e-discovery work, for example, that more up-front work can be done by AI. It had been an ogre out there for a while, but it enables lawyers to spend more time on valuable things rather than being a threat to the industry.”
Ari agreed and shared an anecdote from one of his interviews: “In the next five years, the world will look very different with greater automation and legal departments more like business advisors.”
It’s clear from our survey and this panel discussion that general counsel and chief legal officers have had to deal with a lot of additions to their job description. During the early days of the pandemic, legal counsel also became medical and compliance officers, and in the aftermath had to become wellness advisors. While 2022 seemed to focus on GCs being diplomats/global risk advisors, one thing is clear: general counsels and corporate legal teams need to utilize their networks and trade associations to stay abreast of the latest social, political, and economic trends in order to be the best advisors to their businesses, and to be whatever “Head of [insert new responsibility here]” 2023 will bring.
Mindy Deneault is a member of the product marketing team at Relativity.