Compliance is now the top priority for corporate law departments
Complying with growing global regulatory complexity represents the biggest legal threat to businesses with more than a quarter (28%) of global law departments citing frequency and complexity of regulatory changes as their biggest anticipated risk to the business, according to new research.
The Thomson Reuters Institute 2023 State of the Corporate Law Department report examines the top global compliance concerns and delves into issues across changing securities regulations, geopolitical tensions, anti-money laundering efforts, anti-proliferation regulations, digital economies, data governance and ESG regulation.
The research revealed that globally, compliance is now the top priority for corporate law departments, after ranking as only the fifth-highest priority in 2019. Risk management-litigation protection and cost control remain the next highest priorities.
“Corporate legal departments across the globe are experiencing increased work due to the ever-changing compliance and regulatory burdens with in-house teams experiencing significant burn-out,” said Hillary McNally, general manager, corporate legal, Thomson Reuters. “Additionally, many departments are anticipating the need to closely watch budgets, while at the same time matter volumes are up putting more pressure on internal staff and resources.”
While budgets for a majority of corporate legal departments are flat to decreasing, there are a percentage of companies anticipating a higher legal spend in the coming 12 months. Forty-one percent of corporate law departments expect to see an increase in their legal spend. This suggests that despite ongoing economic uncertainty, law departments are operating under cautious optimism.
“As workloads and uncertainties rise, there is also a greater willingness to shift work to smaller firms with a lower cost and technology can help departments make data-based decisions without compromising outcomes,” said McNally. “Investments in legal content and workflow can also help close the gap for legal departments, create process improvement, enhance collaboration, and attract and retain top talent. This can help departments get up to speed on new areas of law quickly and offload tasks that can be automated, freeing up time for more high-value work, which is critical during times of turbulence.”
The findings are the result of 1,569 interviews conducted with professionals from corporate law departments of companies with more than $1 billion in global revenue. Interviews were conducted throughout 2022.
