Sustainability, disruptive technologies, privacy laws, data security and protection of a brand’s reputation are among the elements that expand the influence and prestige of the chief legal officer (CLO) in companies around the world.
This is revealed by the 2019 CLO Survey of the Association of Corporate Counsel (ACC)—the world’s largest international lawyer group, with more than 40,000 members and present in 85 countries—which gathered feedback from 1,639 CLOs in 55 countries.
The number of CLOs reporting directly to the CEO has gone from 64% to 78% in the last year. The jump of 14 points in one year shows how the figure of the chief lawyer is becoming increasingly central and important. CLOs are taking positions of greater power and influence within companies and assume roles that go beyond that of a simple legal technical advisor. Approximately 70% of the interviewed CLOs indicated that the management team almost always asks for their contribution before making business decisions. A percentage that, last year, was narrower by a stunning 11 percent.
“From sustainability to data protection, business-related issues are growing in urgency and complexity,” said Veta T. Richardson, president and CEO of ACC. “The CLO and its legal team are uniquely qualified to give advice to the CEO and to the board of directors on how to trace a path forward, taking into account the law, ethics, culture and risks. We live in the CLO era and companies are realizing the significant role that lawyers can and should play. ”
The report also reveals the issues that preoccupy CLOs these days. Over two-thirds of respondents said that data breaches will be their concern for 2019, followed by regulatory or government actions, and privacy and technological developments. The main issues that will influence corporate business decisions throughout the year will be new regulations, trademark reputation issues, disruptive technologies and mergers and acquisitions.
The study also shows that CEOs are increasingly inclined to deal with CLOs on issues affecting company growth, while boards focus their demands on lawyers on issues like risk and compliance. As for the budget, 45% of CLOs expect that legal spending will increase in 2019. The figure is slightly lower than the 56% recorded in the 2018 survey.
Finally, the survy shows that CLOs are consolidating their position within the C-suite and that they are supervising more and more company functions as well as legal ones. Compliance is the most common example, but beyond this “sister” function, one in four CLOs concerns his or herself with government affairs and one in five heads human resources. Two out of three CLOs regularly attend board meetings (68%).