The role of the general counsel has changed significantly in the last three years, and more change is underway. As chief legal officers have become more squarely established as strategic business leaders, they have also taken on more responsibility and a wider field of issues for which they act as key decision makers. While this change is beneficial to reducing corporate risk and improving organisational efficiencies, it has also caused legal departments to feel more strains on resources than ever before.
FTI Technology and Relativity’s 2023 edition of The General Counsel Report examined these realities at length and were discussed with industry experts during Relativity Fest in London. Looking at the report’s findings against the backdrop of current trends and regulatory activity in EMEIA provides interesting insights to understand the state of corporate legal departments better today and forecast what the key issues are likely to be in 2024.
The top persistent trends and emerging issues for general counsel in the U.K. and across Europe include:
- Data privacy and data protection continue to dominate corporate concerns. Between the risks surrounding data breaches and data privacy compliance, the general counsel plays and will continue to play an instrumental role in guiding the corporate strategy for safeguarding sensitive and personal information. In some instances, this may result in the information security function becoming part of the general counsel’s remit so that risk factors are continually addressed, particularly when security and IT teams are under extreme demand.
- Regulatory compliance, particularly around market abuses, antitrust, supply chain and governance, will become an even more impactful factor across risk and legal department resources in the year ahead.
- Artificial intelligence will likely become the top risk driver. The 2023 survey was conducted before ChatGPT and generative AI exploded onto the scene, so reported concerns about certain aspects of AI were relatively low and not wholly representative of our current state. This is an area moving exceptionally fast, and potential risks are extensive. We expect this to be a primary risk concern for general counsel in the year ahead, especially in jurisdictions like the U.K. and the EU, where AI legislation is imminent.
- The growing scope, scale and complexity of digital risk will spur a more holistic approach to resilience, where issues are addressed together to ensure risk mitigation across all aspects of data, not only privacy and security.
- The issue of data quality, which to date has largely been limited to data scientists and information governance professionals, will be another item gaining space on the general counsel’s agenda. As advanced AI becomes more widely adopted within corporations, their legal departments will be responsible for evaluating issues such as ethics, bias, accuracy and reliability, which are directly impacted by data quality.
- The value of specialised expertise is rising and paying dividends, especially in complex, data-driven areas. Legal leaders are taking greater care in how they spend their budgets, and at the same time, for complex matters and high-risk scenarios, they highly prize partners who bring domain expertise and the ability to scale to the problem at hand. This is expected to be an ongoing and growing trend in the next iteration of the general counsel report.
- Organisations’ preparedness fluctuates depending on the risk area and numerous external factors, such as new data protection regulations or the rise in regulatory investigations. A key issue around general risk preparedness is that many organisations have a degree of false confidence about how prepared they are or have a culture that isn’t amenable to acknowledging the dangers of unknown unknowns. As risks and demands continue to escalate, general counsel should look with critical eyes at their organisation’s preparedness and awareness around key issues such as data privacy, emerging data sources, regulatory compliance and generative AI. This will ensure proper guardrails are in place so the organisation can take advantage of technological advancement without diluting risk awareness and readiness.
- Legal departments are only scratching the surface of their environmental, social and governance risks and obligations. There is a lot of work to do in terms of meeting standards across all three pillars of ESG, and this is expected to be a significant focus in the coming years, particularly among organizations in the U.K. and Europe, where requirements, and the growing tapestry of legislation, are more complex than in jurisdictions like the U.S.
As the next edition of the general counsel report will expand to include more international respondents, an insight expected to surface is the cultural differences that impact legal departments in different parts of the world. Across multi-national organisations, legal departments will need to balance the impact of those trends in each jurisdiction while establishing a consistent global approach to their over-arching risks.
The latest General Counsel Report is available here for further insights about issues happening now, and the findings of the next edition will be released later this year and into early 2024. Experts from FTI Technology and Relativity will join a session with general counsel at Relativity Fest U.S. on 28 September to share a preview of the findings from The 2024 General Counsel Report.
Also, Richard Palmer and Mike Walters, Senior Managing Directors within FTI Consulting, will be speaking about key challenges for modern general counsel during the Financial Times Innovative Lawyers Summit in London on 20 September.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.