Wait! Before You Go…

Dive Brief:

• Look for hiring to go down while investment in operations to remain a strategic priority, the annual chief legal officer (CLO) survey by the Association of Corporate Counsel (ACC) and Exterro finds.
• Only 38% of CLOs expect to hire lawyers this year, down from 45% last year, and fewer also expect to hire paralegals and privacy specialists, even though privacy is of growing concern.
• “What is significant this year is that fewer CLOs expect staffing increases across all positions,” says the report, based on input from 892 legal chiefs, mostly in the United States.

Dive Insight:

Even with hiring down, fewer CLOs are planning to send more work to outside firms and alternative legal services providers (ALSPs), which suggests the gap will be closed by existing department staff and technology.

“Most [CLOs] are focused on advancing legal operations and cost minimization strategies,” the report says. “These are likely due to pressures of the recessionary environment.”

Contract management remains the most important technology by far for making the department more efficient, with two-thirds of CLOs saying it’s their tech priority, similar to previous years. 

More generic document management and workflow tools are the next highest, but only half as many CLOs make those a priority.  

As important as technology is, fewer CLOs are planning to make big investments in it this year, but that’s likely because many have already bought what they want. 

“We can appreciate a positive trend among those respondents that say they will not adopt new technology in the coming year because they recently upgraded their legal department’s technology capabilities,” the report says. 

In support of that view, 16% of CLOs say they recently implemented new technology compared to 12% last year and 10% the year before that.

Heightened concerns

From a risk standpoint, CLOs are mainly focused on increased regulations specific to their industry, but they also have their eye on broader regulatory risks, mainly connected to data privacy and security.  

Almost 70% say the volume of privacy-related regulatory enforcement will increase, up from 60% last year, and over half say they’ve put in place technology solutions to help them comply. What’s more, some 85% say technology related to data privacy and security compliance is one area where their spending is expected to increase this year.

The survey also saw a 4% jump in the percentage of CLOs who now have data privacy and security in their portfolio. That increases the share of CLOs who oversee it to more than half. 

Mergers and acquisitions is another area that CLOs expect to face more risk, with almost 40% saying they expect their deals to present legal challenges.

“Mergers and acquisitions, and spinoffs, remain the area that most CLOs believe will require the most additional resources,” the report says. 

Access the 2023 ACC Chief Legal Officers Survey findings.

Author: Robert Freedman