What does the modern general counsel worry about? Modern problems, of course, like data security and the impact of social media. According to the Consero 2014 General Counsel Data Survey, nearly half of all general counsel feel that their company is not ready for a cyber security breach, while other legal departments are wrestling with writing a social media policy that adequately mitigates legal risk. While technology issues topped the list of general counsel's concerns in 2014, budgetary issues, other strapped resources, and complex regulatory changes also weigh heavy on the GC's mind. Corporate Counsel Connect spoke with Paul Mandell, CEO of Consero, on some of the findings of their survey.
Obviously the large and extremely public data breaches of the past year have left most senior executives feeling vulnerable. According to the survey, 49% of GCs felt that their company is not adequately prepared to defend against a data breach – up from 2013 when just 23% of GCs held that sentiment. "Today's general counsel are more attuned to cyber risk than ever before," states Paul. Consero Group hosts roundtables and other networking events focused on senior executives, which gives the company unique insights into concerns of multiple top organizational leaders. In the surveys from other senior executives, Paul discovered consistent findings of a lack of confidence in data security infrastructure. "Given the impact of a potential breach, this seems to be an area that requires more attention from today's large companies," shares Paul.
Given a unique perspective of seeing multiple top executives and how they could work together, Paul offers some advice for organizations with regards to data security. "The most common first step in tackling cyber risk is to identify and leverage partners who can offer the substance expertise to provide IT and security assistance, including both internal and external colleagues. With the right team, GCs can perform a liability audit to identify potential risks of different varieties and levels of severity. And following that exercise, GCs can collaborate with IT to develop, execute, and test a new security plan designed to keep cyber threats at bay," advises Paul.
"I was most surprised by the fact that a significant percentage of the respondents do not have a social media policy," shares Paul. Twenty percent of GCs felt their social media policy would not effectively mitigate legal risks, and a full 16% did not have a policy. These numbers are increasingly surprising given that 81% of the 2013 respondents were satisfied with their company's social media policy.
As in past years, legal departments continue to wrestle with doing more with less. Half of respondents report having the same or a smaller budget, and 56% state that their staff size has stayed the same or decreased over the past year. Only 54% of GCs surveyed felt they had sufficient access to resources to manage their department, a fairly grim number. "We also see similar struggles among other senior executives to do more work with less resources," states Paul. "However, the workload for today's GC seems to be increasing at a faster pace than that of their peers in other functions, making the struggle for resources particularly urgent."
GCs are working to manage the shortage of resources particularly in respect to outside counsel. Just 60% of GCs feel that they are receiving sufficient value relative to their outside counsel spend, and the majority (84%) have opted not to assign more legal work to outside counsel over the past year. More than half of GCs' organizations are using alternative-fee arrangements, generally for routine legal work, such as contract management of standardized IP work. Comments Paul, "The good news for outside counsel is that the interest in and quantity of AFA use seems to be more a function of the being resource-strapped rather than a result of dissatisfaction with their law firms."
Also among the greatest concerns for the GCs surveyed are regulatory compliance, labor and employment, litigation, and data privacy. Paul adds, "These topics seem to be occupying an outsized share of the time and attention of today's GCs, and that seems unlikely to change over the next year."
Looking at the current legal landscape, Paul predicts "increasing budgets to tackle a global regulatory landscape that continues to become more complex. We also expect a continuing increase in litigation, requiring greater investment in in-house and outside counsel resources." Primarily, given this year's major concerns, Paul sees more investment in cyber security coming soon.
The General Counsel Data Survey was distributed in connection with an invitation-only forum involving general counsel from Fortune 1000 companies. The survey was originally developed to benchmark the data from the yearly forum. Consero has performed the General Counsel Data Survey for three years, and it conducts similar surveys for Chief Compliance Officers, Chief Litigation Officers, and Chief IP Officers, among others.
Paul Mandell is the CEO of Consero, a company designed to deliver a unique event experience that has more of the elements that deliver substantive value to the attendees and less of the fluff. Senior executives leave with a series of practical takeaways—from new dashboards for department management to specific strategies, as well as valuable networking with similarly situated peers and vetted solution providers with industry expertise. Peers share what does and does not work and work together to develop answers to new challenges.