Survey Illuminates Expanding Role of the CLO and Surging Importance of Cybersecurity
The Association of Corporate Counsel (ACC) 2021 CLO Survey, in partnership with Exterro, the exclusive ACC Alliance Partner for E-Discovery, Data Privacy and Cybersecurity Compliance, shows the ever-increasing role of Chief Legal Officers as key business partners.
In addition, respondents are increasingly assuming responsibility for their company’s privacy function, expanding their legal operations capacity, and (in one department out of three) planning to hire new lawyers. The survey also provides insights to the response of in-house legal departments and insights to future plans in the context of the COVID-19 pandemic.
“The ACC CLO Survey once again provides insights into the ever-increasing depth and breadth of CLOs’ responsibilities and overall importance to organizations,” said Veta T. Richardson, president and CEO of ACC. “2020 accelerated the evolution of this role, forcing CLOs to support their businesses’ operations through a global pandemic, the international reckoning with racial injustice, and both the new socially distant and online workplaces. Sadly, none of 2020’s challenges will magically disappear in 2021, but ACC has seen how the global in-house community learned and grew from those challenges. The integral ways CLOs are helping their organizations adapt and move forward shows that the numerous challenges of the past year have only amplified these times as the ‘age of the CLO.’”
“The 2021 CLO Survey confirms what we see every day in the organizations with whom we work - that converging market forces in legal operations, privacy, compliance and cybersecurity response are driving an evolution of the role of the CLO. The successful CLO going forward will have much broader responsibilities and will require a new strategy to proactively and defensibly manage their legal governance, risk and compliance (GRC) obligations while maintaining and ensuring data integrity throughout their business processes,” said Bobby Balachandran, CEO at Exterro.
The survey also affirms we have clearly entered the “age of the CLO.” With 78% of respondents reporting to the CEO, the overall trend remains very positive. Further, while CLOs still spend around one quarter of their time providing legal advice, they also spend a significant amount of time on board matters and governance issues, contributing to strategy development and advising other executives on non-legal issues. The survey found that 46% of CLOs are responsible for their company’s data privacy function, reflecting the growing integration of legal in business strategy and technology policy. In the order of functions reporting to the CLO, only compliance (74%) outranks privacy. CLOs are also increasingly engaging with environmental, social and governance issues (ESG), including diversity and inclusion (D&I). Almost 73% of CLOs expect D&I specifically to accelerate in 2021.
Encouragingly, even despite COVID-19, 32% of law departments plan to take on more lawyers in 2021, a slight increase over 30% from 2020. Interestingly, 49% of those departments that expect to add lawyers in 2021 also anticipate sending more work to law firms and other legal service providers. Legal operations continues to grow as well. 61% of legal departments now employ at least one legal operations professional. This is a 6.7 percentage point increase over last year and a 39% increase since 2015. 21% of departments now employ at least four legal ops professionals signaling clear and consistent growth in the role.
The survey concludes with five main points:
1. In a continuing trend, the CLO is a key business partner to the C-suite and board. CLOs regularly participate in board meetings, are often asked to provide input on business decisions by leadership teams on operational and risk areas. They only spend 28% of their time on strictly legal work.
2. Many legal departments plan to hire new staff, despite the pandemic - in fact, law departments plan to hire 2% more lawyers in 2021 than in 2020. 20% of departments plan on adding paralegals and 13% expect to hire additional legal ops professionals.
3. Legal operations is now imperative. 61% of legal departments have at least one legal operations professional on staff, the highest percentage observed since ACC began tracking this metric. 38% of CLOs say their department’s most important strategic initiative involves legal operations.
4. Data privacy continues to impact organizations, with 80% expressing concern over changing data privacy laws in the jurisdictions where they do business. 90% expect data privacy concerns to accelerate.
5. ESG and D&I are central to strategy, impacting third-party relationships, supply chain standards, and investor and stakeholder relationships.
Many CLOs are taking new measurable actions, internally and externally, to build equity and inclusion practices into staffing and operations. The survey analyzed data from 947 CLOs across 21 industries and 44 countries. It is available on ACC’s 2021 CLO Survey page at www.acc.com.
The Association of Corporate Counsel (ACC) is a global legal association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other organizations through information, education, networking and advocacy. With more than 45,000 members in 85 countries employed by over 10,000 organizations, ACC connects its members to the people and resources necessary for both personal and professional growth. Learn more at www.acc.com.