As silly as it may sound, there’s nothing more satisfying to me than reading a report; especially when the report validates the moves our company has been making far in advance. Mitratech has been focused solely on the office of the General Counsel for more than 30 years, and last year we decided to invest in the areas of compliance and risk. As the role of the legal department has continued to expand, we predicted the need to erase traditional barriers between legal processes and regulatory, compliance, and risk management. From my perspective, it makes complete sense that this ecosystem should exist as a way for organizations to proactively mitigate risk from touching them and creating a defensible process in case risk turns into litigation. However, as I attended the ACC Annual Meeting in San Francisco last year, I realized how many organizations were just getting started on their demolition of barriers between legal, risk, and compliance; I had hundreds of GCs and CLOs speaking with me about what they are concerned about, and how we could help. The topic I heard most? Certainly not how to manage their existing matters – they were focused on mitigating risk before a piece of litigation ever enters the department. When I was reading through this report, I could hear the conversations that I had at the ACC Annual Meeting reverberating in my head as well. I’m thrilled that we have solutions that touch every one of the subjects discussed in the ACC Chief Legal Officers 2017 Survey. Here are some of my favorite stats that I thought you might enjoy reading about as well (this may save you from digging through 131 pages of the report).
28% of CLOs were targeted by regulators in the past two years.
Proving that the Legal function has evolved into a more proactive and strategic partner for the business, this percentage is staggering. What surprised me the most was that 77% of respondents reported handling at least one internal or external compliance-related investigation within their department. In the most extreme cases, CLOs have reported 10 or more compliance-related investigations in the past year. Just a matter of years ago, this survey was focused on reducing legal spend and tactics to bring more matters in-house. Now, CLOs are faced with an ever-changing regulatory atmosphere which they must maneuver to mitigate risk before a piece of litigation ever enters their door.
33% of CLOs surveyed made policy changes in their organizations as a result of geopolitical events.
This one should come as no surprise to any of us. Starting with Brexit in 2016, the GDPR has kept organizations on the edge of their seat across the globe. Organizations based in the United States are not exempt from the GDPR; it’s barreling toward us at lightning speed, and those with global operations are already in the middle of shifting their focus to avoid fines. Now that President Trump has taken office, many CLOs in the US have had to adjust insurance policies and initiate plans to enter new markets. It’s interesting that with everything a CLO or GC must worry about (getting more done with less), staying abreast of complex regulatory and policy changes, growing their organizations, and mitigating major risks as they grow is now sitting on their plate as well.
74% of CLOs reported their top issue keeping them up at night: Ethics and Compliance
This number has increased by 3 percentage points this year, and the percentage of CLOs who created new positions in their regulatory affairs role has doubled since last year. “When asked about the evolving role of the CLO, comments center on the increasing use of technology and the growing regulatory environment as part of the natural progression toward CLOs playing a more strategic role at the company level”. The highest-performing legal departments have embraced the use of technology to assist their progression from tactical to strategic; they can begin viewing their organization from a perspective of proactive mitigation of risk rather than a minefield they must learn to step through.
To learn more about the legal and regulatory maturity model bolstered by statistics of your peers, please click through our slideshare, Shift your Legal Operations into High Gear.
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