CLO's corporate responsibilities set to skyrocket in 2022, survey finds
The pandemic and fluctuating business environment 'accelerated unprecedented growth in the CLO’s range of responsibilities' says report by Association of Corporate Counsel and Exterro
Chief legal officers (CLOs) are assuming a broader scope of responsibilities across more functional areas of their business, according to new research.
The 2022 Chief Legal Officers Survey, published by the Association of Corporate Counsel in partnership with Exterro, found that CLOs are being tasked with the oversight of more functional areas of the business in 2022 than in 2020, including ESG (plus 9%), public and corporate affairs (plus 5%), compliance (plus 4%) and risk (plus 4%).
Veta Richardson, ACC president and CEO, said: “For the past several years, we’ve observed the CLO’s role steadily continue to expand in the C-suite and have pronounced these times to be the ‘age of the CLO’. But the disruption of the global pandemic and complexity of other challenges facing today’s businesses have accelerated unprecedented growth in the CLO’s range of responsibilities.”
In order to deal with rising responsibilities and workloads for corporate legal departments, some 45% of respondents said they were planning to hire more lawyers, while 29% said they expect to hire more paralegals, marking a 13-point and nine-point increase from 2021 respectively.
Despite this, 41% of respondents still expect to send more work to law firms this year, the highest percentage observed since 2019 and seven points higher than in 2021, the report said.
The report also highlighted the substantial increase in legal operations investment — around six in ten legal departments have ‘at least one’ dedicated legal operations professional, three times higher than the amount recorded in 2015. A further 70% of respondents said legal operations have risen to the top of their department’s strategic priority lists.
The majority of surveyed CLOs said more attention and resources will need to be devoted to a number of areas in the next year, particularly M&A transactions, cybersecurity, compliance and data privacy as well as ESG issues.
Cybersecurity, compliance and data privacy was cited as the areas which could pose the greatest legal challenges to a business, with more than half of respondents anticipating industry regulations and data protection rules as the biggest causes for legal concern. Many CLOs are also becoming more involved in handling ESG matters as they continue to gain relevance across the corporate world — 24% of respondents said they oversee their business’ ESG function as part of the legal department, compared to just 15% in 2020.
Richardson said: “The unique skill sets and abilities that CLOs bring to the table make them invaluable business partners both strategically and for day-to-day operational issues – ensuring that this ‘age of the CLO’ will continue well into the foreseeable future.”
The 2022 Chief Legal Officers Survey was based on the responses of 861 respondents, representing 20 industries and 38 countries, and companies that range in revenue from under $25m to over $50bn per year.