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Globally fragmented regulations, more data than ever, and expansion into emerging markets—these are just a few of the trends that general counsel en masse are pondering these days, says a new study by the Corporate Executive Board (CEB). The advisory company, which focuses on best practices for chief-level executives, recently made the study “Five Forces That Will Change Legal” available to its members. “There’s always been supply-side and demand-side changes in legal departments,” says CEB senior director Brian Lee. He points to “a gap between how well companies think they’re doing and how important they think [certain] attributes will be in the future.” The research was carried out under the umbrella of CEB’s General Counsel Roundtable, whose membership consists of approximately 550 corporate legal departments’ general counsel, representing some of the biggest companies in the world (Lee is the Roundtable’s research chief). The resulting report was largely based on interviews with more than 100 members and a survey of 70 legal executives, all aimed at uncovering their beliefs on future trends—and what they think it will take for their legal departments to keep pace. The general counsel who participated represent industries ranging from financial services to retail to manufacturing. Lee provided a copy of the report to CorpCounsel.com, and discussed the findings with us. Here’s what the CEB says GCs are thinking about: 1. Regulatory issues will converge, while regulation of issues will fragment. What it means: Common issues—such as data privacy, executive compensation, anti-bribery, and antitrust—are gaining importance in the eyes of regulators the world over, says Lee. But countries and states are regulating those issues in different ways, which makes it more difficult for companies—and in-house legal teams—to harmonize their policies. 2. Information will grow exponentially. What it means: E-discovery requests are getting bigger (think terabytes, not gigabytes) and the quality of meta-data that could be subpoenaed is getting better (like someone’s location, as identified by GPS technology). As more and more information comes into play, the study finds, it “will increase the premium of how companies organize and manage their information.” 3. Dueling demands for corporate transparency and consumer privacy will collide. What it means: Consumer demands for privacy will place more emphasis on data security and how companies shore up their IT infrastructure. “The end result for legal departments is that, at the very least, they’re going to need to become more [technologically] literate,” says Lee. And again, legal teams will also have to deal with a variable set of regulations, depending on where companies operate. While consumers want to protect their own information, they also want to to have more information about corporations, information about executive compensation packages, private conversations between executives, and company investments. 4. The legal department’s center of gravity will shift. What it means: As companies expand into emerging markets to capitalize on growth opportunities, risks will follow. “It’s going to be more important for those risks to be managed locally,” Lee says. The report hypothesizes, then, that in-house legal teams will become more decentralized, decamping from corporate headquarters for local terrain. “Culture is an often-underestimated factor with regard to risk,” Lee adds. Seeing as how different countries identify, report, and react to misconduct in different ways, that will also add to the need for on-site legal teams. Another facet of this shift is that in-house lawyers will take on additional responsibilities—such as auditing and keeping an eye on corporate integrity and employee behavior. 5. The legal services market will mature. What it means: If five to 10 years ago companies wondered which law firm to partner with, today it’s not just traditional firms that are competing for the work, Lee says. Legal- and business-processes outsourcers are “very good for discrete pieces of work,” such as discovery and document review, he says, and that could “rival or surpass the quality of law firms.” How it all adds up. Lee says that, taken together, these points will prompt legal departments to analyze how to align staff talent with changing priorities. While Lee surmises that in-house departments have core legal capabilities and an understanding of non-legal risk down pat, they’ll have to work on operational capabilities—like tech innovation and records administration—along with talent management “in order for them to be as good as they want to be.”

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