GCs will look to find ways to live with, and thrive in, a complex international environment.
Are general counsel pinning their hopes on the UK government’s alleged assault on red tape to free the full potential of the business they serve? Without wishing to make ministers and staff at the Cabinet Office sad, I’m afraid the answer is no.
As the latest research from Association of Corporate Counsel makes clear, across the 41 countries covered by its study, the demands of regulation and compliance are rising – in places presenting international businesses with conflicting demands in different jurisdictions.
As the Cabinet Office can’t really fix that for them, the challenge for this group is therefore mostly not to find piecemeal opportunities to ‘reduce’ pages of regulation and guidance. Instead what GCs will look to do is to find ways to live with, and thrive in, this complex environment.
It’s evident they can’t achieve zero risk on this front – so it all comes down to risk management.
Now, seeing which way the wind is blowing, private practice would love to be positioned to help with ‘risk management’. They are in on the act a bit – advising on regulatory regimes by country, and where problems are suspected, conducting independent investigations.
But overall my reading of the high priority accorded by respondents to compliance is that it goes some way to explaining the increase in in-house legal budgets – at 3.1% well over twice the increase on external spend, which languishes at 1.3%. The message is this – only greater in-house resource can properly manage risks of the sort keeping GCs awake at night.
The study also concluded – a sustained theme across any number of pieces of research – that higher-value strategic work was increasingly kept in-house.
As legal budgets recover and increase to meet the need for better risk coverage, law firms will be asking what will, and what will not, come back to them as economies grow and company balance sheets recover. The answer to such questions probably won’t be cause for celebration in private practice.
Eduardo Reyes is Gazette features editor