Leading Legal Department Trends for 2024

Recent research based on interviews with chief legal officers around the globe, as reported in The General Counsel Report 2024, found that the increased scope and scale of risk now facing corporations is driving change in how legal teams set their strategies, leverage technology and manage operations. Notably, 87% of participants expect risk to increase in the coming year — with regulatory and global compliance challenges  emerging as the number one issue for the first time in the five-year history of the report. In parallel, feelings of preparedness declined in every risk category studied.

There were several areas discussed in the report that stood out as significant indicators of current and impending change. These included the following:

• Regulatory concerns. Regulatory and global compliance worries dominated all other top risk areas for the first time in the five years of the report. Thirty percent noted this was their top risk for the year ahead, and 92% of respondents rated regulatory compliance within their top five risks. In contrast, data privacy dropped to become the second highest overall concern, ranking within the top five risks among 80% of respondents. In additional commentary from chief legal officers, more than half discussed regulatory anxieties, further underscoring the extent to which this category has overtaken other issues.
• The challenge of emerging data sources. The risks surrounding emerging data sources and off-channel communications (e., collaboration tools, chat applications, file shares. and other similar cloud-based systems) have gained increasing mindshare over the past three years of The General Counsel Report, and they jumped substantially this year. Today, 62% of legal department leaders have experienced new issues associated with emerging data within their e-discovery, information governance, and/or compliance efforts (compared to 45% who had in the prior year). In turn, nearly all (93%) have added these issues to the array of concerns that keep them up at night. Thirty percent said they consider it a significant risk area.
• AI as a legal department disruptor. When asked, "How concerned is your organization about new issues around the recent wave of generative AI?," 82% of the study's participants said they have some level of concern. Some are worried about ethics and data privacy issues, while others are generally cautious out of a lack of proof and trust for the tools currently available. Nevertheless, most expressed openness to using the technologies and expected to see meaningful traction in the coming year. AI in e-discovery was one area general counsel seemed ready to embrace (likely due to previous, widespread adoption of machine learning tools within e-discovery workflows), with 80% saying they are comfortable with that use case. More than two-thirds said they were comfortable with the use of AI for compliance monitoring. Still, only a subset (28%) of general counsel reported that they are currently using generative AI for legal functions.
• Wavering confidence in readiness. Among the highest ranked risks — regulatory and privacy — the majority of organizations felt mostly prepared, though less so than what was expressed in previous years. The developing risk categories tell a different story. Half of respondents said they are not prepared at all for generative AI and an additional 43% said they feel minimally prepared. When asked about readiness relating to "advanced technologies," 58% shared that they feel not prepared at all, and one-third feel minimally prepared. Overall, in every category measured in the report, feelings of preparedness dropped, even after a previous trend of increasing confidence.
• A cost paradox. The large majority of chief legal officers (70%) said their legal spending related to their top five risks has changed in the last year. While only 22% said they are increasing their overall legal department budgets, 53% reported increased spending in response to their top five risks. Additionally, more than 75% of respondents also have plans to make new technology investments this year, a more than 20-point increase over the previous year's report.

While general counsel are facing a surge of demand in challenging areas and largely feel they are underprepared to address critical issues, they have not been stagnant. Nearly every respondent in the study demonstrated unique ways that their legal departments are responding with decisive action. Many are embracing innovation and a healthy openness to making broad changes in how they approach and prioritize department responsibilities. This general counsel acceptance of innovation and adoption of technology goes to the heart of the trends that have been developing over the past five years — the general counsel's office is a business center, not merely the "Department of No."