It's No Surprise: It's All About Value
ACC’s 2011 Chief Legal Officer Survey was unveiled at this year’s Annual Meeting in Denver. The annual survey and the resulting AM CLO session offered important insights for in-house counsel. I can’t tell you, though, that I was surprised by the results or discussions that followed. They included:
- CLOs are concerned with regulatory issues that put them on the front line for potential liability, but are more concerned with protecting the company by knowing all activities that could have legal implications;
- While they are typically happy with their chosen profession, they are affected by having to do more with less; and
- They want to see the value in their outside counsel relationships and improve communication there, as well as within their own legal departments.
These issues are at the core of what in-house counsel grapple with on a day-to-day basis. The findings of the survey make perfect sense to me, and here’s why:
The increasingly important and changing role of the CLO
As in-housel counsel, one of our main goals (if not the goal) is to protect the company we work for from harm. Risk management is a crucial part of our day-to-day activities, and CLOs are on the front line — expected to offer solutions as problems arise, and ensure solutions are easily accessible and compliant with ever-changing regulations and laws. We can also be held personally responsible when something goes legally amiss. There was a time when the attorneys in the company didn’t have to worry about being prosecuted for the “crimes” of their employer. All you have to do is turn on the television to know those days are over. As I said during our CLO panel at the Annual Meeting, general counsel are considered key players in government investigations, and are therefore prime targets. While not programmed to shrink from a challenge, almost a third (31 percent) of the respondents said that this increased scrutiny is actually affecting their next career move.
Up to the challenge and satisfied
Yes, CLOs are expected to do more with less, while under more scrutiny from the SEC than ever. And yes, these facts can be challenging, but in-house counsel are entrusted with finding solutions. In fact, we thrive in this role. The survey shows that 92 percent of CLOs generally like their jobs. Well, I didn’t need a survey to tell me that, having met and reconnected with many of you in October at the ACC Annual Meeting. I overwhelmingly heard your testimonials that you are engaged and enjoy what you do..
The economy and staffing
The survey found that fewer CLOs are feeling the effects of the economic downturn (54 percent) in 2010 than in 2009, when 74 percent reported the same. Those who are feeling this crunch are decreasing staff and increasing their work for outside firms at a higher percentage than in 2009. However, despite a challenging economy, many CLOs are planning to increase staff. According to the survey, 37 percent plan to bring on new hires in the coming year. While some organizations and firms, for that matter, are cutting staff, in-house counsel are adding to their own. This, of course, has something to do with the increasing responsibility of the legal department: Three-quarters of your departments have experienced an increased workload.
Fee structures and working with outside counsel
Working with outside counsel, and getting value from those relationships, is always a key concern for CLOs. Most CLOs are currently using hourly-based fees, and 45 percent of them experienced an “increase in hourly rates charged in 2010.” However, a growing number of CLOs (63 percent, according to the survey) have implemented a form of value-based fee arrangements, with 77 percent seeing an “increase in value of work performed by outside counsel.” This is encouraging news, but there is always room for improvement, as 59 percent of those surveyed would like to see more focus on improving matter and budget management. Again, it all comes back to value.
I could go on and on about other tidbits from the survey of ACC members. For example, CLOs in the United States have increased by 5 percent in the past three years, but the growth of those located in other countries has increased by 20 percent. Similarly, ACC’s international reach as an organization is growing, as is the presence of the international in-house counsel and law department. Please view the entire CLO survey, as well as those from previous years, at www.acc.com/community/clo/surveys.cfm.
You’ve made it clear that CLOs want to add value to their organizations and legal departments by managing the risks and supporting the business objectives. CLOs are seeking value from the outside counsel they employ. And they are seeking personal value in their career choices.
It’s all about value.
