What are the salient concerns of in-house lawyers? Their two chief concerns are uncertainty, and regulatory compliance and enforcement — according to an authoritative 2013 Grant Thornton survey.
“The results of this survey indicate that regulatory concerns dominate the attention of in-house legal counsel,” said Brad Preber, national managing partner of Grant Thornton’s Forensic and Valuation Services (FVS) practice.
“This is particularly surprising when you see that in-house counsel believe regulation is a bigger threat to growth than competitors or sales to customers,” he added in commenting his firm’s “Survey of Current Organizational Threats and the Role of the In-House Law Department.”
Grant Thornton’s survey queried in-house attorneys on 45 different regulatory threats, but only three of them were named by at least 15 percent of the respondents.
The three issues:
1. Labor law violations
2. The Foreign Corrupt Practices Act
3. Environmental issues
Cross-section of respondents
Grant Thornton’s survey was conducted with approximately 243 in-house counsels at public and private companies with a wide range of revenues from across the United States.
Respondents were distributed relatively evenly across industry sectors, including manufacturing, distribution, banking and securities, energy, healthcare, technology, life sciences, retail, construction, real estate and not-for-profit.
For organizational growth, the attorneys’ top three responses generated at least 25 percent:
- Economic uncertainty – 57 percent
- Regulatory compliance and enforcement – 53 percent
- Global or domestic competition – 36 percent
Perhaps surprisingly, the Grant Thornton survey didn’t reveal litigation, as well as fraud and corruption among the top concerns.
However, the in-house lawyers are expressed concerns about litigation named their salient litigation concerns:
The issue identified as “regulatory,” was named by47 percent. Also selected by 30 percent or more were “contractual,” “intellectual property,” and “labor and employment.”
Regarding the amount of corporate resources spent on regulatory compliance and enforcement, Grant Thornton’s press release stated there was a large gap between the perceived significance of the threat (53 percent) and the resources spent to address it (38 percent).
This disparity widened significantly for regulatory-related litigation. Forty-seven percent of respondents said regulatory issues are a top litigation threat, but only 10 percent indicated that the majority of the resources provided by their organizations were spent on this threat.
“This may mean that organizational resource allocations are misaligned, considering the magnitude of regulatory threat,” added Mr. Preber. “Alternatively, it could indicate that regulatory litigation costs have not yet reached the levels of more traditional problem areas for in-house counsel.”
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“Without the element of uncertainty, the bringing off of even, the greatest business triumph would be dull, routine, and eminently unsatisfying.”
-J. Paul Getty