KPMG

In-house lawyers’ work is led by commercial decision making, says KPMG survey

A rising level of threats to business and increasing numbers of regulatory requirements are combining to ensure in-house general counsel are no longer dedicated to company legal matters. Instead, a new report from KPMG reveals that in-house lawyers’ work is dominated by commercial decision making as boardrooms seek validation of their business and operational plans.

‘Over the Horizon’, which is based on a series of in-depth interviews with general counsel, reveals that senior in-house lawyers have adopted six new core functional responsibilities in addition to their roles as legal advisers. Chief among these is a focus on cyber security, as concerns rise about the risk of data breaches brought about by human error and intentional sabotage.

Malcolm Marshall, global head of cyber security at KPMG, said: ‘In the last five years, we’ve seen cyber security move from the back room to the boardroom and, in extreme cases, the court room. Against this sort of backdrop, few people will be surprised to see it come in as the fastest-growing risk for general counsel, and that’s why in-house legal teams should have a seat at the table providing advice about the policies and vigilance required to tackle cyber risks for business.’

KPMG’s analysis goes on to reveal that there is also a growing demand for in-house lawyers to conduct due diligence of suppliers, customers and other business parties, as corruption across the supply chain is tackled through increasingly tough legislative and judicial actions.

Some areas of responsibility are also evolving as organisations look to avoid costly disputes. For example, where general counsel involvement once stopped after a contract had been drafted, many in-house lawyers are now gaining greater influence with respect to how relationships are managed, how they are evaluated and whether they are renewed.

David Eastwood, global head of contract compliance at KPMG, said: ‘As general counsel roles become weightier, lawyers have a significant opportunity to become even more indispensable. Companies are becoming more complex and they are facing a more diverse set of risks. As a result, any executive who can master these intricacies while managing the risk will likely see their star rise.’

According to the report, senior executives are turning to their legal teams in recognition that their professional training ensures general counsel can ‘take on complex issues, distil them and arrive at a sensible conclusion’. Many respondents also indicated that their lawyers are more likely to find solutions to common business problems than colleagues in other business departments.

The report suggests that business expertise and numeracy are fast becoming the basic ingredients of successful in-house legal careers and argues that growth of regulatory compliance will mean that lawyers with public service experience will be the ones widely sought after.

‘The problem, of course, is that their stock is rising, but with greater prominence come higher expectations,’ said Eastwood. ‘It means the pressure is on for general counsel to demonstrate a judicious blend of legal and business savvy. They must grasp this opportunity or risk missing out on opportunity to shape the long-term development of their organisations.’

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