Clyde & Co recently released their annual Looking Glass Report, and this year, the focus was on the evolving role of General Counsel. “The annual Looking Glass report investigates trends and developments that impact senior legal leaders, both in-house and in private practice,” making it the go-to resource for updates on trends impacting the way companies, and specifically legal departments, do business.
Here are a few of our key takeaways, specifically related to contract analysis.
#1 Risk is changing
As globalization increases, the corporate approach to managing risk must evolve with it. Although this may not have been under the purview of General Counsel in the past, the role is rapidly expanding. Now, political and technological risks are at the top of the list, but less than 30% of GCs feel prepared for high impact risk.
As automation becomes more common, ethics are coming into question. For GCs, getting ahead of the risks that emerging technologies present will be vital. In fact, 91% of GCs surveyed in the report agreed that “the risk map is more complex than 2-3 years ago.” While there are many factors, the rapidly evolving technology landscape is among the top concerns. With each new technology that’s introduced to the workplace, GCs must assess the risk and plan accordingly.
#2 Responsibility for General Counsel is changing
In the past, the role of General Counsel was strictly legal, but today’s legal teams handle compliance, risk and more. The report states that these increased responsibilities include “financial crime, data protection, risk, internal audit and company secretariat functions.” As a result, 89% of GCs surveyed believe that their roles are important in identifying and managing risk.
While most larger organizations have separate legal, compliance and risk departments, the fading barriers between the teams are evidence of a shift in organizational priorities.
#3 AI is the future, but still misunderstood
According to the report, the “two highest impact technologies, data analytics and AI, are not sufficiently understood. While many feel confident in using AI for document review, only 31% of GCs feel that they have an understanding of the applications of AI. The reason for this low percentage may be the general slow adoption of new technologies across the legal fields, but 55% of GCs also stated that “difficulty getting budget” is a major challenge when trying to incorporate new technology.
Ultimately, GCs understand the importance of modernizing processes with technology, but concerns surrounding crisis management slows adoption. According to Lee Bacon, Partner at Clyde & Co., “To maximize returns from investment in new technology, amid limited budget, a balance needs to be struck between identifying tools which will assist in establishing a coherent strategic vision, and more pragmatic tools relevant to the day-to-day demands of the business. A good understanding of the legal technology market will assist both.”
What these observations mean for contract analytics
We wholeheartedly agree that data analytics and AI are changing the legal landscape. With platforms like LinkSquares, that utilize the combination of these two technologies, GCs can automate tedious processes without sacrificing reliability and accuracy. Contract analysis contributes to risk mitigation by allowing companies to be aware of the terms executed within each agreement without manual organization.
When it comes to managing the vast amount of contracts within an organization, proactive analytics can streamline the process, allowing for more time to handle other legal tasks. For example, when regulations like GDPR and the upcoming California Consumer Privacy Act go into effect, organizations will need to fully understand the terms surrounding customer data usage within their contracts. An AI-based contract analytics tool like LinkSquares can make the process easier for GCs to manage, especially considering the growing list of responsibilities that General Counsels face.