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The Legal Function Reimagined: A

Closer Look At The ACC 2020 Chief
Legal Officers Survey
MARK A. COHEN FEBRUARY 10, 2020

Businessman and businesswoman exploring the future using telescope

e Association of Corporate Counsel recently released the  edition of

its Chief Legal Officers Survey (CLO Survey). It is chock full of data that
confirms the changing role of the Chief Legal officer, corporate legal
departments, and, by extension, the entire legal supply chain. e Survey
results are a barometric reading of focus areas, changing dynamics, and
expanding enterprise expectations of the legal function. CLO’s are its
bellwethers. e expansion of their role and influence—and the “ultra-legal”
skills required—foreshadow changing expectations of all lawyers and allied
legal professionals.

e ACC Survey confirms that legal expertise is now table stakes for CLO’s.
It must be accompanied by other skills—notably business acumen and
leadership. Additional competencies include utilizing technology to drive
efficiency and enhance customer value, data analytics, holistic problem
solving, management, emotional intelligence, and creativity. e CLO may
be the top legal officer, but the role now transcends traditional legal
boundaries and is inextricably fused with the enterprise. e legal team is no
longer a self-contained department that operates by its own metrics-or lack
thereof, speed, and operating standards. Legal’s legacy hall pass for fiscal
accountability, use of data, and other standard business norms has been
revoked. e legal function is being transformed from a budget drag to a
value enhancer.

CLO’s Are In e Vanguard Of A Reimagined Legal Function

e legal function is being reimagined— not so much by CLO’s as the C-

Suite. e expectation—and mandate—is that the legal function must not
only proactively defend the enterprise but also collaborate with business to
create enterprise value by better serving its customers. “Customer-centricity”
is not a buzzword; it is a paradigmatic shift in mission, culture, and delivery
designed to align providers with customers, improve the customer
experience, demonstrate value, and establish a “sticky,” long-term
relationship. Customer-centricity is a process that is at the core of digital
transformation. It is not declared but achieved over time by sustained client
value, adaptation to changing customer needs, and outstanding delivery.
CLO’s are law’s astronauts. ey are the first to explore the new frontiers of
the legal function, paving the way for others to expand existing
professional/industry boundaries. eir mission is to advance enterprise
goals and objectives. As professionals, they must adhere to ethical principles
and operate within legal bounds. As business collaborators/partners, they
must evaluate legal exposure with other risk factors. eir recommendations
must be data-driven and holistic, balancing enterprise risk tolerance with
reward. is is a different calculus than traditional legal risk assessment
where risk is viewed through the narrow prism of legal training and its
cardinal rule of mistake avoidance.

CLO’s understand that legal risk is not in the forefront of risks from the C-
Suite’s perspective. e ACC Survey reveals that legal risk receives far less
management support—., as a risk category— than business, .,
and financial risk, . . is is not to suggest that legal risk is trivial. But
the data confirms that keeping the business humming and proactive
financial risk avoidance—not legal risk—is what keeps the C-Suite up at
night. e legal team must align its risk prioritization with those concerns.
is is part of a larger process of realigning the legal function with the
enterprise and its customers. Legal must widen its lens to capture the
business landscape from the customer perspective, not its own narrower one.

e legal function is becoming as much about partnering with consumers as

it is about legal counseling. It is about creating value and aligning with the
customer, not simply managing a legal portfolio and balancing a budget. It
is about integrating the practice of law with the business of delivering legal
services and leveraging that by collaborating with business to drive
enterprise value. is is a paradigmatic shift for the legal industry, one that
has profound implications for hiring criteria, diversity, legal education,
training, and career development. It requires a cultural shift that is
underway in-house and will soon extend to the broader legal ecosystem.
is is law in the digital age where data is the new oil and customer
satisfaction is paramount. e CLO is the conductor tasked with
orchestrating this new composition.

Chief Legal Officers operate at the intersection of law, business, and digital
transformation. In the span of twenty years, the role has morphed from the
practice-centric oversight of legal work—most of which was sourced to law
firms—to proactive enterprise defender, early risk detector/mitigator; supply
chain manager; and business collaborator/enterprise value driver. is is not
what most lawyers—even leaders of large in-house departments— were
trained for.

Upskilling has become a constant of the CLO position and, as the ACC
Survey reveals, a departmental focus for the majority of CLO’s. So too must
the CLO create an agile workforce—in-house/sourced/hybrid— that can
anticipate and respond to new risks, many of which result from the Warp-
speed advances in technology. It’s not surprising that the  Survey listed
data privacy and cybersecurity—together with compliance—as the top
corporate organizational focus areas according to CLO’s.

Technology provides enormous opportunity to drive efficiency; detect,

calibrate, and mitigate risk; automate; create self-help tools, and a legion of
other benefits. CLO’s must capture those opportunities. At the same time,
they must proactively manage new threats emanating from the
unanticipated (mis)use of technology. is does not require CLO’s to be
technologists, but it does demand that they anticipate and respond to its
impact on corporate advancement and risk. Technology underscores the
dual role of the CLO. Ben Heineman, Jr., an in-house pioneer who helped
redefine the GC role at General Electric, remarked that GC’s play “offense
and defense.” at is more true today than ever.

e Digital Imperative

e legal industry has had an ambivalent relationship with technology,

principally for economic and cultural reasons. at is changing, because, as
the ACC Survey and numerous other studies confirm, digital transformation
is a C-Suite priority. Why? Companies that embark on the digital journey
have a significant competitive advantage over those that don’t. e stakes
could scarcely be higher; a Harvard Business Review survey reported that
digital companies achieve an average  increase in gross margins over a
three-year period. A McKinsey report also quantified the upside of digital
transformation— data-driven organizations are  times more likely to
acquire customers; six times as likely to retain them; and  times as likely
to be profitable as a result.

Unsurprisingly, the legal function is generally lagging business in this

existential transformation process. Gartner reports that only  of in-
house legal teams are prepared to support digitally transforming enterprises.
at will soon change. e high stakes, elevated CLO interaction with the
C-Suite, and cultural divide separating legal and business explain the ACC
Survey finding that digital transformation is a CLO priority. e digital
journey is a process, not a declaration. Organizations do not “go digital”—
they become digitally transformed. is is a staged process that does not
happen overnight.

At its core, digital transformation is about customer-centricity and using

technology, design thinking, new ways/resources/tools of problem solving,
data, rethinking the division of labor, and constant improvement to drive
customer value and enhance alignment between buyer and seller. is is a
holistic, paradigmatic shift that Klaus Schwab coined “e Fourth Industrial
Revolution.” e legal function has no choice but to become part of it, and
that requires a shift from its default business as usual mindset to the art of
the possible.

e CLO Survey: What e Numbers Reveal

General Counsel remains the predominant title for in-house legal leaders,
but the Chief Legal Officer moniker more accurately captures the role’s
growing alignment with the C-Suite. Consider, for example, that  of
survey respondents report directly to CEO’s—up from . just two years
ago. is coincides with a steady rise in CLO input to the C-Suite on key
business decisions. CLO’s weigh in . of the time compared to  just
 years ago. ese numbers underscore the expanding scope and importance
of the legal function. ey also confirm that today’s CLO must not only
have legal expertise, but also possess business and technological acumen,
management skills, and leadership qualities required to galvanize new ways
of delivering legal services.

New functions and responsibilities—and the rewards and status that

accompany them—demand new skillsets and mindsets. e augmented
skills required of CLO’s must be accompanied by intellectual agility and
creativity. CLO’s must have the ability to reimagine how things could be
done to better align with the enterprise and to meet its objectives. ey
must possess creativity, leadership, and management skills. is is a vastly
expanded core competency list for CLO’s; it will have a trickle-down effect
on the entire legal industry. e legal ecosystem—like business—must
jettison insular, legacy notions of the legal function and adapt them to client
needs.

Spoiler alert: lawyers are no longer the center of their insular, self-
selected/regulated/managed/perpetuated universe. eir focus must be on
consumers and society, not themselves.

A Look Ahead

CLO’s take their cues from the C-Suite. CLO’s participating in the ACC
Survey rank ordered the following as enterprise priorities in the next five
years: () delivering value to customers; () maximizing profit (driving
value); and () investing in employees. ese organizational priorities are
what CLO’s and the broader legal industry should focus on. Customer value
and satisfaction is the desired end of digital transformation and the sine qua
non of business. It is noteworthy that customer value/satisfaction a higher
enterprise priority than maximizing profit—a reminder that short-term
profitability is no substitute for customer loyalty. Investing in employees—
upskilling— is another indicator that investment in a long-term talent
management strategy is essential to business success. is is in stark contrast
to the volatility and turnover endemic to law firms specifically and the legal
industry generally.
e paradox is that in the age of breathtaking fast technological advances,
long-term strategies for customer loyalty and alignment are the focus.

Conclusion

e ACC  CLO Survey confirms the lead role CLO’s are playing in
legal transformation. e rest of the industry should focus less on
“disruption” and self-styled “innovation,” and more on understanding
anticipating and satisfying customer needs. at’s what CLO’s are doing and
what the rest of the legal ecosystem will be doing soon.

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