In today』s fast-paced business environment, it』s no surprise that corporate legal teams are embracing new responsibilities that extend beyond traditional legal tasks. Chief Legal Officers (CLOs), in particular, are at the forefront of this evolution. As organizations transform, the role of legal leaders evolves as well, reshaping how they allocate their time and redefine their priorities. A recent survey by Deloitte, involving over 450 legal executives from the United States, Canada, Australia, and Europe, sheds light on the key shifts impacting CLOs in 2024.
Expanding Horizons for CLOs
CLOs are spending less time on conventional legal matters and focusing more on broader organizational transformation efforts. While this transition offers exciting opportunities to influence the enterprise at a strategic level, it also presents significant challenges for CLOs accustomed to private practice or traditional in-house legal roles. Navigating this shift requires flexibility, a strong sense of curiosity, and the ability to forge cross-functional partnerships while nurturing talent across the organization.
Legal Strategy: A Piece of the Larger Puzzle
Providing legal and regulatory guidance remains a core function for CLOs, but their influence now extends to spearheading major organizational initiatives. More than 70% of surveyed CLOs are leading or co-leading at least five enterprise-wide transformation projects.
Key initiatives include:
- Legal entity rationalization, which ranked as the top priority globally (except in Australia, where it was second).
- Digital transformation, workforce and talent optimization, tax efficiency, and company reorganization in the United States.
Moreover, trust between legal functions and the wider enterprise is robust, with 85% of respondents reporting very or extremely high trust levels. CLOs recognize, however, that communication gaps, misalignment, and low transparency are barriers that must be addressed to maintain this trust.
Embracing Generative AI (GenAI)
CLOs are uniquely positioned to guide their organizations through the adoption of Generative AI (GenAI). With 93% of CLOs acknowledging the transformative potential of GenAI, they are developing policies and strategies to navigate its complexities in a rapidly shifting regulatory landscape. GenAI offers significant benefits, such as:
- Accelerating innovation
- Enhancing process efficiency
- Reducing costs
However, only 45% of CLOs believe their leadership teams are aligned on AI strategies, and just 27% feel their organizations possess the necessary skills for effective implementation. This has led many CLOs to collaborate with external partners like law firms, alternative legal service providers (ALSPs), and technology advisors to build in-house expertise.
Meeting Rising Workloads with Innovation
With legal workloads increasing—as reported by 82% of respondents—CLOs are reevaluating hiring, training, and outsourcing strategies. Nearly half of surveyed legal functions delegate their workload to external counsel or ALSPs, a figure expected to grow, particularly in the United States, where 86% anticipate increased ALSP usage in the next year.
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To meet these demands, CLOs are embracing technology to streamline operations. Innovations in digitalization and automation are enabling legal teams to focus on strategic priorities by reducing manual tasks. Technology is particularly effective in areas like:
- Knowledge management
- Data analytics and reporting
- Transaction management
Adding legal operations specialists to lead these initiatives is becoming a key consideration for forward-thinking CLOs.
Building Skills for Future Success
The expanding scope of CLO responsibilities requires a diverse set of tools, skills, and partnerships. GenAI, globalization, and complex operating models demand that CLOs excel in cross-functional leadership and external vendor management. By mastering these areas, CLOs can enhance their organization』s competitive advantage and contribute to long-term success.
As the expectations placed on CLOs continue to grow, those who adapt by integrating technology, fostering collaboration, and driving enterprise-wide initiatives will remain indispensable in shaping their organizations' future.
