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Feb. 2 — “Compliance is one of the fastest growing areas where companies are recruiting,” James A. Merklinger, vice president and chief legal officer for the Association of Corporate Counsel, told Bloomberg BNA Jan. 30.
Toward that end, 96 percent of chief legal officers rated ethics and compliance as an important issue for 2015, according to the ACC Chief Legal Officers 2015 Survey, released Jan. 29.
Based on responses from 1,289 individuals in 46 countries, the survey examined the trends and changes in the chief legal officer role across issues such as compliance, data protection, succession planning and diversification.
Compliance was one of the top three areas in which CLOs reported creating positions during the past 12 months, according to the survey. Merklinger said this trend represents a good opportunity for “any attorney who wants to market themselves as having some experience with compliance.”
The survey found that CLOs are spending an average of 13 percent of their time ensuring their companies comply with various regulations.
Just more than one-quarter of CLOs reported experiencing data breaches in their companies in the past two years, at an average cost of $3.5 million, according to the survey.
“The organizations themselves need cross-departmental teams” to look at this issue, said Merklinger. “Legal knows what you have to do to respond to a data breach, IT works on protecting to make sure that doesn’t happen, but they can’t work in silos. They have to work together.”
Despite the prevalence of data breaches, only one in three companies have data breach insurance, according to the survey.
Moreover, the survey found that size affects the likelihood of a data breach. About 22 percent of CLOs at companies with fewer than 10 employees reported a data breach, while 64 percent of CLOs at companies with 100 to 250 employees reported a breach.
Similarly, companies with higher annual revenues were significantly more likely to experience a data breach in the last two years. Although only 16 percent of companies with annual revenues below $100 million reported data breaches in the last two years, more than half of the 148 CLOs in companies that reported $4 billion in revenue reported breaches.
According to the survey, data breaches were more likely to be reported in the health care industry. Almost 50 percent of health care CLOs reported experiencing a data breach during the past two years.
In other findings, the survey determined that fewer than half of CLOs are actively engaged in succession planning—a process that some experts have identified as key to, among other things, addressing gender disparity at the C-Suite level of U.S. companies.
“Succession planning is more likely at the bigger companies with higher revenues,” said Merklinger, but “less than half of the respondents have a plan for succession.”
Approximately 44 percent of CLOs have identified at least one potential internal candidate to succeed them, according to the survey. Men were slightly less likely than women to report having such a candidate.
The survey noted that “[c]hanging mindsets in organizations requires elevated awareness of the positive contributions and business outcomes associated with a female presence in top leadership positions.”
“The demographics are changing” in the CLO role, said Merklinger. The percentage of women occupying the CLO role is 12 percent higher in Generation X than in the Baby Boomer Generation, the survey found.
Merklinger commented that “people are in CLO positions for sometimes 30 years, it’s not as if there are a lot of positions opening up every year,” but there are more female CLOs in the younger generations than there were in older generations.
The ACC is a global bar association representing more than 37,000 in-house counsel in 90 countries.
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The ACC survey is available at http://www.acc.com/legalresources/ resource.cfm?show=1389463.
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