Top 5 changes general counsel must face in the wake of the pandemic
Building off the lessons from the COVID-19 pandemic, general counsel (GCs) for growing businesses face an evolving set of disruptions that have profound legal implications.
Because your business depends on you for risk mitigation and management, your role may expand as things continue to shift quickly. It’s important to stay on your toes so you can be a trusted advisor as your company navigates the post-COVID changes in society and the regulatory environment. Here are some changes to watch out for — and how to address them.
Coping with a changing environment
Corporate law departments and lawyers for small business owners are operating in a state of flux — an environment in which risk mitigation becomes more difficult as new crises and societal shifts affect the business from every side. Although many changes are afoot, a few rise to the top of the list of issues to watch for in the near future.
1. Increase in disputes
Disputes have become more prevalent since the outset of COVID-19, including questions about whether the pandemic affected a contract or activated a force majeure or material adverse change clause. In response, more than 40% of law departments report putting new dispute-prevention measures in place since the start of the pandemic, according to the 2021 State of Corporate Law Departments report. In addition, 40% of law departments anticipate spending more on disputes than they did before the pandemic.
2. Reprioritization of climate change
As COVID-19 shifts from being the primary concern to just one of many challenges that world leaders address, other global crises may demand more attention. In the United States, the Biden administration is bringing climate change back into the spotlight, with several executive orders related to climate, energy, and environment emerging since President Biden took office. As a legal advisor for a small business, you may face questions about how to address climate impacts and how to stay in compliance with changing regulatory regimes on this front.
3. Regulatory developments in data privacy and protection
Data protection has grown in prominence as a global issue in the past few years, and the shift to remote work using digital tools has only accelerated that process. That’s why 60% of chief legal officers believe that data protection and privacy rules are apt to cause legal concerns in the near future, according to the 2021 State of Corporate Law Departments report. Legal departments will need to keep up with changing state and federal laws on data privacy to best advise their companies on staying compliant and protecting their own data.
4. New focus on diversity, equity, and inclusion
As a part of risk mitigation, law departments at growing businesses have some responsibility for assessing whether their company is being a good corporate citizen. Too often, unconscious bias affects hiring and other decisions, including compensation. Although the average salary for female general counsel exceeded that of males in 2019 for U.S. businesses with revenue of less than $1 million, according to Major, Lindsey and Africa’s 2020 In-House Counsel Compensation Survey, the pay gap favors males at larger businesses. With widespread concern about diversity, equity, and inclusion increasing in society at large, law departments should be ready to assess current policies and recommend action on this front.
5. A more balanced approach to legal work
The pandemic created a new work-life format for many in the legal industry and proved that lawyers don’t always need to be in the office to excel as legal advisors for small businesses. Corporate law departments have had to approach collaboration, work allocation, and technology adoption more efficiently and creatively. These changes to likely will continue even after the pandemic has ebbed.
How can legal departments prepare for these changes?
Business lawyers for small businesses can prepare for all of this transition — and more — by following these best practices.
Maintain momentum toward efficient, remote work
Legal departments can keep legal support available at all times by continuing to cultivate the productivity and flexibility that remote working has enabled for their teams. Even as many in-house legal teams return to the office, legal departments should maintain virtual work capabilities and encourage work-life balance to ensure that their professionals can build sustainable work lives amid many stressful changes.
Stay close to business decision-making
With so much change happening, legal teams need to be brought into discussions on business strategy, stay up to date on the actions of competitors, and track evolving regulations. It is a good idea to formalize these processes, not only within the legal team but also with the organization’s business leaders and with outside legal advisors.
Keep innovating on operations
In a digital-first world where remote work is normalized, legal operations specialists are increasingly essential for ensuring that legal departments have the right tools and resources to succeed. In 2020, 81% of law departments reported hiring for legal operations roles, compared to 57% in the previous year, according to the 2021 State of Corporate Law Departments report. This shift shows that firms know that digital tools and streamlined operations will be essential for future success.
Remember: Change can bring opportunity
The pandemic brought significant changes to lawyers for small business owners — some of which can be opportunities for improvement. For example, many legal teams now have more streamlined and digitized workflows, a healthier work-life balance, better prioritization of important societal issues, and the chance to guide their companies toward being better corporate citizens.
As a business lawyer for a small business, you may find Thomson Reuters™ Practical Law for startups and small businesses Thomson Reuters™ Practical Law for startups and small businesses to be an important legal resource to help your team make smart decisions on all these matters and more. Practical Law offers resources, including practice notes, toolkits, and templates that can help you manage and mitigate risk effectively in changing times and expand and enhance your role as a strategic consultant to your business.