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According to a new report, even as hiring slows down, fewer Chief Legal Officers (CLOs) are planning to outsource more work to outside firms and alternative legal services providers (ALSPs). Instead, they plan to close the gap by utilizing existing department staff and technology. The report states that most CLOs are focused on advancing legal operations and cost-minimization strategies, likely due to the pressures of the recessionary environment.
Contract management remains the leading technology for making the legal department more efficient, with two-thirds of CLOs stating it as their top technology priority, similar to previous years. Other technologies, such as generic document management and workflow tools, are also prioritized by CLOs, but not as high as contract management. However, fewer CLOs are planning to make significant investments in technology this year, as many have already purchased what they need.
From a risk standpoint, CLOs focus on increased regulations specific to their industry. Still, they also focus on broader regulatory risks, mainly connected to data privacy and security. Almost 70% say the volume of privacy-related regulatory enforcement will increase, up from 60% last year, and over half say they’ve put in place technology solutions to help them comply. Additionally, 85% say technology related to data privacy and security compliance is an area where their spending is expected to increase this year.
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The survey also found a 4% jump in the percentage of CLOs who now have data privacy and security in their portfolio, increasing the share of CLOs who oversee it to more than half. Mergers and acquisitions are other areas that CLOs expect to face more risk, with almost 40% saying they expect their deals to present legal challenges. The report states that mergers, acquisitions, and spinoffs remain the area most CLOs believe will require the most additional resources.
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The report suggests that CLOs focus on streamlining their operations and minimizing costs during these uncertain economic times. They are utilizing existing staff and technology to handle the workload and prioritizing contract management, data privacy, and security compliance. Additionally, they keep a close eye on increased regulatory risks, particularly in data privacy and security and mergers and acquisitions.
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CLOs to reduce hiring, focus on operations
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