Grant Thornton survey finds regulatory compliance, litigation and cybersecurity top list of in-house counsels’ organizational growth threats
CHICAGO, May 28, 2014—In-house counsel are dealing with a lack of resources, impacting their ability to proactively reduce and appropriately react to risks, according to Grant Thornton LLP’s 2014 Corporate General Counsel Survey.
While many respondents are neutral (50 percent), 33 percent claim “the pace of new regulatory legislation and regulations is more than we can keep up with.” The survey results also show that regulatory compliance related to corruption and bribery, regulatory-related litigation and investigations and cybersecurity and data privacy top the list of in-house counsels’ organizational growth threats.
“Corporate counsel are facing a variety of new regulatory risks every day. In addition to industry-based regulation, there are concerns about fraud, ethical behavior and new threats such as data security,” said Brad Preber, national managing partner of Grant Thornton’s Forensic and Valuation Services practice. “At the same time – or perhaps because of these new risks – corporate counsel do not feel they have the resources to keep up, perhaps creating a vicious circle of regulatory and litigation risk.”
Given the lack of resources, new risks of cybersecurity and data privacy are among top growth threats for in-house counsel. Almost 60 percent of in-house counsel respondents see privacy as a top-three concern. The areas of greatest concern are the security and privacy of customer and client data (57 percent). However, the fear of the unknown also ranks high (49 percent), together with legal compliance (46 percent), the potential for undetected breaches (42 percent) and employee and workplace privacy (42 percent).
“The problem with cybercrime is that it can go undetected and cause massive amounts of damage in very short amounts of time,” said Skip Westfall, managing director, Forensic Technology Services leader and Cybersecurity Services co-leader at Grant Thornton. “Combine this with the ever-increasing amount of sensitive data sources, and you have a recipe for potential disaster.”
Along with cybersecurity and data privacy, regulatory compliance surrounding corruption and bribery also tops the list of organizational growth threats. Even with the movement toward the codification of compliance plans by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) surrounding the U.S. Foreign Corrupt Practices Act, only 29 percent of the in-house counsel responding to the survey admit that they have implemented all of the DOJ and SEC guidelines, while 47 percent are “not sufficiently familiar” with the guidelines.
For organizations that have not fully implemented the guidelines, 65 percent of in-house counsel cite that a “lack of compliance staff and budgets” is the main reason. The second and third most common responses from in-house counsel are that there are “multiple regulatory and compliance models around the world” and it is “difficult to manage across multiple jurisdictions.”
Additional highlights from the 2014 Corporate General Counsel Survey include:
- Less than half (34 percent) of the in-house counsel surveyed believe that their organization is conducting more internal investigations.
- Twenty-eight percent believe their organization is expanding outside counsel relationships to manage regulatory investigations and litigation.
- Twenty percent believe their organization is expanding the in-house legal department to manage regulatory investigations and litigation.
Please visit Grant Thornton’s 2014 Corporate General Counsel Survey for a copy of the survey findings.
About Grant Thornton LLP’s 2014 Corporate General Counsel Survey
The 2014 survey of in-house counsel aimed to measure in-house counsels’ assessment of the biggest threats to organizational growth. The survey was administered online by ALM Marketing Services between January 28 and February 12, with 256 in-house counsel responding. Respondents came from public and private companies with a wide range of revenues from across the United States. Organizations were distributed across industry sectors, including finance, insurance, manufacturing, health care, energy and technology.
About Grant Thornton LLP
Founded in Chicago in 1924, Grant Thornton LLP (Grant Thornton) is the U.S. member firm of Grant Thornton International Ltd, one of the world’s leading organizations of independent audit, tax and advisory firms. In the United States, Grant Thornton has revenues in excess of $1.3 billion and operates 56 offices with more than 500 partners and 6,000 employees. Grant Thornton works with a broad range of dynamic publicly and privately held companies, government agencies, financial institutions and civic and religious organizations.
“Grant Thornton” refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered by the member firms. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. Please see GrantThornton.com for further details.