The New Legal Paradigm: The Business-Savvy Legal Adviser
Chief legal officers (CLOs) are increasingly expected to navigate diverse challenges, from budget cuts and regulatory enforcement to data management. At the same time, about 58% of CLOs are now overseeing three or more additional business functions beyond Legal, according to a recent Deloitte Legal survey. These multidisciplinary demands call for a new kind of legal professional who is not only an expert legally but also possess sharp business acumen. About 63% of CLOs agree, identifying business acumen as a skill they most wish to develop in their lawyers.
The future legal professional, therefore, will be a hybrid, adept in both legal matters and business problem-solving.
Mastering More Topics With Less Resources
CLOs often mention the intense pressure they are under to do more with less, while being asked to give advice on a widening range of topics. Here are some areas where the new hybrid legal professional will make a significant impact:
- Technology. Legal teams should keep up with emerging technologies, identifying and adopting tools that improve how they manage knowledge, workflows, and data, and how they support the larger business. They need to understand how technology can help solve complex business and legal problems; and be aware too of the risks involved with adopting new tech tools.
- Gen AI. As the possibilities for AI expand, legal and compliance professionals will need to navigate new regulations, novel copyright, liability, and confidentiality issues, more privacy and data protection questions, and related contracting challenges. At a minimum, legal counsel will need to advise executives, the board, and other stakeholders on the legal risks associated with business applications of AI. In another recent Deloitte Legal survey, 95% of surveyed CLOs reported their organizations have already engaged with Gen AI on some level, and 99% are either implementing or planning to implement Gen AI initiatives. However, survey results suggest there is work to be done when it comes to aligning on Gen AI strategy and initiatives, with only 27% of CLOs believe their organizations have the skills to execute on the mission and vision for Gen AI initiatives.
- Data privacy. The ability to track and analyze customer and product data offers key competitive advantages—but the more data captured, the more important it is to keep it private and secure. As data privacy regulations become more stringent, legal teams will have to work harder to stay abreast of changing laws, technologies, and challenges.
- Cybersecurity risks. Ransomware attacks and data breaches are becoming more sophisticated—and more frequent. Thirty-four percent of CLOs say that data breaches are the biggest data-related threat they want to address in 2024 and 40% say they plan to institute new processes to defend against these threats. As a company’s digital footprint expands, it gives rise to growing opportunities for cybercriminals. The legal department can, and should, play a central role in understanding and preventing the business and legal fallout of cyberattacks.
- ESG. Like all executives, legal leaders must factor climate-related risk into their business decisions. In fact, many CLOs are involved in leading their organizations’ ESG strategies, so they will need legal advisers who are knowledgeable and experienced about the latest environmental, sustainability, and governance regulations and furthermore about the best practices for implementing them.
- Tax. Global tax changes including OECD’s Pillar Two rules, the introduction of CESOP (Central Electronic System of Payment information) and ViDA rules (VAT in a Digital Age) will have complex effects on multinationals, specifically on their accounting and tax processes. Legal needs to take an informed, proactive approach to understanding the legal implications of changing tax laws so that operational disruption is managed effectively.
- Reputation management. To prevent corporate events that can cause great and rapid damage to reputations, CLOs can help establish appropriate governance and escalation procedures—and manage reputational risk efficiently by developing crisis playbooks and practicing response.
A New Kind of Legal Professional
Given the widening range of responsibilities, organizations should consider hiring (and instructing) a new type of legal professional—those who combine knowledge of the law with a pragmatic, business orientation. They need experts with the skills to provide business solutions to legal problems and legal solutions to business problems.
In practice, such professionals will:
- Act as multi-disciplinary business advisers. As noted, today’s general counsel is expected to offer strategic guidance both on legal issues and on emerging industry trends and market practices. GCs and their teams are expected to have a solid understanding of business operations, including techniques for enhancing productivity, improving efficiency, managing risk, and reducing costs.
When managing intangible assets, for example, to increase the value of IP and data, legal professionals need to go beyond the conventional protection of copyright, patents, and trademarks. Legal teams are expected to understand the value of the full range of their company’s’ intangible assets—including IP, data, brand, systems, and reputation—and how to enhance that value as the business grows. This includes addressing aspects of discovery, management, enforcement, and strategy of each asset to deliver maximum value and enhance competitive advantage.
- Focus on problem avoidance. Companies that seek legal input early in their product or project lifecycles are more likely to avoid legal problems entirely. Including general counsel in early-stage strategic planning, for example, can help anticipate legal issues, reducing the need for reactive or emergency intervention. A prime example is the ability to support both the business and legal side of M&A activity. Mergers and acquisitions involve more than technical legal processes, and legal professionals should be able to advise on the business growth that results from the M&A process. This requires legal teams that can identify risks and recommend deal strategies based on a multifaceted view of organizational structures, security, HR, tax, technology, and post-merger efficiencies.
- Integrate AI for business. Many legal departments are currently busy exploring the use Gen AI to reshape internal processes—for example, using AI to enhance due diligence or draft and review contract clauses. Forward-thinking legal teams are also finding ways to use AI to benefit internal clients and stakeholders. The best teams will do all the above, while offering proactive guidance on how to integrate Gen AI into company workstreams, including likely risks and rewards.
The Way Forward
Legal professionals need to blend legal excellence with multidisciplinary business guidance. Businesses should consider aiming for an approach that combines legal and business problem-solving techniques to deliver better outcomes and make an impact on their organizations. This calls for investment in the development of hybrid legal/business professionals throughout their careers, from foundational years to advanced managerial and advisory roles. This new generation of legal professionals will be instrumental in steering organizations towards a future marked by growth, resilience and sustainable success.
—Richard Punt, Deloitte global legal leader and Richard Susskind, independent adviser to Deloitte Legal, contributed to this piece.
Sofia Barros Carvalhosa is the global legal talent leader at Deloitte Legal.
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