Dive Brief:
- Only 10% of U.S. chief legal officers believe the “roles, responsibilities, and accountabilities” are clearly defined for GenAI usage in their companies, according to an annual strategy survey of 460 senior legal executives conducted by Deloitte. Among European CLOs, the percentage was slightly higher, 21%.
- As well as GenAI, CLOs are focused on issues including data security, cyber risk and regulatory and climate regulation. Privacy issues will be the top priority for the U.S. CLOs over the next 12 months, followed by litigation. In Europe, cyber/data security was the top issue for CLOs, who ranked regulatory and climate compliance as their No. 2 priority.
- Top legal executives are also spending less time on legal work and more on strategic initiatives that affect the full organization. Globally, at least 70% of the surveyed CLOs said they’re leading or jointly leading at least five enterprise-wide transformation efforts. The survey covered legal executives in the U.S., Europe, Canada and Australia, with the vast majority of responses from the U.S. and Europe.
Dive Insight:
There’s little doubt new generative artificial intelligence tools are seen as a transformation technology across numerous industries. Amid investment in AI, chief legal officers have a question: Who within the company “owns” this new software and will be responsible and accountable for its oversight?
“CEOs got very excited about the potential of (GenAI) and they said this is going to transform the way we do business,” Don Fancher, leader of Deloitte’s Chief Legal Officer Program, told Legal Dive Tuesday. “And then everyone throughout the organization began to scramble within their lanes of responsibility to move forward with AI.”
As a result, the CLO and others within corporate legal departments are seeking to clarify who will be coordinating and overseeing the use and output of generative AI tools, he said.
Functions such as technology, finance and marketing will play important roles in AI management, he said, but “no one part of the organization will own, and no one part of the organization should own” AI efforts, Fancher said.
“It needs to be a collaborative effort to ensure that generative AI is effectively being utilized in a safe, secure and productive way,” he said.
The survey’s finding on AI’s roles and responsibilities stood in sharp contrast to whether CLOs believe that their C-suite colleagues understand “the long-term potential of AI technologies,” as 68% of U.S. CLOs said they do. In Europe, less than half (47%) of CLOs said that top executives grasp AI potential.
In other findings from the survey:
- More than one-third of U.S. CLOs (35%) are overseeing the strategy transformation for ESG efforts, while 34% oversee their company’s cultural transformation. In Europe, the top two CLO focus areas are ESG initiatives and workplace/real estate transformation, each at 28%.
- Securing adequate budgets for their work was the top challenge for both U.S. and European CLOs, according to the survey conducted in late 2023.
- CLOs rated the level of trust between legal and other parts of their organization as good. About 85% said trust was “very high” or “extremely high” and 78% said that trust between their department and other teams had increased over the prior 12 months. The CLO “is no longer considered a gatekeeper function” constraining a company’s ability to act, Fancher said. “That has really evolved.” The CLO and team still present risk perspectives on issues but increasingly do so “in a collaborative fashion with the enterprise and with the intent to drive success,” he said.
