For the past seven years, I have been a product marketer focused on the growing and changing technology needs of corporate legal departments. In a world where business moves faster than ever and where company results can be impacted by a myriad of external forces including public perception, geographical expansion, new regulations, and employee incidents, the stakes for the Office of the General Counsel and the legal department have never been higher.
Given that backdrop, I was incredibly excited when I first heard that Gartner was creating a new magic quadrant on Integrated Risk Management (IRM) that included Enterprise Legal Management (ELM) as a core component. ELM plays a critical role in enabling Mitratech’s clients to manage legal and compliance risk, and in general there has been a lack of analysis on the related technology and solutions.
Gartner defines IRM as “the combined technology, processes and data that serves to fulfill the objective of enabling the simplification, automation and integration of strategic, operational and IT risk management across an organization.” This definition really reflects trends we are observing with our clients, as they strive to extend legal operations out across the enterprise to improve collaboration and mitigate risks before they become legal matters or incidents.
The Evolving Role of the General Counsel
Mitratech’s 30-year history providing the ELM solutions used to manage their core legal processes and operations has provided us considerable insight into the evolution of the role of the General Counsel (GC). That insight really differentiated us from some of the other vendors who were mapped by Gartner in their IRM Magic Quadrant, and helped Mitratech attain Gartner’s recognition of us in that report as a IRM “Visionary.”
The GC’s role historically was centered on the management of outside counsel relationships while also acting as a legal advisor to the rest of the company. For decades, legal departments aspired to become less reactive and more predictable, while being better partners with the rest of the organization. However, over the past decade, the role of the GC has been shifting and expanding, and what started as a gradual change has turned into a real force that is driving our product strategy.
Today the General Counsel is frequently responsible for Risk and Compliance as well. What was a legal advisor for the corporation is now a strategic advisor to the CEO and Board of Directors.
- According to a 2016 NYSE Governance Services Survey report conducted by the firm of BakerGilmore, 97% of US corporate executive officers and directors expect the GC to be part of the executive management team by the year 2020, an increase of 16 percentage points from 10 years ago. This same survey shows that the number of GC’s acting as the Chief Risk Officer is expected to more than double by 2020.
- According to the Global Legal Post and their report The Law Department of the Future and General Counsel Excellence, more than 50% of GC’s now identify their function as something other than managing the legal department. In fact, almost 1/3 describe themselves as a stakeholder in business decisions, and 30% see compliance as the biggest threat to the business.
As the role of the GC continues to evolve into a strategic risk manager for the organization, our technology needs to continue to extend with it in order to remain the trusted technology partner of corporate legal professionals, regardless of their practice areas.
Addressing a New World of Risk
The operational concerns of corporations, along with legal requirements and regulatory changes, create complex, overlapping obligations that our clients are forced to manage. Passive management—or worse, reactive response—is no longer an option. The risks and resulting costs of complacency, both in terms of opportunities unrealized and the negative impact on profitability, can be too damaging.
One only needs to look at recent examples of Volkswagen, whose emissions scandal could hit $87B in a worst-case scenario, according to Credit Suisse estimates, or the recent Equifax breach of 143 million accounts to understand the scale of risk management today and how it can impact every part of an organization. These elements intersect to create a complexity unprecedented in our corporate history, and we only see this challenge growing over the next 5 years.
In this new world, risk managers from around the company will realize the incremental benefits of collaboration and a single source of truth for managing legal, regulatory, and operational risk. I really appreciate the work that Gartner has done in establishing the IRM category and creating a framework for technology providers to be measured against, and look forward to the continued evolution of solutions created to meet evolving risk management needs.
Looking for the complete reprint of the 2018 Gartner Magic Quadrant on Integrated Risk Management? Download your FREE copy today >>