Corporate Counsel: Litigation Chiefs Say They’re Getting Along Better With Regulators

Originally Published in Corporate Counsel |November 25, 2015 | By Sue Reisinger

Companies are working harder to please their regulators, according to a recent poll of chief litigation officers. About 35 percent of those polled said they have already shared privileged internal investigation documents with regulators, while another 50 percent said they would consider it.

Only 14 percent of respondents said they have a negative relationship with their regulators, according to the annual corporate litigation survey by the Consero Group. Consero puts on conferences for senior executives and conducted this survey at its corporate litigation forum in October.

The number of chief litigators willing to share information with the government “speaks to a mostly positive relationship with external regulators and a relatively cooperative stance,” says Paul Mandell, founder and CEO of Consero.

The cooperation just makes sense, Mandell explains. “A combative relationship with regulators can become more costly than a positive one,” he adds. “Many companies have learned that lesson. They are more open and cooperative sooner rather than later.”

Mandell says the survey also showed that overall legal department budgets “are doing OK, they haven’t decreased. Chief litigators seem to have enough resources, and staff sizes have increased a bit.”

On a lower note, nearly half the respondents (43 percent) said they didn’t believe their chief executives were adequately aware of legal risks. Mandell says he was surprised at the high number.

“It’s concerning,” he says, “because for the legal function to be effective, it needs the buy-in of the C-suite and other executives. Chief litigation officers may want to spend more time in the coming months educating their senior leadership team.”

Mandell was also surprised that 43 percent of respondents said they don’t believe their outside counsel is providing sufficient value for the cost. He says that percentage is higher than numbers in surveys of other members of the legal department, such as general counsel.

“I think that chief litigators may tend to be slightly less pleased with their outside counsel,” Mandell says. “The number is high enough that it’s worth taking a look at.”

The survey included 63 litigators from a cross section of Fortune 1000 companies. While the numbers are not statistically significant, Consero uses the annual surveys to spot important trends.

In other findings, the survey said nearly half the respondents reported increasing their use of alternative fee arrangements with outside counsel in the past year. And 88 percent said they have not delegated more legal work to outside law firms.

While companies still turn to outside experts when there is a government investigation or other legal crisis, Mandell says, “More routine or recurring work is being managed more efficiently in-house. That’s part of an ongoing effort to rein in costs.”