For in-house counsel to navigate the challenges and opportunities that lie ahead, they need to stay current on the latest trends. As we have already entered 2024, several key trends are shaping the landscape of in-house legal operations. With the continued rise of artificial intelligence (AI), labor union influence, and the increasing presence of women general counsels (GCs), legal leaders must be prepared to adjust and embrace these changes. Additionally, cross-collaboration between legal departments and other business units, as well as the ongoing focus on antitrust issues, will play a significant role in shaping the future of in-house legal operations. In this article, we will explore these six in-house legal trends to watch this year and discuss their potential impact on the legal industry.

The Deepening Inroads of Generative AI

Generative AI, including technologies like ChatGPT, has gained significant attention in recent years due to its ability to provide human-like responses to queries. The adoption of generative AI is expected to accelerate within in-house legal teams in the coming months. Legal departments have been at the forefront of evaluating and implementing generative AI tools for various applications, such as legal research, contract review, and brief writing. The familiarity of employees with AI in their everyday lives has facilitated the adoption of generative AI in legal operations.

However, legal leaders must also address the risks associated with generative AI, particularly in data privacy and intellectual property. A Gartner survey revealed that seven in ten legal, compliance and privacy leaders consider rapid generative AI adoption a top concern. To mitigate these risks, legal leaders are developing governance and policies to ensure high-benefit, low-risk use cases of generative AI within their organizations.

The Continuing Influence of Labor Unions

Labor unions have experienced a resurgence in recent years, and their influence is expected to grow even further this year. Companies that have not traditionally dealt with unions, such as Starbucks, Amazon, and Apple, are now facing increased unionization efforts. In the fiscal year that ended in September 2023, unions filed nearly 2,600 petitions for elections, indicating a 3% increase from the previous year.

The rise in unionization efforts, coupled with high-profile strikes by organizations like the United Auto Workers and Hollywood screenwriters, is likely to embolden workers to strike or organize. This poses challenges for in-house counsel, especially those who may not have significant experience in labor issues. Economic conditions, such as inflation and worker shortages, further contribute to the momentum of union interest. To navigate these challenges, in-house counsel must be prepared for potential labor disputes and be proactive in understanding labor laws and regulations.

Increasing Influence of Women General Counsels

The appointment of women as general counsels (GCs) in large companies has been steadily increasing. In 2022, women comprised approximately two-thirds of the 43 GC appointments at Fortune 500 companies, surpassing men for the first time. This trend is not limited to appointments but also extends to compensation. In 2022, women GCs earned a median compensation of $3.2 million, exceeding their male counterparts.

Reports indicate that non-minority women who achieve the GC position in multi-lawyer departments are among the highest-paid. Furthermore, compensation levels for minority women in general counsel positions have surpassed those of their peers for the first time. These developments reflect the increasing recognition of women's abilities, leadership, and value within the legal industry. It is essential to celebrate these achievements and continue to promote diversity and inclusion in the legal profession.

Bankruptcies Driving Litigation Finance

Bankruptcies are expected to be a significant factor in the legal landscape, creating opportunities for the litigation finance business. Despite increased competition from insurance companies and regulatory efforts, bankruptcies remain a fertile ground for litigation finance. In November alone, there were nearly 600 bankruptcies by companies with at least $2 million in assets, making 2023 a year with the highest number of filings since 2010.

Litigation funders can assist estates in pursuing creditor recoveries, fraudulent transfers, breaches of fiduciary duty, and other bankruptcy-related claims. They can also help estates access dormant assets unrelated to the bankruptcy, such as antitrust claims. Although insurance companies have entered the litigation finance space, traditional funders remain confident due to their focus on early-stage cases that insurers are less interested in.

Concerns over regulatory scrutiny, particularly regarding disclosure requirements, have not posed significant threats to the litigation finance industry. While some states and lawmakers have proposed mandatory disclosure legislation, the bills have had limited traction. The industry has dismissed national security concerns raised by the U.S. Chamber of Commerce, emphasizing the absence of a factual basis for such claims.

Emphasizing Cross-Collaboration in In-House Legal Operations

Improved collaboration between legal departments and other business units is a key operational goal for in-house legal professionals. According to a survey from the Association of Corporate Counsel and Everlaw, 70% of legal professionals consider better alignment with internal business units a priority for the coming year. Collaboration often involves not only providing legal advice but also offering strategic business advice.

To enhance relationships with other departments, legal departments must address their reputation for unresponsiveness. Survey data indicates that approximately two-thirds of non-legal employees bypass legal and its policies due to perceived delays. In response, legal departments are striving to increase responsiveness and partner more closely with business operations, sales, and finance units. Effective collaboration with other business units can enable legal operations to become more than mere enablers within the organization.

Antitrust Issues in the Spotlight

The Biden administration's focus on antitrust issues is set to continue this year, with several high-profile cases pending against tech giants like Google, Meta, and Amazon. These cases will likely shape the future approach of the Department of Justice and the Federal Trade Commission. Antitrust activity is expected to be at its highest level in years, with more investigations and litigation anticipated.

A US antitrust trial over digital ads is scheduled for September against Google. The Department of Justice accuses Google of using anti-competitive deals to maintain its dominant position in internet searches. Another trial between the DOJ and Google is expected to take place, focusing on the company's control over online ad brokerage. The Federal Trade Commission's lawsuit against Amazon also highlights concerns about the company's alleged anti-competitive practices.

The outcome of these cases will have significant implications for the future regulation of big-tech companies. The FTC's approach, guided by Chair Lina Khan's perspective on the limitations of traditional antitrust approaches, will be closely watched. The legal landscape surrounding antitrust issues is poised for further developments as regulators seek to address competition concerns in the digital age.

Conclusion

In-house legal operations are subject to constant change and must adapt to emerging trends. Legal leaders must stay informed and proactive to navigate these trends effectively and position their organizations for success in the ever-evolving legal landscape. This year, leverage legal tech to stay ahead of the curve. Connect with us for a free demo to understand how Traact can transform your corporate and admin functions.