Economic pressures, regulatory burdens, data security—it seems that the list of concerns continues to grow for chief legal officers (CLO). In a new survey from the Association of Corporate Counsel, CLOs shared the most pressing issues facing their companies, and reported being heavily involved in business strategy. Fortunately, many are getting increased budgets to handle these responsibilities: Two-thirds of respondents said that their in-house budget increased during the past year, while 59 percent saw their outside counsel budgets increase.
81% Chief legal officers who are satisfied with their jobs, down from 92 percent in 2011
87% CLOs who ranked ethics and compliance as an important issue (the most of any response)
78% CLOs who said they spend most of their time participating in strategic corporate issues and advising C-suite executives
72% CLOs who said their budgets increased over the past year
After a few months of job growth, the legal services sector took a few steps back last month when it shed more than 2,000 jobs, according to numbers from the U.S. Bureau of Labor Statistics (BLS). There was one silver lining in the January report, namely, that the sector actually added 1,900 jobs in December 2012, which was higher than previously reported. But even with the change, the industry has lost 500 jobs since last November.
2,400 Number of jobs the legal sector lost in January
157,000 Jobs the economy as a whole added last month
1,900 Jobs the legal services industry added in December, revised upwards from the BLS’s earlier estimate of 1,000
1.125 million Total number of people who have jobs in the legal field
Plaintiffs firms that handle securities class actions had a good year in 2012, as they raked in fees and court-related expenses of more than $650 million, according to a report from NERA Economic Consulting. The report also found that aggregate settlement amounts increased significantly between 2011 and 2012, although the median proportion of fees to settlements is on the decline.
$653 million Total fees and court-related expenses that these firms collected in 2012, up 4 percent from 2011
$3.3 billion Total amount recovered in class actions last year
$822.5 million Largest fee awarded in 2012, stemming from a 2004 case against American International Group that ended in two partial settlements
22% Increase in aggregate settlement amounts from 2011 to 2012
18.2% Percentage of recovery that went to fees for settlements recovering $100 million to $500 million, down from 24.2 percent in the period between 1996 to 2009
The U.S. financial sector has been much maligned since the onset of the 2008 financial crisis. But perhaps some of that ire is dissipating—at least, if the falling number of federal securities fraud lawsuits seeking class-action status is any indication. That number hit its lowest point in six years in 2012, largely because of a decline in the number of mergers and acquisitions and Chinese reverse merger filings, according to a study by Stanford Law School and Cornerstone Research. That trend could reverse itself, however, if new federal whistleblower programs lead to more fraud tips.
152 Federal securities fraud lawsuits seeking class-action status in 2012, down from 188 in 2011
1 of 29 Standard & Poor’s 500 companies that faced a new securities class action filing last year
15 Filings that targeted financial sector companies, down from 43 in 2010
Big Law defied expectations in 2012, managing to boost profits and revenues despite previously grim forecasts. In fact, gross firm revenues, net incomes and profits per equity partner at large U.S. law firms last year were all at their highest levels since the recession. That increase may be the result of firms’ efforts to wrap up collections and last-minute business in advance of the fiscal cliff.
The good news comes after a spate of studies that predicted low profits, partner layoffs and declining demand for legal services.
5% Increase in law firm gross revenues between 2011 and 2012
6% Increase in net income for firms over the same period
5% Rise in profits per equity partner
15% U.S. firms that planned to reduce their number of partners in the first quarter of this year due to slow growth, according to a prior survey by Wells Fargo Private Bank
Companies may be taking legal risks more seriously—and upping the resources available to their legal departments—but many GCs are still concerned about data security at their businesses, according to a new survey from Consero Group. More than 90 percent of general counsel said that they have enough access to their CEOs, and most also said they were satisfied with the level of resources being given to them. But many GCs were less than thrilled about their companies’ efforts to prevent cyber security breaches.
91% General counsel who say they have sufficient access to their CEOs
72% GCs who are satisfied with the level of resources available to them
30% GCs who said that their companies were not ready to defend against cyber security threats
28% General counsel whose companies had experienced a cyber security breach in the last year