New survey of the financial services sector from K&L Gates and Forbes Insights. Photo: Forbes Insights.

The role of general counsel is becoming broader, more demanding and increasingly important due, at least in part, to today's intense and ever-changing regulatory environment, according to a new survey of U.S.-based business and legal executives in the financial services industry.

The report from K&L Gates and Forbes Insights also found that over the next three years the most in-demand lawyers will be those who have expertise with regulatory compliance, fraud protection, risk management, data protection and consumer law compliance.

The findings are based on the responses of 200 executives in organizations of various sizes and within different financial sectors, from asset management and capital markets to financial technology and economic development banking.

When asked how their role had changed over the last three years, 48 percent of the corporate counsel included in the survey said they were covering more areas of law, while 43 percent said their role was “much more important due to the regulatory environment.”

Nearly 20 percent said they were handling more tech-related issues; 17 percent were dealing with higher-stakes issues, such as penalties and lawsuits; and 16 percent said they had more supervisory responsibilities over partners or vendors.

Corporate counsel “have to become much more conversant in a broader set of issues than ever before,” said Keith Atkinson, managing director and associate general counsel of Nuveen LLC, the Charlotte, North Carolina-based asset management unit of the Fortune 100 financial services organization Teachers Insurance and Annuity Association of America-College Retirement Equities Fund. His comments were included in the survey.

“We really have pivoted much more to become business lawyers, to really understand the desired outcomes of our clients, to understand what our peers and competitors are doing, but also understand the regulatory risks of taking certain actions,” added Atkinson.

Survey respondents said they expect general counsel to have a “wide arrange of competencies,” including industry knowledge, predictive thinking and an understanding of the disruptive forces affecting the financial services industry.

Peter Germain, executive vice president and chief legal officer of Federated Investors Inc., stated in the report that he's seen a host of major changes since he joined the Pittsburgh-based financial services firm in 1984, when employees were using electric typewriters.  

He said “the next phase will be even more revolutionary with the power that's going to be at the fingertips of legal and compliance professionals.”

Some other noteworthy findings:

  • Nearly 70 percent of respondents cited virtual and cryptocurrencies as the highest tech-related risks that they face, followed by robo-advisers, blockchain and robotic process automation application programming interfaces.
  • When asked what trends, areas or functions presented the most potential for legal risks, the vast majority of respondents—69 percent—cited dealing with data. Cybersecurity and a changing regulatory environment were also seen as significant risks.   
  • Almost half of respondents viewed fintech firms as partners and 72 percent of organizations said they need fintech to stay competitive. At the same time, though, only 39 percent believed fintech was necessary for their survival.