If legal red tape is interfering with your business, you are not alone. A new survey reveals that the current regulatory environment is making it more difficult to conduct business.
The “2015 Corporate General Counsel Survey” polled more than 250 in-house counsel who work in a wide range of industries. The survey specifically sought views on the key threats to business growth, most notably cybersecurity to regulatory compliance.
With regard to their business’s efforts to comply with current regulatory requirements, more than two-thirds of the respondents stated that the current regulatory environment made it harder to do business. Nearly 40 percent reported the current regulatory environment has diverted resources from the company’s core competencies. In addition, a significant percentage of the participating in-house lawyers believed that the current regulatory climate decreased profits or impeded growth (29 percent and 21 percent, respectively).
Making amendments to encourage change
In response to regulatory oversight and enforcement issues, in-house counsel reported that they are making changes to the way they manage risk
. The most common compliance activities were strengthening policies and procedures (70 percent) and increasing education and training (60 percent). The respondents also reported engaging outside advisers/consultants (41 percent) and adding internal compliance personnel (36 percent) to help manage risk. To reduce the regulatory burden, some respondents indicated that they are turning to technology. However, only 28 percent have implemented software tools and 21 percent have utilized data analytics.
The survey also revealed that many in-house lawyers remain unconvinced that the all of the extra work is worth it. While many report increasing compliance efforts, 91 percent of those that made changes to the way they manage their risk are still unsure whether their approaches are effective. The sentiment is especially prevalent with regard to cybersecurity. While nearly all of the respondents reported that they have taken measures to address cyber risk, only 17 percent believe that they are well prepared to address a data breach.
While lawmakers have been working to make the state more business friendly, New Jersey is notorious for its high cost of doing business. If you are contemplating forming or buying a business in the state, consulting with an experienced New Jersey business attorney
can help you cut through the red tape and take steps to ensure that you don’t face compliance problems down the road.