The growing importance of ESG in the legal profession
Law firms and corporate legal departments are being challenged by the unprecedented growth of Environmental, Social and Governance (ESG) initiatives. In 2022, the Future Ready Lawyer Survey asked legal professionals about those demands, steps they are taking to address them and how prepared they are.
ESG has quickly emerged as a significant and specific demand on law firms and corporate legal departments, and it will continue to grow.
The impact of ESG in the legal sector
According to the 2022 Wolters Kluwer Future Ready Lawyer Survey law firms are positioning themselves to respond to increasing demand for ESG expertise, with 50% of law firms across Europe and the U.S. reporting that they created an ESG practice area in the past three years.
In addition, 27% of firms report having had an ESG practice for more than three years and 18% are planning to create an ESG practice within the next three years.
This comes as law firms are experiencing significant growth in ESG demand from clients:
- 45% of firms report demand for ESG guidance from corporate clients has increased over the past year; and
- 59% expect client demand for ESG guidance will increase over the next three years.
ESG initiatives: corporate legal departments
The need for creating and sharing ESG policies and procedures also is increasing among corporate legal departments. According to the Future Ready Lawyer Report:
- 56% of legal departments report that demands on them for ESG guidance have increased over the past year; and
- 64% expect their company’s demand for ESG guidance from the legal department will increase over the next three years.
84% of legal departments report increased requests for their company’s ESG policies from their law firms. 67% of legal departments also now ask their law firms to provide their ESG policies and sustainability credentials, with 30% more expecting to do so within the next three years.
However, significant growth in ESG demand is outpacing legal professionals’ preparedness to respond. Just 39% of lawyers say their department is very prepared to meet their company’s ESG responsibilities; only 20% of law firms believe they are very prepared to meet client demands for ESG services.
The Wolters Kluwer Future Ready Lawyer Survey 2022 offers a timely and unique perspective on law firms and corporate legal departments, with benchmark data pre- and post-crisis. The Survey includes insights from 751 legal professionals across 10 European countries and the U.S. The Report examines issues and trends affecting the future of law as organisations strive to thrive in the new normal. For more detailed information, including ESG and legal luminaries’ insights, download the Wolters Kluwer Future Ready Lawyer 2022 Survey >>