Three-quarters of General Counsel oppose a stricter regulatory regime but four-fifths are still taking steps to prepare for a tsunami of compliance requirements

NEW YORK, Aug. 20 /PRNewswire/ -- The ninth annual legal study by Corporate Board Member and FTI Consulting (NYSE: FCN) has revealed deep-seeded concern among General Counsel over the pending wave of tough new regulatory measures that are expected to emerge in response to the recession and financial crisis.

In this year's report, 76% of general counsel said they do not favor a more robust regulatory regime and 65% do not believe increased regulation will prevent further economic deterioration, suggesting a deep skepticism about recent regulatory overtures from the government. However, despite their concerns, the General Counsel surveyed are also pragmatic with 86% claiming to have taken steps to prepare for a stricter legal and regulatory environment.

In recent months regulators have vetted proposals impacting everything from shareholder proxies to executive compensation to audit control in an attempt to deter future meltdowns and promote ethical corporate stewardship. These proposals have elicited great debate, as legislators, shareholders and corporate directors now try to determine which actions will promote positive, long-term economic stability.

"General counsel are gearing up for a tighter regulatory environment despite real skepticism as to whether some proposed new regulations are appropriate," said Neal Hochberg, Senior Managing Director and Leader of FTI's Forensic and Litigation Consulting segment. "In many companies, GCs are the de-facto Chief Risk Officers and their overwhelming concern about regulatory proposals is telling. In practical terms however, GCs still have a job to do despite their concerns, and are now looking for options to help manage a burgeoning work load."

While GCs question the need for stricter business regulation, about half (52%) of the survey respondents believe Congress should investigate where the responsibility lies for the current financial crisis. Similarly, 51% of corporate directors agree that an investigation by Congress is warranted.

Not surprisingly, regulatory compliance ranked highest among a list of issues general counsel say will add the most workload to their department over the next 12 months, with 65% saying they need to spend more time on compliance this year compared to last year, more than double the response two years ago.

Moreover, the management of outside legal fees rated as general counsel's top concern in 2009. "Even before the current recession began, and certainly before the low point of the recession this past autumn and winter, legal costs have been a central issue for GCs and directors," said FTI's Hochberg.