Key insights:

• • • Getting at the core legal question 鈥� In a case brought by defendant Ongkaruck Sripetch, the Supreme Court is deciding whether the SEC must prove investors suffered measurable financial loss before courts can order disgorgement, which would require fraudsters to give up illegal profits.

    • Why it鈥檚 high-stakes 鈥� Disgorgement is a major SEC enforcement tool 鈥� representing billions of dollars annually 鈥� so a new requirement to prove investor losses could sharply limit when and how much the SEC can recover.

    • How the justices seemed to lean (so far) 鈥� Questions at the argument before the Court suggested skepticism toward Sripetch鈥檚 position, with several justices asking why it would be an unfair penalty to take back ill-gotten gains and noting the practical difficulty of proving each investor鈥檚 exact loss.

If you鈥檝e ever wondered how the U.S. Securities and Exchange Commission (SEC) actually gets money back after it catches a fraudster, one of its biggest tools, disgorgement, is now under the microscope. This week, the U.S. Supreme Court heard arguments in a case, Sripetch v. SEC, that sounds technical on paper but has at its core a simple question: When the SEC makes a fraudster give up illegal profits, does it have to prove that investors suffered measurable, out-of-pocket losses first?

The case centers on Ongkaruck Sripetch, who the SEC says pocketed illicit proceeds through a classic pump-and-dump scheme from 2013 to 2017. Pump-and-dumps often involve penny stocks in which a person will hype up the price of these thinly traded stocks, then sell into the price spike they caused and walk away richer. Other stock traders who bought into the hype are the ones left holding the bag.

Sripetch admitted violating securities law and, in his subsequent criminal case, was sentenced to 21 months in prison. Separately, in the SEC鈥檚 civil action, a federal court in California ordered Sripetch to repay more than $3 million in ill-gotten gains plus interest.

The Supreme Court case isn鈥檛 a serious argument against the SEC鈥檚 ability to seek disgorgement 鈥� numerous courts have recognized the remedy for years, and Congress has since written the SEC鈥檚 ability to pursue it into federal law. The core question in the case is narrower, yet crucial for the SEC鈥檚 mission. It asks whether the SEC must show that victims suffered pecuniary or economic harm before a court can order disgorgement. Federal appeals courts have split on that point, which is why the Supreme Court agreed to take the case.

What is disgorgement, exactly?

Think of disgorgement as a legal give it back order. If a person or company makes money by breaking the securities laws 鈥� say by manipulating prices, lying to investors, or running a Ponzi-style scheme 鈥� disgorgement is designed to strip the profits away from that wrongdoing and the wrongdoers. In theory, it鈥檚 not about punishing someone for being bad, rather it鈥檚 about making sure crime doesn鈥檛 pay.

In real markets, harm can be scattered across thousands of trades, mixed up with normal price swings, and hard to trace to one bad actor. Disgorgement, on the other hand, gives securities regulators a way to focus on the part that鈥檚 often the clearest: How much ill-gotten profit the fraudster made.

Indeed, that not a punishment framing is important because the SEC has other ways to punish those convicted of securities law violations 鈥� such as civil penalties, disbarment from serving as an officer or director, industry suspensions, and more. Disgorgement is supposed to be different 鈥� an action that aims at profits, not pain. The government鈥檚 position in the Sripetch case puts it bluntly: Disgorgement is meant to strip ill-gotten gains from wrongdoers, not to compensate victims for their losses.

And disgorgement is not a niche tool. The SEC regularly collects big sums of seized money through disgorgement. According to recent figures, the SEC obtained about $1.4 billion through disgorgement in fiscal 2025 (excluding certain amounts), and $6.1 billion the year before, which represented nearly three-quarters of its total financial penalties for that year.

Those numbers may help explain why this Supreme Court fight is being watched so closely: The outcome could either keep the SEC鈥檚 playbook intact or force it to do a lot more legwork before it can ask courts to order payback.

The arguments before the Court

Earlier this week, both sides argued before the Supreme Court as to the potential future use of disgorgement and what requirements the SEC might have to meet when requesting court to order it.

Sripetch鈥檚 argument 鈥� Lawyers for Sripetch told the Court that the SEC shouldn鈥檛 be able to get disgorgement unless it can show that investors actually suffered financial harm, such as a price drop caused by the fraud or some other measurable loss. If the SEC can鈥檛 prove that kind of harm, the lawyer argues, then making Sripetch pay money looks less like giving it back and more like an impermissible penalty that the SEC is not allowed to levy.

The government鈥檚 argument 鈥� Lawyers for the U.S. Justice Department, defending the SEC, said the proof-of-loss requirement makes no sense. Disgorgement, in their view, is about the defendant鈥檚 gains, not the victim鈥檚 losses. One government lawyer summed it up as a straightforward principle: Disgorgement is intended to ensure a defendant does not profit from their own wrongdoing.

At this week鈥檚 argument, the justices sounded (at least generally) more sympathetic to the government than to Sripetch. Justice Amy Coney Barrett pressed the defense on its basic logic: If the court is only taking away ill-gotten gains 鈥� money the wrongdoer was never entitled to 鈥� why is that a penalty at all? Justice Ketanji Brown Jackson made a similar point, suggesting disgorgement would only feel like punishment when someone is forced to pay money that was rightfully theirs.

When Sripetch鈥檚 lawyer suggested the SEC should have to identify and prove each victim鈥檚 dollar loss, Justice Sonia Sotomayor鈥檚 response was basically, Why would anyone bother? If the SEC has to run a mini-trial on every investor鈥檚 exact harm just to reclaim the fraudster鈥檚 profits, disgorgement would be unworkable in many cases.

The practicality of that point is a big deal in securities fraud. In real markets, harm can be scattered across thousands of trades, mixed up with normal price swings, and hard to trace to one bad actor. Disgorgement, on the other hand, gives securities regulators a way to focus on the part that鈥檚 often the clearest: How much ill-gotten profit the fraudster made. The idea is deterrence-by-math 鈥� if you can鈥檛 keep the profits, the incentive to run the scheme shrinks.

The Supreme Court’s ruling, when it comes, could re-shape how the SEC negotiates settlements, litigates fraud cases, and talks about remedies and punishments going forward.

Still, some justices raised broader concerns about how disgorgement gets used in the real world, such as whether certain applications start to look punitive, or whether they raise questions about a defendant鈥檚 right to a trial by jury. However, the Court also seemed interested in deciding only the question of the requirement to prove victims鈥� losses and leaving those bigger constitutional debates for another day.

Why this matters (even if you aren鈥檛 the SEC)

If the Supreme Court agrees with Sripetch and requires proof of investor pecuniary harm, the SEC could face a higher hurdle in cases in which misconduct is real, but losses are tough to quantify on a trade-by-trade basis. That could mean fewer disgorgement awards, smaller ones, or more pressure to rely on classic penalties instead.

If the Court backs the government, however, disgorgement stays what it has largely been 鈥� a fast, flexible way to reclaim profits from securities fraud and a core part of how the SEC tries to keep the securities markets honest.

Either way, the ruling will shape how the SEC negotiates settlements, litigates fraud cases, and talks about remedies and punishments going forward. With the Court expected to issue its decision by the end of June, securities lawyers and stock market mavens will be keeping an eye on this case.

You can find more about the challenges facing the SEC here

Key insights:

• • • Human rights and environmental sustainability in sports are inseparable 鈥� Environmental harms from major sporting events 鈥� such as pollution, extreme heat, and flooding 鈥� directly undermine fundamental human rights including health, housing, and safe working conditions.

    • Mega sporting events require an integrated, lifecycle-wide approach 鈥� From supply chains and stadium construction to urban planning and event delivery, the sports industry鈥檚 environmental footprint and human rights impacts span the full lifecycle of these events, demanding a single, integrated playbook.

    • Accountability extends to sponsors and partners, not just hosts and organizers 鈥� As scrutiny from regulators, media, and civil society grows, sponsors and corporate partners are increasingly seen as responsible for the combined human rights and environmental impacts of the events they support.

This blog post was co-written with Sreeratna Kancherla and Anna J. Christians of the Henekom Group.

Sports are entering a defining decade. The convergence of climate and nature risk, growing environmental accountability, and increasing scrutiny of how mega sporting events affect the communities that build and host them has brought a long-overdue challenge to the center of sports governance.

Due to their scale, frequency, and global reach, the upcoming FIFA World Cup 2026 and the 2028 Olympics to be held in Los Angeles, alongside competitions such as the 2027 Rugby World Cup and the ICC Men’s T20 World Cup, form part of an ambitious pipeline of major events in a generation. How the sports sector responds to that challenge will shape how the next era of global sport is planned, delivered, and remembered.

Human rights due diligence during mega sporting events and environmental sustainability are often thought of as neighboring agendas, related but managed separately. In practice, however, they are inseparable. When air quality deteriorates, the right to health is at stake. When flooding displaces communities, the right to housing and livelihood is at stake. When extreme heat makes outdoor labor dangerous, the right to safe working conditions is at stake.

The environment is the condition in which human rights are either protected or violated, and sustainability, properly understood, is the commitment to preserving those conditions for current and future generations.

The need for an integrated playbook

The case for an across the lifecycle of sport reflects the scale and complexity of the sporting industry鈥檚 impact, with emissions comparable to those of a midsize country, according to . The industry’s heavy reliance on plastics across stadiums, equipment, and apparel contributes to pollution that worsens the global environmental crisis. And those environmental choices carry human consequences at every stage, for the workers who build the facilities, the residents who live alongside them, and the fans who attend the events.

The environmental footprint of the sports industry touches people across the entire lifecycle of a major event. The supply chains necessary to deliver a mega-sports event span facility development, apparel, technology, and food & beverage. These industries are among the highest risk for labor exploitation, migrant worker abuse, and unsafe working conditions. When a host city builds a stadium and hosts events there, the environmental impact is measurable and so is the human rights impact on the workers building the stadium. Indeed, this impact extends to the neighborhoods that may be displaced to make room for it, and to the residents left to live alongside its infrastructure once the event has ended.

You can find more about the resources, tools, and information that cities and organizations need to address听human trafficking around large-scale sporting events at the 成人VR视频 Institute鈥檚 Large-Scale Public Events Toolkit here

In addition, major events that rely on street circuits or temporary urban infrastructure can significantly reshape public space and surrounding neighborhoods. Air pollution, construction zones, and rising short-term rental demand also may displace residents and the unhoused population, restrict access to services, or place pressure on already fragile housing markets. In these cases, mega-sports event planning intersects directly with citizens鈥� rights to housing, mobility, and access to public space.

Expanding accountability

, rooted in the , is the structured process that makes those consequences visible and gives sustainability strategy its human accountability. Because environmental and human rights impacts are inseparable in practice, that accountability extends beyond organizers and host governments to the sponsors and corporate partners of the event. Many operate in sectors which already face scrutiny over their global supply chains; and therefore, alignment with a contentious event can amplify these vulnerabilities while inviting additional public and regulatory attention.

As the regulatory landscape, advocacy groups, and the media intensify their focus on the impact of these mega-sport events, sponsors are increasingly seen not only as influential stakeholders, but as actors with a degree of responsibility for the combined environmental and human rights impacts of the events they fund and support.

Moving from principle to practice

For example, Mercedes-Benz Stadium in Atlanta 鈥� home of the NFL鈥檚 Atlanta Falcons along with a venue for soccer and concerts 鈥� demonstrates that environmental performance and community impact are the same priority and can be pursued through a single design brief. Indeed, it was the first stadium worldwide to receive for zero waste, and its 2.1-million-gallon system helps prevent flooding in neighboring communities. Additionally, the stadium created targeted employment through the and delivered staff training to more than 700 people.

The same integrated logic is now being applied at the event level. Ahead of the FIFA World Cup 2026, host city organizing committees in Houston and Dallas introduced听that address labor exploitation, including human trafficking risks, alongside targeted environmental measures. These measures are treated as a single procurement workstream to be addressed through an integrated response.

Leadership, legacy & the decade ahead

The organizations that will define the next decade of global sports are those that treat human rights and environmental sustainability not as parallel strategies but as two expressions of the same obligation to the people and communities on which sports depend.

This means designing facilities with both environment and humanity in mind from the outset, managing worker rights and environmental standards together across supply chains, and placing extreme heat measures, labor protections, community access, and sustainability targets within a single accountable governance framework.

Governing bodies, organizing committees, sponsors, and host cities that act on this integrated approach have the opportunity to build systems that are more responsible, more durable, and more trusted to define what credible and future-ready sports event management looks like.

You can find more about the impact of mega-sporting events on communities here

Key takeaways:

• • • Corporate legal AI strategies should start with business goals, not just efficiency 鈥� While many corporate law departments first adopt AI for internally-focused use cases, the bigger opportunity is to align AI with broader business priorities such as revenue growth, risk reduction, and improved operational performance.

    • GCs should measure AI success by business impact 鈥� Metrics such as time saved and tool usage help, but stronger AI metrics connect legal work to business results. In contract review, for example, success may be reflected in improved win rates, reduced revenue leakage, faster deal completion, or dollars of risk avoided.

    • A strong legal AI strategy should produce multiple forms of business value at once 鈥� The most effective approaches do not focus on a single benefit such as cost savings. Rather, they aim to improve service delivery, strengthen operations, support growth, and reduce risk across the business.

Over the past several years, corporate law departments have begun to rapidly adopt AI tools, often spurred on by company-wide AI initiatives. In fact, in just the past year alone, department-wide AI adoption has risen to nearly half (47%) of all departments, according to respondents surveyed for 成人VR视频 Institute (TRI) research.

However, it鈥檚 not enough to simply adopt technology. For AI to truly make an impact, it needs to be integrated strategically. In taking this strategic approach, however, GCs and other legal department leaders are still in the early stages.

According to findings from TRI鈥檚 2026 State of the Corporate Law Department Report, more GCs are focused on technology than ever before. When asked their top strategic priorities over the next year, 28% answered that technology was a top priority, double the portion that prioritized technology just one year ago. And out of those mentions of technology, a vast majority specifically referenced AI as a primary area of focus.

Historically, many legal departments have thought about AI from an internal efficiency standpoint, leveraging it to perform their work quicker and cheaper. Increasingly, however, C-Suites are looking to their legal departments to provide more effective business counsel and connect legal analysis to business outcomes 鈥� and, not surprisingly, they鈥檙e expecting AI to play a role in that shift.

So how can GCs effectively make AI a priority not only for the legal department but also for the entire business? It starts with broadening the potential impact of AI processes.

From unlocking to deploying capacity

Still less than four years since the public release of generative AI (GenAI) tools through ChatGPT, many corporate legal departments are still in the early days of rolling out the technology. As a result, most GenAI use cases still tend to focus on low-hanging fruit such as document summarization and review, contract drafting and review, research, and more.

This is understandable from an individual use case standpoint. The problem is, when these use cases are translated to the leadership level for overall strategic guidance, many GCs remain focused on how to maximize the gains from that low-hanging fruit. According to TRI research, less than 20% of corporate law departments measure return-on-investment from AI at all, meaning many departments are using AI tools without any sort of guiding measurement around what success should look like. And even among those departments that are measuring AI success, most of the metrics they use center around internal department usage or department cost savings from the tool.

Those measurements are more helpful than no tracking at all, to be sure. They focus on how AI is unlocking capacity for the legal department and look for ways that attorneys can perform their work more efficiently than before. Indeed, the majority of legal departments that have invested in AI tools are currently at this point.

However, there is an additional step that legal departments need to take in order to full take advantage of the strategic value of AI. And that is connecting AI鈥檚 use to that of larger business goals by deploying the capacity it has unlocked. This requires thinking about AI less in terms of how it will impact the legal department, and more in terms of how it will impact those that the legal department serves.

For example, take a common AI use case such as contract review. Currently, the most common measurement around contract review technology is speed, such as how quickly the legal department can help a contract go from start to signature. Maximizing that value can improve the efficiency of the department, to be sure. But C-Suite partners aren鈥檛 necessarily looking for an efficient department as the end goal 鈥� they鈥檙e looking for business success.

As a result, some forward-thinking GCs are looking to connect AI usage directly with business goals or revenue. For contract review, that could mean demonstrating the impact on overall contract win rate, or whether close rates increased through use of AI. Or it could mean more successful revenue leakage protection; and it could even mean risk avoidance, measured in dollars of risk avoided. All of these can demonstrate value and be connected to the rest of the business.

Further, all of this requires close collaboration with other business units, both in terms of sharing metrics as well as understanding what success throughout the organization should mean to all parties. That said, GCs have told TRI for countless years that breaking out of a silo is a top priority for the legal department. In this case, AI implementation should be no different.

Wide areas of impact

As it currently stands, corporate law departments are seeing the most impact from AI in areas of efficiency and time saved. More than three-quarters of GCs who have talked with TRI say that AI is either currently benefiting the department鈥檚 efficiency and productivity, or that they鈥檙e expecting those benefits to occur within the next 12 months.

Connecting AI outcomes with business imperatives provides more areas of improvement, however. In this year鈥檚 State of Corporate Law Department Report and elsewhere, TRI breaks down the law department鈥檚 role into four key functions that we call the four spinning plates:

1. 1. 1. Provide effective legal services and operational excellence
      2. Offer efficient legal value within budget
      3. Enable business and strategic growth, and
      4. Protect the business鈥檚 assets and competitive advantage.

AI鈥檚 impact on efficient legal value is clear; but GCs are beginning to see that it can actually impact all four of those plates.

Those GCs looking to adopt AI as a strategic goal should be aware that said strategy should encompass more than simply internal efficiency. Not all of these benefits will be applicable to all departments, but all departments should be considering more than just one of these areas. An effective AI strategy should have multiple benefits in mind 鈥� and as such, it should take into account multiple business factors when measuring the success of the department鈥檚 AI strategy.

Entering into an AI strategy is a laudable goal for today鈥檚 GCs, but also not a light undertaking. When thinking about how AI will impact the department, leaders should take the next step beyond deploying capacity into unlocking capacity, helping attorneys not only work more efficiently but also make a bigger impact on the business at large.

You can download a full copy of the 成人VR视频 Institute鈥檚

Key takeaways:

• • • Your post-OBBBA forecasts should look different 鈥� If the tax department doesn’t own the OBBBA model, someone else will own the OBBBA story.

• • • Rely on your department鈥檚 inner strengths 鈥� It鈥檚 governance and analysis 鈥� not tools 鈥� that get you into the strategy room.

    • Factor in the conflict in the Middle East 鈥� The Iran war risk belongs in your tax model, not just in your CFO’s macro deck.

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, enacted large business tax cuts, most notably by providing permanent full expensing of many forms of investment. Under the previous major corporate tax legislation, 2017鈥檚 Tax Cuts and Jobs Act (TCJA), bonus depreciation was scheduled for gradual phase-out following 2023. The OBBBA restored that expensing 100% retroactively for assets acquired from mid-January 2025 onwards.

The after-tax cost of new machinery, fleets, and equipment has effectively fallen by around 21%, designed to encourage immediate capital outlays by allowing businesses to write off these expenses in the year they are incurred rather than amortizing them over five years.

For corporate tax departments, that’s not a disclosure footnote 鈥� that’s your capital plan.

Capital-intensive corporations will see tax burdens reduced through permanent rate extensions, depreciation adjustments, and expansion of the state and local tax (SALT) deduction cap 鈥� but only if your models are built to capture the timing and location of investment, the mix of debt compared to equity, and where your organization books its next dollar of income.

Not surprisingly, most corporate tax departments aren’t there yet. They’re still recalculating last year, plus a few adjustments. That’s glorified compliance, not modeling.

A standout tax department doesn’t ask, What’s the OBBBA impact? Rather, it asks, Which version of OBBBA do we choose for this business? 鈥� and it has the models to back it up.

From spreadsheet heroics to controlled modeling

For many organizations, tax modeling still means creating a massive spreadsheet that only one director truly understands. The spreadsheet gets pulled out for budget season, rebuilt under pressure, and quietly retired until next year. That’s a single point of failure, not a process.

And after OBBBA, continuing that practice is dangerous. One wrong assumption on expensing or interest limitation can move cash tax by millions of dollars and blindside the Finance Department.

Here’s what disciplined modeling looks like in practice:

• • • Create a unified model 鈥� Build one integrated model that the whole team can use or accept that your department is choosing to fly blind.
    • Use the same assumptions 鈥� Standardize the levers that matter most (such as capex timing, financing mix, jurisdiction, and incentives) and make sure every scenario runs off the same assumptions.
    • Conduct modeling reviews 鈥� Treat major OBBBA-driven decisions (such as large capex, funding shifts, supply-chain redesign) as tax deals that must go through a modeling review before they’re greenlit.
    • Document your assumptions explicitly 鈥� Under permanent full expensing, the difference between a well-supported assumption and a poorly documented one isn’t just an audit risk, rather it’s a credibility problem with your CFO.

It鈥檚 also important to remember that in a post-OBBBA world, this level of disciplined modeling is not technology transformation 鈥� it鈥檚 basic survival.

Governance: Where leaders quietly win or loudly fail

The differentiator isn’t which corporate tax department has the fanciest tool 鈥� it’s which one has the cleanest governance. And the data is unambiguous: More than half (55%) of tax departments are still in the reactive phase of their technological development, stuck with five capex models circulating with five discount rates and the tax team arriving late to the planning meeting.

Those tax departments that are breaking out of that pattern share one trait: They put someone formally in charge. In the 成人VR视频 Institute鈥檚 recent 2026 Corporate Tax Department Technology Report, a large portion (88%) of survey respondents said their company had appointed a person to lead the tax department’s technology strategy. That number jumped a whopping 37 percentage points, from 51%, from the previous year鈥檚 survey. That single structural move separates those departments with a governance model from those that simply hold a governance conversation every budget cycle and forget about it.

Clearly, this type of ownership drives results. Two-thirds of those surveyed agreed that their company’s investment in technology has enabled a shift from routine, reactive work to more strategic, proactive, higher-value work.

Under OBBBA, the kind of governance isn’t housekeeping. It’s how you get invited into strategy discussions instead of having to clean up after things go awry.

Why your OBBBA win may not feel like a win

On paper, the tax changes embedded in the OBBBA look generous. In practice, your effective tax benefit is colliding with something you don’t control.

When the war on Iran began, all shipping through the Strait of Hormuz was effectively halted, removing roughly one-fifth of the world’s oil and gas supply from the market. Fuel prices throughout the world spiked and are likely to remain elevated as long as conflict persists.

With oil prices hovering around $100 a barrel, there are will wipe out the benefits of higher tax refunds this year for most Americans. If those benefits, arising from Trump’s 2025 tax cuts, are erased for the average American, only the top 30% of taxpayers will still seeing a net gain.

For corporate planning purposes, the parallel dynamic is real: The topline OBBBA benefit is being eroded by higher fuel, freight, and financing costs across the business and its supply chain.

Inflationary pressures are being driven by higher energy prices tied to the Iran war, and the conflict’s impact on a wide range of goods and services is likely to last for months 鈥� with experts saying even a ceasefire is unlikely to immediately ease global energy shortages.

A serious corporate tax department doesn’t handwave these concerns away. It takes three actions:

1. 1. 1. Run a war-extended scenario 鈥� The scenario should show exactly how sustained higher energy costs and borrowing rates change the payoff from accelerated expensing and leverage 鈥� with specific numbers, not just directional commentary.
      2. Share your forecasts internally 鈥� Put your monthly or quarterly cash-tax forecasts on the table for Finance to see, so that it can manage liquidity rather than hope the annual plan holds.
      3. Force the hard conversation 鈥� Ask the tough question: At today’s rates and fuel costs, the after-tax return on this project is X. Are we still in? That question should come from the tax team now, not from the finance team six months later.

Clearly, the daily fluctuations in oil prices matter less than monthly and quarterly averages 鈥� and volatility will likely remain elevated given the absence of a clear timeline for the end of the war. That’s exactly the kind of sustained uncertainty that belongs front and center in your scenario set, not in a footnote.

The bottom line

The OBBBA gives corporate tax departments a genuine opportunity to move from being simply a compliance function to becoming more of a strategic advisor. Permanent full expensing, richer cost recovery, and more flexible interest rules can create real levers to add value, but only for those organizations that model them rigorously, govern them cleanly, and stress-test them against the macro environment their business actually faces today.

Indeed, the Iran war is a live test of that readiness. The corporate tax departments that show up with modeled scenarios, cash-tax forecasts, and a clear point of view on after-tax returns will earn a seat at the strategy table. The ones that show up with caveats will be asked to leave it.

You can download a full copy of the 成人VR视频 Institute鈥檚 recent 2026 Corporate Tax Department Technology Report here

Key takeaways:

• • • Country-by-country reporting will only increase in complexity 鈥� Australia’s enhanced Country-by-country reporting (CbCR) requirements 鈥� reconciling taxes accrued against taxes credited 鈥� are a preview of where other high-scrutiny jurisdictions are heading, and companies need to build that explanatory analysis capability now, systematically, rather than scrambling later.

    • There has to be a shared narrative from corporate teams 鈥� The EU鈥檚 public CbCR is a reputational event, not just a filing. So that means tax, communications, and investor relations teams need a shared narrative before the data goes public 鈥� inconsistencies create exposure you do not want to manage reactively.

    • Rethink your filing jurisdiction in light of changes 鈥� If EU filing jurisdiction was chosen at initial implementation and never revisited, look again. Guidance has matured, and a more efficient or better-suited option may now be available.

WASHINGTON, DC 鈥� Among the many pressing topics discussed in detail at the recent , country-by-country reporting (CbCR) and its ability to reshape the corporate tax industry, certainly had its place. Between escalating local jurisdiction requirements, the , and for deeper explanatory disclosures, CbCR has quietly evolved from a transfer pricing filing obligation into something far more strategically consequential.

The floor is just the floor

The creation of the by the Organisation for Economic Co-operation and Development (OECD) was intended as a minimum standard for countries. And now jurisdictions are increasingly layering additional requirements on top of the OECD鈥檚 basic template, resulting in a widening gap between the standard requirements and what tax authorities actually want.

Currently, Australia is the most pointed example. Australian tax authorities are now requiring multinational groups to go beyond the standard CbCR data fields and provide explanatory narratives that reconcile taxes accrued against taxes actually credited. This requires corporate tax departments to bridge the gap between financial statement accruals and their organizations鈥� cash tax positions in a way that is coherent, defensible, and consistent with positions taken elsewhere.

At the TEI event, panelists explained that for tax departments this will carry complex timing differences, deferred tax positions, or significant jurisdictional mismatches between booked and cash taxes. Indeed, this additional layer of scrutiny will need dedicated attention.

The broader signal matters: Australia will not be the last jurisdiction to move in this direction. So that means that tax departments should treat Australia’s approach as a leading indicator of where other high-scrutiny jurisdictions could be heading. Building the capability to produce this kind of explanatory analysis systematically 鈥� rather than scrambling jurisdiction by jurisdiction 鈥� would be the smarter long-term investment for corporate tax teams.

Public CbCR in the EU: The transparency ratchet has turned

For US-based multinationals with significant European operations, the EU’s public CbCR directive has fundamentally changed the calculus. Unlike the confidential tax authority filings most corporate tax departments are accustomed to, the EU鈥檚 public CbCR rules put organizations鈥� jurisdictional profit and tax data into the public domain, making it visible to investors, journalists, civil society groups, and organizations鈥� employees and customers.

The EU framework specifies which entities trigger the reporting obligation and which entity within the group is responsible for making the public filing. That scoping analysis is not always straightforward for complex multinational structures and getting it wrong could present both reputational and legal risk.

Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data.

For US-headquartered groups, the implications extend well beyond Europe. Public CbCR data is now being read alongside US disclosures, reporting on ESG activities, and public narratives about tax governance. Inconsistencies, including those technically explainable, could create unwanted noise about the company. This is clearly another reason why the tax function should partner across the business 鈥� in this case with the communications team 鈥� to make they both are aligned to tell the CbCR story instead of being caught off guard by a journalist or an investor during an earnings call.

Questions that US multinationals should be asking

Fortunately, US multinationals with multiple EU subsidiaries are not required to file public CbCR reports in every EU member state in which they have a presence. Instead, under the EU framework, a qualifying ultimate parent or standalone undertaking can satisfy the public disclosure requirement through a single filing in one EU member state, provided the relevant conditions are met. Germany and the Netherlands have emerged as two of the more popular choices for this consolidated filing approach, given their well-developed regulatory frameworks and the depth of available guidance on what compliant disclosure looks like in practice.

The strategic implication is meaningful. Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data. Corporate tax departments that defaulted to a filing jurisdiction early in the EU implementation process should take a fresh look. Regulatory guidance has matured significantly, and there may be a more efficient or better-suited path available than the one originally chosen.

The uncomfortable divergence

There is a notable irony in the current environment. Domestically, the IRS and U.S. Treasury’s 2025-2026 Priority Guidance Plan reflects an explicit focus on deregulation and burden reduction, detailing dozens of projects aimed at reducing compliance costs for US businesses. Meanwhile, the international compliance environment has moved in the opposite direction, adding disclosure layers, explanatory requirements, and public transparency obligations that many US businesses cannot avoid simply because they are headquartered in the United States.

This divergence has a direct implication for how tax departments allocate resources and make the internal case for investment in international compliance infrastructure. The burden internationally is not going down 鈥� indeed, it is intensifying 鈥� and that argument is now backed by concrete examples rather than projections.

3 things worth doing now

There are several actions that corporate tax teams should consider, including:

Audit CbCR data quality with Australia’s enhanced requirements in mind 鈥� If you cannot readily reconcile taxes accrued to taxes credited at the jurisdictional level, that gap needs to be closed before it becomes an authority inquiry.

Revisit EU filing jurisdiction strategy 鈥� If your jurisdictional decision was made at the time of initial implementation and has not been reviewed since, it is worth a fresh look before the next reporting cycle.

Develop an internal narrative around public CbCR data before it circulates externally 鈥� Your company鈥檚 tax story should not be a surprise to the corporate teams involved in communications, investor relations, or ESG 鈥� and in today鈥檚 world, assuming such news stays quiet is no longer a safe assumption.

While CbCR started as a tool for tax authorities, it today has become something more visible, more public, and more consequential than that 鈥� and that trajectory is not reversing any time soon.

You can download a full copy of the 成人VR视频 Institute鈥檚

Key takeaways:

• • • Agentic AI poised for adoption uptick 鈥� Agentic AI is following GenAI’s rapid adoption in the legal industry, with less than 20% of firms currently implementing agentic systems but half planning or considering adoption in the near future, according to a new report.

    • Adoption depends on human oversight answers 鈥� Legal professionals are generally optimistic about agentic AI’s potential, but successful adoption depends on explicit guidance about human oversight and the lawyer’s role in maintaining ethical standards.

    • Time to retool AI education? 鈥� Agentic AI’s increased autonomy introduces new oversight and ethical challenges for law firms, making targeted education and clear guidance essential to understanding the differences from GenAI.

Over the past several years, law firms and corporate legal departments have turned towards generative AI en masse. At the beginning of 2024, just 14% of all law firms and legal departments featured an enterprise-wide GenAI tool. Just two years later, that number had already risen to 43% of all firms and departments, according to the 2026 AI in Professional Services Report, from the 成人VR视频 Institute (TRI). For large law firms or legal departments, those percentages 鈥� not surprisingly 鈥� are beginning to approach 100%.

With GenAI adoption now this widespread, legal industry leaders are now turning their attention to two primary initiatives. One, of course, is how to get the most out of the AI tools they already have 鈥� a task that is proving a bit elusive. Currently, less than 20% of lawyers say their organizations measure AI鈥檚 return-on-investment, and most corporate lawyers say they have no idea how their outside law firms are approaching AI. Thus, instituting not just AI tools, but also an AI strategy is the second top priority for law firms and corporate legal departments in 2026 and beyond.

However, even as the legal industry reaches a tipping point in adopting GenAI tools, technology innovation still continues unabated. Agentic AI has emerged as the next wave of innovation that could change how lawyers work on a daily basis, offering a way to autonomously complete multi-step tasks. For example, agentic AI systems are already being built for the legal industry that independently researches a regulation or law, drafts a document based on the finding, identifies pitfalls, and revises the document, with stops for human guidance only instituted as desired.

According to the AI in Professional Services Report, the legal industry is already making headway towards implementing agentic AI systems. For agentic AI to truly take hold in legal, however, lawyers still require more education around not only how it differs from the GenAI systems they already have in place, but also when and where human intervention needs to occur within an agentic system.

The early stages of agentic AI

Examining current agentic AI adoption for the legal industry almost takes one back in time 鈥� two years, to be exact. Following the public release of GenAI in late-2022, many legal industry organizations spent 2023 evaluating and experimenting with AI systems, usually with a small working group of interested guinea pigs. As a result, only 14% of survey respondents said their law firms or corporate legal departments were engaged in organization-wide GenAI rollouts at the start of 2024. However, more than half of respondents said their organizations expected to be rolling out large-scale GenAI systems over the next 1 to 3 years. The intervening two years since then have proved that prediction to be largely true.

Agentic AI usage in the first half of 2026 looks largely similar to GenAI in 2024. The legal industry started to experiment with agentic AI at the beginning of 2025, with an eye towards actual implementation in 2026 and beyond (particularly as legal software providers began to integrate agentic systems into their own products). As such, less than 20% of recent survey respondents say their organization is engaged in widespread agentic AI adoption, but with about half of respondents said their organization is either planning to use or considering whether to use agentic AI in the near future.

By and large, lawyers feel positive about the agentic AI movement. When asked about their sentiment towards agentic AI, 51% of legal industry respondents said they felt excited or hopeful, while just 19% said they felt concerned or fearful. Further, about half (47%) said they actively believe agentic AI should be used for legal work, while 22% felt it should not, with the remainder saying they were unsure. These figures largely track with the sentiments expressed about GenAI in 2024, which have only grown over time from about 50% positive two years ago to two-thirds of all legal professionals feeling positive currently.

This all lends further credence to a rise in agentic AI usage similar to what law firms and corporate legal departments experienced with GenAI over the course of 2024 and 2025. Indeed, when asked when they expect agentic AI to be a central part of their workflow, few have baked agentic systems into their daily work currently, but a majority of legal industry respondents expect it to be central within the next 3 to 5 years.

The unique barriers of agentic AI adoption

Agentic AI does differ from GenAI in one crucial area that may limit its growth potential within the legal industry, however 鈥� autonomy. By and large, GenAI systems operate on a back-and-forth basis: Users provide the tool a prompt, receive its output, and then iterate back-and-forth from there. Agentic AI is intended to be more automated by design, only requiring human input at pre-determined points in the process. And that makes some lawyers understandably nervous.

When asked why they might feel hesitant about using agentic AI for legal tasks, the most common answer was a general fear of the unknown, but the second most common answer dealt with the need for careful monitoring and oversight. In fact, some respondents said they were excited about GenAI, but more cautious about agentic AI鈥檚 potential.

鈥淎gentic AI, while exciting, to me removes oversight a step too far,鈥� said one such lawyer from a US law firm. 鈥淚 like the idea of prompting and reviewing a result. It is something else to have a machine have so much autonomy in the actual doing of a thing and potentially acting on my behalf without that very concrete review.鈥�

Agentic AI usage in the first half of 2026 looks largely similar to GenAI in 2024.

An assistant GC at a US company also pointed to potential privacy and security concerns, adding: 鈥淭he fact that agentic AI operates in a much more autonomous way, with a lack of control from the user, means there are many unknowns that are hidden beneath the process.鈥�

For law firm and corporate legal department leaders looking to potentially implement agentic AI systems into their practice, this means re-thinking what AI education and training will mean moving forward. Beyond that, however, legal AI educators also will need to make sure to pinpoint and perhaps over-explain those specific instances in which human oversight needs to occur in agentic systems. More autonomous does not mean fully autonomous, and particularly for lawyers with ethical duties to their work product, lawyer oversight will in fact be a necessary part of any agentic system.

For law firm or legal department leaders, that means that finding the right balance between efficient workflows and human intervention will be key to agentic AI adoption. And those organizations that can best communicate human-in-the-loop to their professionals up-front will be rewarded with more increased and reliable adoption.

Clearly, lawyers feel positively about the agentic AI future, after all. They just need it spelled out explicitly as to what the lawyer鈥檚 role will be in this new paradigm.

鈥淎gentic AI is powerful, but its moral compass must come from humans,鈥� one UK law firm barrister noted aptly. 鈥淟awyers are trained to safeguard fairness, rights, and the rule of law 鈥� principles that should guide how AI is designed, governed, and deployed. Hope lies in our ability to shape AI through these values for fairer values for society as a whole.鈥�

You can download a full copy of the 成人VR视频 Institute鈥檚听2026 AI in Professional Services Report听here

Key insights:

• • • Non-compliance is significantly more expensive than compliance 鈥� Data consistently shows the cost of non-compliance can be greater than proactive compliance investments.

    • Reputational damage and hidden costs often outweigh direct fines 鈥� Beyond financial penalties, the damage from legal fees, loss of customer trust, and operational disruptions from non-compliance can inflict long-term harm.

    • Strategic investment in compliance yields a competitive advantage 鈥� A robust compliance program builds trust, attracts investors, and demonstrates greater operational resilience in a complex regulatory landscape.

There’s a persistent myth in the business world that compliance programs are a necessary burden, a line item to be minimized and managed rather than invested in strategically. The data tells a very different story, however, and it has for quite some time. For organizations still treating compliance as an overhead expense, it’s time to reconsider the math and view the broader strategic picture.

The numbers don’t lie: Non-compliance costs more

Non-compliance costs are 2.65-times the cost of compliance itself, a finding that dates back to the of multinational organizations. While the average cost of compliance for the organizations in that study was $3.5 million, the cost of non-compliance was much greater. That means simply by investing in compliance activities, organizations can help avoid problems such as business disruption, reduced productivity, fees, penalties, and other legal and non-legal settlement costs.

According to a later report from from 2017 (the most recent set of analytical data on the subject), the numbers have only grown more striking. The study showed that average cost of compliance increased 43% from 2011 to 2017, totaling $5.47 million annually. However, the average cost of non-compliance increased 45% during the same time frame, adding up to $14.82 million annually. The costs associated with business disruption, productivity losses, lost revenue, fines, penalties, and settlement costs add up to 2.71-times the cost of compliance.

And these non-compliance costs from business disruption, productivity losses, fines, penalties, and settlement costs, among others aren’t simply abstract risks. They’re real, recurring, and measurable, and they don’t stop with the fine itself.

Beyond the fines themselves, legal costs are a significant and often underestimated component of non-compliance.

This gap between compliance and non-compliance provides evidence that organizations do not spend enough of their resources on core compliance activities. If companies spent more on compliance in areas such as audits, enabling technologies, training, expert staffing, and more, they would recoup those expenditures and possibly more through a reduction in non-compliance cost.

While the math here is straightforward, the strategic case is even clearer. Compliance isn’t overhead; rather, it’s an investment with a measurable, proven return.

The hidden costs: Legal fees, fines & reputational fallout

Regulatory fines get the headlines, but they represent only part of what non-compliance actually costs an organization 鈥� a cost that has only risen over time. As of February, a total of 2,394 fines of around 鈧�5.65 billion have been recorded in the database, which lists the fines and penalties levied by European Union authorities in connection with its General Data Protection Regulation (GDPR).

Beyond the fines themselves, legal costs are a significant and often underestimated component of non-compliance. Regulatory norms are shifting constantly and navigating them requires specialized expertise. As quickly as the rules change, outside counsel and compliance specialists must keep pace, and that knowledge comes at a price. Every alleged compliance violation triggers an immediate need to engage qualified counsel, adding to a cost burden that compounds quickly and unpredictably.

Then there is reputational damage, perhaps the most enduring consequence of all. The cost of business disruption, including lost productivity, lost revenue, lost customer trust, and operational expenses related to cleanup efforts, can far exceed regulatory fines and penalties. Consider , whose compliance failures around its anti-money laundering (AML) efforts became a cautionary tale for the industry. TD Bank’s massive $3 billion in fines from US authorities wasn’t just the result of a few missteps; rather, it was caused by years of deep-rooted failures in its AML program, pointing to a culture that prioritized profit over compliance.

The findings from both the 2011 and 2017 studies provide strong evidence that it pays to invest in compliance.

TD Bank’s failure to make compliance a priority not only led to a huge fine but also seriously damaged its reputation, with revising TD’s outlook to negative in May 2024, where it remains. This is the kind of a reputational stigma that can take years to repair.

Leveraging compliance as a competitive advantage

There is also a positive side of the ledger that often goes unacknowledged. A robust compliance program signals to investors, partners, and clients that an organization is well-governed and trustworthy. That reputation doesn’t just retain market value; it actively attracts it.

Organizations that cut corners in compliance risk engaging in a short-sighted, high-risk strategy that will ultimately result in a negative outcome for the organization. Businesses that take compliance seriously tend to operate with greater predictability, fewer surprises, and stronger stakeholder confidence.

The 2017 Ponemon and Globalscape and study found that, on average, only 14.3% of total IT budgets were spent on compliance then, not much of an increase from the 11.8% reported in 2011. This clearly indicates that organizations are underspending on core compliance activities in the short term and aren’t prepared to allot further resources as the years go on. That gap represents not just risk, but a clear missed opportunity.

“The findings from both the 2011 and 2017 studies provide strong evidence that it pays to invest in compliance,鈥� explains Dr. Larry Ponemon, Chairman and Founder of the Ponemon Institute. 鈥淲ith the passage of more data protection regulations that can result in costly penalties and fines, it makes good business sense to allocate resources to such activities as audits and assessments, enabling technologies, training, and in-house expertise.”

The organizations that recognize compliance as a strategic function, not a reactive one, are the ones that will earn the trust of clients, the confidence of investors, and the operational resilience to weather an increasingly complex regulatory environment. The data is clear, and the choice is a critical one.

You can find out more about the challenges faced by corporate compliance professionals here

Key takeaways:

• • • Anchoring distorts judgment before you begin 鈥� Research shows a first draft shapes subsequent decisions; and an AI draft is the most seductive anchor imaginable, because it looks exactly like something a lawyer would write.

    • The First Draft Trap inverts legal training 鈥� The Socratic method builds the habit of holding multiple possibilities in tension before committing; but an AI first draft collapses that space before the real thinking begins.

    • The fix is to ask for the map, not the draft 鈥� Requesting multiple strategic framings before writing keeps judgment where it belongs and uses AI to expand possibilities rather than foreclose them.

---

Welcome back to听The AI Law Professor. Last month, I examined why promised efficiency gains often become a cycle of work intensification. This month, I want to address a subtler challenge. I call it the First Draft Trap and understanding it may change how you reach for AI the next time a new matter lands on your desk

We have all heard the pitch: Staring at a blank page? Just prompt the AI. In seconds you have a working draft: structured, coherent, and surprisingly competent. The blank page problem, that ancient enemy of productivity, thus has been vanquished.

Except the blank page itself was never just an obstacle; rather, it was a space of possibility. For lawyers, it was the space in which the most important part of their work actually happens. Now, with AI in the mix, that may be changing.

Welcome to the First Draft Trap.

Simply put, the First Draft Trap is this: The moment you accept an AI-generated draft as your starting point, you have already made the most consequential decision of the entire project 鈥� most importantly, you made it by not making it. You let the machine choose your direction, your framing, and your theory. Everything that follows is editing; and editing, no matter how rigorous, is not the same as thinking.

The cognitive hijack

There is solid psychology behind why this happens. Daniel Kahneman and Amos Tversky demonstrated in their landmark 1974 paper, , that once people are exposed to an idea, this first impression distorts their subsequent judgments and becomes a mental anchor. In their experiments, subjects who watched a roulette wheel spin to a random number still let that number influence their estimates of completely unrelated quantities. The anchor held even when people knew it was meaningless.

Please join Tom Martin at the on April 28鈥�29. It鈥檚 virtual and completely free 鈥� two days of keynotes, panels, and workshops on AI and the legal profession

An AI first draft is the most seductive anchor imaginable. It is not random 鈥� it is plausible, and it is well-organized. It sounds like something a lawyer would write. And that is precisely what makes it dangerous. You know intellectually that it is just one of many possible approaches to addressing the matter, but the anchor holds anyway.

That is the First Draft Trap at the cognitive level. The AI draft is not just one option you happen to prefer. It is a filter that prevents you from seeing the other options that were available to you, the roads you never even noticed that you did not take.

Consider what this means for a profession built on the opposite instinct. From the first day of law school, lawyers are trained to resist the obvious answer and to think like a lawyer. The Socratic method exists for exactly this reason. A good professor hears your confident response and asks: What else? What if the facts were different? What is the argument on the other side? The goal is not to arrive at an answer, per se. It is to build the mental habit of holding multiple possibilities in tension before committing to any one of them.

The First Draft Trap is the anti-Socratic method. It delivers a confident answer before you have even formulated the question properly 鈥� and instead of interrogating it, you polish it.

The value of the blank page

Think about what a senior partner actually does when a junior associate brings them a memo. The partner鈥檚 value is not better writing; rather, it is peripheral vision: The ability to see what the memo does not address, the argument not considered, or the framing that would land differently with this particular judge or this particular jury. That capacity to see beyond the document in front of them is why clients pay senior partners premium rates. And it is precisely the muscle that atrophies when your default workflow begins with the prompt generate a draft.

The AI draft is not just one option you happen to prefer. It is a filter that prevents you from seeing the other options that were available to you, the roads you never even noticed that you did not take.

The two-system framework offered by Kahneman and Tversky gives us a clean way to describe what is going wrong. System 1 is fast, intuitive, and pattern-matching; while System 2 is slow, deliberate, and analytical. The practice of law, at its best, is a System 2 discipline. We, as lawyers, are trained to override gut reactions, challenge assumptions, and think through consequences before acting.

In this way, the AI first draft feels like a System 2 output. It is structured, footnoted, and methodical. However, your decision to accept it as a starting point is pure System 1 鈥� a fast, intuitive grab at the nearest plausible answer. You have used a sophisticated tool to bypass the sophisticated thinking the tool was supposed to support. That uncomfortable period of ambiguity, of not knowing which path is best, is where the real lawyering lives.

What to do instead

None of this means stop using AI. It means stop using AI to skip the hard part that matters.

Before you ever ask for a draft, ask for the map. Describe the matter or document you are working on, then ask the AI for three fundamentally different strategic framings for the problem. For each framing, request the strongest argument in its favor and its most serious vulnerability. Then ask which framing best fits the client鈥檚 goals, the audience, or the procedural posture. Close with a clear instruction: Do not write a draft yet.

That last instruction is the key. It keeps you in the driver鈥檚 seat during the phase that matters most. You are using AI to expand the possibilities before you prune them, not after. And, most importantly, it gives you the opportunity to think for yourself about other important possibilities and add them in.

In the terms used by Kahneman and Tversky, use AI to fuel System 2, not to hand the controls to System 1. Let the machine generate options, and you exercise judgment.

For lawyers, the ability to see what is not there is the whole game.

Do not let the first draft blind you to it.

Tom Martin is CEO & Founder of LawDroid, Adjunct Professor at Suffolk University Law School, and author of the forthcoming听. He is 鈥淭he AI Law Professor鈥� and writes this eponymous column for the 成人VR视频 Institute.

Key insights:

• • • A significant visibility gap persists between legal departments and the C鈥慡uite 鈥� Most general counsel believe their legal department contributes strategically, yet senior executives often fail to see or understand that value.

    • Strong internal relationship鈥慴uilding is critical (and often underdeveloped) 鈥� This capability enables legal teams to spot risks earlier, stay embedded in decision鈥憁aking, and make their work more visible across the business.

    • Closing the gap requires communicating legal鈥檚 value and increasing true AI fluency 鈥� For legal teams to be seen as proactive, strategic partners rather than task executors, communication and strong AI fluency are essential.

General counsel (GCs) have spent years doing more with less, tightening their legal spend, and aligning the law department鈥檚 priorities with the wider business. And yet, despite all of this effort, a striking visibility gap persists. While 86% of GCs believe their department is a significant contributor to overall organizational objectives, only 17% of the C-Suite agrees, according to the , from the 成人VR视频 Institute, which was based on more than 2,300 interviews with corporate general counsel. Meanwhile, 42% of C-Suite executives say the legal function contributes little or not at all to company performance.

The challenge for GCs is whether their staff have the skills and capabilities to make their work visible, relevant, and understood by the business at large. To address this perception gap in 2026, every GC needs to prioritize building richer internal relationships with business leads, moving from task-based to outcome-focused messaging, and improving the team鈥檚 collective AI fluency.

Empower teams to build internal relationships

Nearly half of all GCs surveyed for the report cited staffing and resource constraints as the top barrier to delivering additional value, a concern that has remained stubbornly consistent for years. Beyond headcount, the report underscores that the deeper challenge facing legal departments is relational.

Internal relationship-building is one of the most critical and underrated people skills in a legal department’s collective skill set. Indeed, 68% of GCs rate internal dialogue as their most valuable source of information about emerging risks. In fact, the most successful GCs use a deliberate combination of formal and informal methods to build connections with the internal business units that they serve.

You can learn more about how to assess your legal department鈥檚 strategic positioning with the听成人VR视频 Institute鈥檚 Value Alignment toolkit, here

Some run structured weekly face-to-face sessions with business departments, complete with schedules, plans, and frameworks. Others rely on walking the halls, open-door policies, and ad-hoc conversations that keep the corporate law department visible and accessible on a human level.

The report offers a five-dimensional framework to help GCs audit where, with whom, and how often legal is in dialogue with other parts of the business.

Use communication tactics that focus on business outcomes

Even when legal departments are doing excellent work, they often describe it in the wrong language. Many in-house lawyers categorize their contributions in task-based terms 鈥� such as 鈥淲e support M&A鈥� or 鈥淲e analyze contracts鈥� 鈥� rather than in value-creating terms.

Some in-house legal leaders have progressed to stakeholder-level framing, such as, 鈥淲e protect the company from competitive threats鈥� or 鈥淲e support new business opportunities.鈥� Still, neither of these levels truly communicates value to a C-Suite audience, the report shows.

To effectively align the law department’s priorities with business goals, in-house attorneys need to develop the skill of communicating through a business lens. For example, one GC states that the primary goal of the law department is to “find the fastest and most compliant way for the sales department to sell products.” This response reframes the legal function鈥檚 activities as much more business fluent and value-added.

Legal teams are not always good at touting their accomplishments, however, and this is a challenge when a lot of the work can be categorized as invisible. For example, when protecting the company is done right, threats are eliminated before they occur and no one notices. When efficiency is unlocked through process improvement, the C-Suite only sees the outcome if someone connects the dots explicitly. This is why surfacing invisible value is now a business imperative for corporate law departments.

Advancing from AI literacy to AI fluency

The most significant skills challenge facing legal departments in 2026 is how to best use AI strategically. Mentions of AI as a strategic priority among GCs have doubled in the past year, according to the report. In fact, almost half of all GCs now reference AI in their survey interviews. Yet the report draws a sharp distinction between being AI literate and being AI fluent, with most departments being the former but not the latter.

To close that gap, the report recommends a six-layer model covering learning, empowerment, ownership, accountability, usage, and expectations.

At its core, the model asks GCs to start with open encouragement and access to AI tools to build momentum, then shift toward more formal expectations around adoption to make AI use a daily habit.

You can download a full copy of the 成人VR视频 Institute鈥檚 here

Key takeaways:

• • • Human trafficking is a financial crime 鈥� Without the financial system, human trafficking networks cannot operate at scale. Banks, compliance officers, money transmitters, and casinos are uniquely positioned to detect suspicious patterns.

    • The 2026 World Cup amplifies existing risks 鈥� With 5.5 million additional visitors expected in Mexico City alone, criminal networks will exploit the surge in cash flows, new customers, and cross-border movement.

    • Red flags are observable in financial behavior 鈥� Human trafficking networks often leave detectable financial footprints, which is why financial institutions must update monitoring systems and stay alert to unusual transaction spikes during the tournament.

MEXICO CITY 鈥� As the 2026 FIFA World Cup get ready to hold its tournament in June and July across three North American countries, anti-human trafficking experts are meeting as well and attempting to address the challenges facing the three host countries of the largest World Cup in history.

To that end, the Association of Certified Anti-Money Laundering Specialists (ACAMS), in partnership with 成人VR视频, organized one such event, focused on the scourge of human trafficking that often surrounds large sporting events like the World Cup.

One speaker at the event noted an important clarification in the difference between human trafficking and human smuggling 鈥� two terms that are frequently confused yet carry vastly different legal and humanitarian implications. The key distinction lies in consent and the nature of the crime. In human smuggling, the individual being transported across borders consents to the movement, typically driven by socioeconomic necessity, and the offense is considered a crime against the state. Human trafficking, by contrast, is a crime committed directly against the victim, often involving exploitation through force, coercion, threats, or deception, and does not require the crossing of any international border.

The ACAMS event challenged the common belief is that human trafficking is exclusively sexual in nature. In fact, there are 10 additional forms of exploitation beyond sexual abuse, including slavery, forced labor or services, use of minors in criminal activities, forced marriage, servitude, labor exploitation, forced begging, illegal adoption of minors, organ trafficking, and illicit biomedical experimentation on human beings.

As the World Cup approaches, financial institutions鈥� compliance teams must recognize that the same operational conditions that make major sporting events exciting are precisely the conditions that money launderers and traffickers seek to exploit.

Still, sexual exploitation remains the dominant form of human trafficking. Indeed, it is the second most lucrative illicit business in the world after drug trafficking, with every 15 minutes of sexual abuse of a trafficking victim generating approximately $30.

Of course, without clients, there is no demand, said one speaker from the 脕GAPE Foundation, an organization that works to raise awareness against gender-based violence and human trafficking.

Financial sector as a key line of defense

When identifying human trafficking, it鈥檚 wisest to examine it from a financial perspective to find important indicators, according to several speakers. Indeed, the financial sector plays a critical role given its capacity to detect suspicious accounts and payments, shell companies, cash movements, digital platforms, and commercial operations.

For example, when a customer opens an account or conducts a transaction, certain red flags can be visible, including whether the customer needs to consult notes to answer basic questions such as their address or occupation, or that their responses are not spontaneous or natural. Also, another indicator is if the customer’s profile is inconsistent with the type or volume of transactions being conducted.

For financial institutions, there are other patterns that have triggered alerts in illicit activity in the past, including near-immediate deposits and withdrawals with no clear justification for the cash flow, or multiple individuals registered at the same address or linked to the same account.

Similarly, another red flag would be if there鈥檚 a high number of accounts opened from the same state or municipality with similar patterns, particularly in areas identified as origin points for trafficking networks; or, payment of multiple short-term rentals or payments abroad to unverifiable recruiters or employment agencies.

Financial institutions should be on the lookout for companies that file no tax returns or invoice simulated transactions, or that use of front men to open accounts or conduct operations.

Also, new businesses whose declared activity does not correspond to their financial operations should be flagged, as well as any frequent, large-volume purchases of condoms, lingerie, or women’s clothing inconsistent with the declared business activity.

Indicators at the 2026 World Cup

In the context of major sporting events such as the World Cup, existing risks are significantly amplified, several speakers pointed out. Sexual tourism, including the commercial sexual exploitation of children and adolescents, is a known and serious threat. Indicators that are relevant not only for the financial and banking sectors, but also for the real estate, tourism, transportation, hospitality, and restaurant industries including unusual accommodation requests, such as deactivating security cameras, delivering keys through third parties, or inquiring about the presence of neighboring guests.

When identifying human trafficking, it鈥檚 wisest to examine it from a financial perspective to find important indicators, and the financial sector plays a critical role given its capacity to detect suspicious accounts.

These industries should also be on the lookout for any adult or group of adults traveling with an unusually large number of minors, or individuals who travel in silence and are accompanied by someone who appears to exercise visible control over them.

As the World Cup approaches, financial institutions鈥� compliance teams must recognize that the same operational conditions that make major sporting events exciting 鈥� high transaction volumes, new customers, cross-border flows, and institutional attention diverted toward the event itself 鈥� are precisely the conditions that money launderers and traffickers seek to exploit.

For these compliance teams, monitoring systems must be updated, know-your-customer processes must go beyond documentation and reflect a genuine understanding of the client’s activity and context, and on-site verification visits must be conducted by personnel who know exactly what they are looking for.

The financial sector does not need to become an investigative body; however, it does need to remain alert, informed, and willing to report. Indeed, this is exactly what the compliance function exists for, and in the context of human trafficking, the cost of silence is measured not in fines or reputational damage, but in human lives.

You can find out more about the听challenges of hosting the 2026 FIFA World Cup here