In Deloitte’s 12th Global Risk Management Survey, 40% of leaders pointed to these changes as a top concern for the future.  This shows how fast laws and policies are evolving, making it critical for legal teams to stay ahead of regulatory changes.

From data privacy laws and regulations to ESG standards and workforce policies, adapting quickly is key. A smart legal strategy doesn’t just manage risks—it creates opportunities.

Let's explore how regulatory change can upend companies and why your legal team sits at an intersection of risk mitigation and business growth.

How regulatory changes can affect companies

In-house legal teams, you’re the trusted guides for helping the business adapt to new rules and requirements, keeping everything running smoothly. These changes can have a big impact as they can reshape how the business works, affect profits, or even create new opportunities. Let’s take a closer look at how they affect companies and why your role is so important.

Also read: Leading Legal in Complex Regulatory Environments: Hardeep Singh, GC, CRED

#1 Financial and operational disruptions

Regulatory changes very often demand tremendous financial investment and lots of operational changes. Take the GDPR, for example. All companies in the world were supposed to renew their processes related to working with data; this means big expenses for IT, changing policies, and training. For instance, a €22 million fine against British Airways after a breach due to non-compliance underlined the potential cost of being late.

#2 Strategic opportunities in a time of change

Regulatory changes can be tough, but they can also spark innovation and new strategies. When California introduced stricter emission standards, most carmakers were scrambling to keep up. Tesla, already focused on electric cars, was ahead of the game. The companies that adapted quickly turned compliance into a competitive edge. This shows how proactive legal guidance can turn challenges into opportunities.

#3 Reputational and industry-wide risks

The stakes of non-compliance go far beyond fines and can erode trust in a company's brand. One great example is the Volkswagen emission scandal in which intentional evasion of rules about emissions resulted in over $30 billion in fines and settlements, not to mention long-lasting reputational damage. Legal teams are important in preventing such disasters and in constructing compliance processes that are resilient and clear.

#4 Legal exposure and litigation

Failure to adapt to regulatory changes does not only bring fines but invites litigation. For instance, some of the issues raised concerning Uber with regard to gig economy regulations show that there is also potential danger in getting on the wrong side of such regulatory movements. Lawsuits about worker classification in places such as California have taken their toll and forced a modification of operation, very well supported by the firm's legal team.

Big regulatory challenges to watch in 2025

#1 Big changes in data privacy laws are coming

2025 is the year data privacy gets even stricter. In the U.S., new state laws will kick in, each with its own rules on how businesses should handle consumer data and allow people to opt out. Meanwhile, the EU is rolling out new cross-border data transfer mechanisms to replace the privacy shield.

What legal teams should do:

• Stay on top of compliance for all these different rules—it’s not a one-size-fits-all thing
• Update your data handling practices and policies to match these tougher standards

#2 AI rules are getting serious about ethics

AI is running the show in so many areas now, but regulators want it to play fair. They’re focusing on:

• Transparency: Companies might need to explain how their AI makes big decisions, like approving loans or hiring someone
• Bias: Algorithms need to be fairer to avoid any discrimination
• Accountability: Businesses must keep close tabs on their AI systems and give consumers ways to challenge decisions

Source: Shashank Bijapur via LinkedIn

‍“In using technology, lawyers must understand the technology that they are using to assure themselves they are doing so in a way that complies with their ethical obligations – and that the advice the client receives is the result of the lawyer’s independent judgment.”

‍~ Wendy Chang, Member, ABA’s Standing Committee on Ethics and Professional Responsibility
‍Time to Regulate AI in the Legal Profession? (Perspective)

‍What legal teams should do:

• Do regular check-ups on your AI tools to make sure they’re behaving ethically
• Set up frameworks to govern how AI is used in your company

Also read: Global AI Regulation: The World's Approach to Ethical AI Use

‍#3 Taxes are going up, and the rules are changing

Taxes are going up, and the rules are changing. Corporate tax rates in the U.S. are set to rise, and the OECD’s new 15% minimum tax means companies can’t rely on tax havens anymore. For legal teams, this is a chance to help businesses figure out what to do next, like adjusting tax plans, reorganizing operations, and staying on the right side of the new rules. It’s also an opportunity to turn these changes into something positive, whether it’s smarter decisions or solving tax issues before they escalate. Clear and practical legal advice is going to be more important than ever.

What legal teams should do:

• Rethink your tax strategies to factor in these changes
• Make sure your business is set up to follow global tax rules

#4 Employment laws are catching up to modern work

Work has changed, and so are the rules. Here’s what to watch:

• Gig workers: Expect tighter regulations aimed at giving them benefits like paid leave and healthcare.
• Remote work: Laws are getting clearer on things like reimbursing home office costs and setting boundaries on work hours.
• Diversity, equity, and inclusion (DEI): Companies may have to report on pay equity and workforce demographics, with tougher anti-discrimination policies to match.

What legal teams should do:

• Update contracts and policies to reflect these changes.
• Make sure training programs are in place to keep everyone in the loop.

 #5 ESG reporting isn’t optional anymore

ESG stands for Environmental, Social, and Governance. It’s a framework companies use to measure their impact on the environment, their relationships with stakeholders (like employees, customers, and the community), and their internal leadership and ethics. Government agencies are cracking down on companies that fudge their sustainability efforts (yes, greenwashing). Public companies will need to be transparent about their environmental and social impact. New rules will also hit industries with high emissions or waste issues.

What legal teams should do:

• Oversee your ESG disclosures to make sure everything checks out
• Work with operations teams to ensure compliance with these new environmental rules

#6 Industries are facing extra changes

• Healthcare: As telehealth grows, so do privacy rules. HIPAA (U.S.) and GDPR (EU) are getting stricter, so privacy measures must be watertight.
• Financial services: Crypto platforms will face tighter rules around anti-money laundering and customer identification. Meanwhile, ESG investment transparency will need to be rock-solid—no more vague claims.

How companies can prepare for regulatory changes.

"For most in-house lawyers, one huge pain in the neck is regulatory change, either new regulations or changes to regulations already in place. Such change can be highly disruptive because the business has likely gotten used to operating one way and now, due to the change, will need to operate differently - sometimes dramatically so. Analyzing the change and figuring out the next steps, usually falls on the legal department. If you have never been part of such a process before, the first attempt can be overwhelming. I can clearly remember stumbling through the first several regulatory issues I was handed in the early days of my in-house career."

- Sterling Miller, CEO, Three-Time General Counsel, Author, Keynote Speaker - currently CEO & Senior Counsel at Hilgers Graben PLLC.

‍As the regulatory landscape shifts in 2025, companies need a proactive strategy to stay compliant and competitive. Here are key steps to help in-house legal teams and their organizations know and prepare more effectively:

1. Find the gaps before they find you.

Before you can fix anything, you need to know what's busted-or where you might be vulnerable. That's where a gap analysis comes in.

• Data handling: Are your systems set to meet the recent regulations in favor of privacy? Consider: cross-border transfers, consumer opt-out requests, general security.
• HR policies: Are your worker classifications in line with new gig economy rules? Are your remote work policies clear? And if DEI reporting becomes required, are you ready with the right data?
• Financial reporting: In fact, with likely changes coming down the pipeline for both corporate taxes and ESG disclosures, this is an ideal opportunity to check that your processes are going to be ready for it.

Tip: Round up the department heads-HR, finance, IT, operations and plot out where you are. By finding the problems early, you can fix them before they are costly ones.

2. Make sure your team knows the rules.

Rules are only effective if people understand them, right? That's why training and awareness are the linchpins to getting everyone on board with new regulations.

• For leaders: Your senior team needs to understand how these changes impact the business. Slip-ups on regulatory issues are not only legal problems, but they also really hurt reputation.
• For compliance officers: They will have to know the tricks of new rules, like AI transparency requirements or ESG reporting standards, for them to then implement them effectively.
• For everyone else: Provide training on what each team needs. The finance teams need to be focusing on the changes in taxes, while HR may need a refresher on updated worker classifications.

Tip: Make it interactive and interesting. Real-life examples and hands-on activities really make a difference in how well the information will stick.

3. Upgrade your tools—it’s worth it.

The right technology can make compliance much easier to manage.

• Data management tools: These help you stay atop data privacy rules, flag risks, and make reporting simpler.
• AI auditing software: If your company uses AI, these tools can identify potential biases or compliance gaps in your systems.
• Risk monitoring platforms: Think of these as your early warning system. They can also be used to warn you about regulatory changes and enable you to follow the progress in real time.

Also read: How is AI Regulated in the US? Things Lawyers Should Know

‍Tip: Collaborate with your IT department to select tools that integrate well with your overall systems. The aim is to make it easier to comply, not more burdensome.

4. Build the right team for the job

“While scaling a legal team from scratch, I don’t immediately hire for all functional areas. I look for what I call ‘Plus Ones’ or ‘Plus Twos’: people who are really good at something the business needs but have an interest or aptitude in one or two other things that I think we’ll need in the long term. For example, I hired an outstanding Regulatory lawyer with a history in Compliance. It’s both helpful for the business and great for the person’s development and career. People who want to spread their wings into other areas are also pretty motivated by those opportunities. It’s a win-win. Then, later depending on workload and bandwidth, you can promote some members and, if needed, make the next set of hires.”

- Ryan Nier, General Counsel, Pinwheel
Putting Legal on the Map in a Hypergrowth Startup

‍Compliance is a team sport, and you don't have to go it alone.

• Internal teams: Get HR, finance, and compliance working together. Keep everyone on track with regular check-ins.
• External experts: Where areas are more complex, such as international tax rules or industry-specific regulations, it makes more sense to call in outside counsel who can provide specialized insights that your internal team does not have.
• Third-party auditors: A fresh set of eyes will assist in discovering risks that might have otherwise been overlooked. External audits are one avenue to double-check.

Tip: Establish periodic reviews with your internal and external teams. Compliance isn't a one -time project; it's an ongoing process.

Own 2025 with SpotDraft

2025 is bringing some big shifts, and your legal team has a chance to get ahead of the game. With the right planning, smarter compliance strategies, and good teamwork across departments, you can handle the risks and even turn them into opportunities. But you’ve got to start now—no waiting around. Need a hand with compliance or streamlining your contract work? SpotDraft’s got the tools to help you stay flexible, cut risks, and keep up with all the changes. Don’t leave it till the last minute—start prepping today!