By Erin Geiger Smith

Nov 21 (Reuters) - General counsels see regulation as the biggest risk facing their companies today, according to a new report.

The report, released this week by KPMG, surveyed 320 general counsels in 32 countries and provided excerpts from 16 additional interviews with the general counsels of large global organizations. It was KPMG's first survey of this kind.

Sixty-four percent of the respondents said regulation was the top time-taker for their in-house team, and nearly 90 percent expected both the volume and complexity of their regulatory work to increase in the next five years.

The general counsels' experience dealing with regulators and identifying potential problems is, in turn, elevating the top lawyers' role within corporations, the report said. Corporations increasingly are using the GC as a "barometer" who can and should participate in overall strategic operations.

In North America, 74 percent of the surveyed GCs said they were more involved in business strategy than five years ago, and 96 percent said they thought they could reduce risk for their employers if they were involved in business decisions at an early stage.

"General counsel in North America still see a gap between where they could contribute and how much they are contributing," said Bryan Jones, head of KPMG's global dispute advisory services. That gap is much smaller in places like Western Europe and Latin America, the survey showed.

One measure of the influence of GCs is their direct access to the board of directors. Of the participating GCs, 81 percent said they either sit on the main board or participate in and report to the board. Several of the GCs interviewed stressed the importance of communicating with the board in their own language.

A GC who can not only recognize risk and opportunity but translate that "into crisp business language that colleagues who are not lawyers can readily understand," is more of an asset to the board, one GC told KPMG.

The top lawyers could provide even greater value if they could identify potential new-technology problems their company might face, said Jones. More than 75 percent of GCs said that new technology, including social media and cloud storage, were either just a "slight risk" or "no risk at all."

Such a sanguine view of new technology does not square with concerns Jones said he has heard from chief privacy officers, technology team members and chief financial officers.

"That's an area where a GC can talk to other people in their organizations and figure out where the risks are that no one sees," he said.

In managing risk, general counsels tend to rely more on their in-house staff rather than on outside counsel, the report said. When GCs were asked about the three main steps they take to effectively manage risk, 69 percent said their top priority was training their in-house teams, while only 16 percent said they sought advice from outside attorneys as one of those main steps.

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