The Modern General Counsel – Protecting Value & Creating It
Long gone are the days when an organisation’s General Counsel was a legal technician, dispensing black letter law from the Office of the General Counsel – a place the business viewed with trepidation, much like a student views a visit to the headmaster’s office!
Today’s successful General Counsel / Chief Legal Officer (GC) adopts a vastly different approach, drawing on a very contemporary toolkit characterised by versatility, curiosity, business acumen, learning agility, strategic thinking, leadership and personal courage. Those who develop and deploy this toolkit earn their place as a key business partner and play a significant role in business strategy and decision-making.
Internal and external context
The environment in which corporates operate is increasingly volatile and uncertain. Many of the issues confronting GCs, and the businesses and executives they support, are new or playing out with greater intensity. This includes:
- cyber security and the use and protection of data
- workplace relations and employee wellbeing, including issues associated with working from home and mandatory vaccination
- ESG and related stakeholder expectations, particularly climate change, diversity and inclusion, and the future of work; with issues spanning shareholder activism, modern slavery, stranded workforces, and new product development (e.g., sustainability linked bonds and ESG derivatives)
- related to ESG, competing views about the extent to which corporations should have a public position on social issues of the day
- transformational merger & acquisition, divestment, and capital management activity; whether as hunter or prey
- regulatory activity, and industry specific regulatory change.
Innovating around value to customers is a top priority.
Business as usual doesn’t pause to create bandwidth for this work, meaning the amount and complexity of legal work overall is increasing. At the same time, doing more with less to flatten or reduce costs is a recurring theme.
In the effort to work smarter, legal operations is becoming mainstream with many teams employing a legal operations professional, and adopting technology solutions and data analytics, to help drive process efficiency.
The vast majority (at least 70%) of GCs in the ASX100 report to the CEO and are members of the executive team. They are in the room where it happens! Many also manage other functions; typically corporate, external or regulatory affairs, compliance, or people. They have shared responsibility for the overall success of the organisation, and a significant level of influence on its strategy and direction.
They are regularly sought out by other members of the executive team for input on business decisions and non-legal issues. In combination with leadership of a function which supports every part of the organisation, this provides the GC with a holistic view which, apart from the CEO, is relatively unique. It helps position the GC as an objective sounding board and confidant for the CEO. It also enables the GC to add value by joining the dots for others.
The increased demand of contemporary corporate governance is seeing the separation and elevation of the role of company secretary. Slightly less than 50% of GC in the ASX100 are also company secretary.
So, what’s in the GC toolkit?
With this background and context, what skills, experience and personal characteristics are needed in the successful GC (and commonly sought-out by informed hiring managers)?
- Legal – Excellent legal skills are table-stakes, including experience advising on a broad range of matters. Specialist expertise is relevant in highly regulated or differentiated industries (e.g., financial services, energy, health). A background in M&A and capital markets is often preferred.
- Commercial – Strong commercial acumen. A track record of seeking intimately to understand the business, its drivers, and the industry in which it operates. Offering solutions which calibrate legal risk management to business goals and customer expectations.
- Stakeholder – The ability effectively to work with and influence a broad range of stakeholders, both internal and external, including the CEO, the board, peers, team members, regulators, suppliers (e.g., law firms) and industry bodies.
- Leadership– Experience leading a team of the requisite size and complexity (e.g., multi-disciplinary, geographically dispersed, culturally diverse). Creating and sustaining an environment where people are enabled and engaged. Leading through change.
- Management – Financial acumen and experience successfully managing comparable budgets. Comfort in using data and management information to support fact-based decisions. Strategic management of resources, understanding what levers are available and how and when to pull on them (e.g., in-house vs external, law firm vs alternative providers, bespoke vs commoditised, serve vs enable self-help).
- Air-traffic control– When things go wrong, knowing who needs to be informed or consulted, who to get in the room to solve the problem, and how best to enable them to do that – including getting out of their way and giving them air cover.
- Fit – Cultural fit with the CEO and executive team. Alignment with the organisation’s values and positioning.
- Courage– Resilience and the personal courage constructively to challenge the status quo or present the uncomfortable truth.
Why does it matter?
Legal and professional services is an intensely competitive landscape. The increasing challenge, profile and sophistication of GC roles means they are pursued by very high calibre candidates, including top-tier law firm partners for whom the move to in-house would once have been unthinkable.
Consider your own toolkit against the skills, experience and personal attributes outlined above. What are your strengths to nourish? Where are the gaps and what will you do to proactively fill them (step-up opportunities, business or project secondments, team swaps, coaching)? Staying with the lead bunch – or better, being off the front – needs ongoing and deliberate attention to honing those tools.