New Breed of General Counsel Delivers Enhanced Value in the C-Suite
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For corporations worldwide, the target profile and strategic responsibilities of the General Counsel are shifting, with in-house counsel playing a more prominent and valuable role in the leadership team.
As a result, selecting the right person in the General Counsel (GC) role has become a top leadership priority. Whereas domain and technical legal experience were paramount in the past, the GC of the future will be expected to be a well-rounded executive and a strong contributor to the executive committee.
With roots dating back to the global financial crisis, the upgrading of the GC role is a strategic talent trend that continues to gain momentum, as tougher regulatory climates in industries and nations around the globe reinforce the rising importance of legal and compliance functions.
Greater competition also has meant that there is more focus than ever on the customer and the impact that key management decisions will have on the end user. This has required the GC to get closer to the business and the other members of the executive team.
Accordingly, in high-stakes, high-rewards sectors such as financial services, life sciences, and technology, media and telecommunications, corporations are increasingly recognizing that top-quality GC will deliver a powerful competitive edge.
Stakeholder in Business Decisions
This might come as a surprise to organisations that still view their GC as ‘defensive players,’ brought in after the fact to deal with major disputes or ink large deals once the commercial terms have been settled. Having the right General Counsel in the C-Suite, proactively involved in decision-making and serving as a confidant to the CEO, is the way of the future. In recent research, for example, over half of GC surveyed saw their core role as ‘a stakeholder in business decisions.’
With strong expertise and experience in General Counsel executive search, the consultants at Johnson recommend a new and enhanced talent profile. This includes not only top-quality legal skills and experience, but also a strong strategic mindset, an ability to transform the legal function, and an orientation to collaborate across the business.
The GC of tomorrow must be active contributors to overall company strategy and be able to imbue their lawyers with an understanding of how legal decisions and advice fit in with the corporation’s wider business and strategic context.
Again this trend is borne out in a recent study with two in three GC believing they were more involved in formulating commercial strategy in their company than had been the case five years ago.
The New Wave of Innovation
Best-in-class GC are able to drive innovation with fresh ideas on the design of organisational structures, processes, and systems. This expertise is valuable, although it may be difficult to find, as lawyers by nature tend to be relatively conservative and change resistant.
As Johnson advises, truly impactful GC must also possess the gravitas and influencing skills to be able to build relationships across the organisation. Chemistry with the CEO and other business leaders is the critical ingredient. In the same study cited earlier, one GC of a large organisation described this as having an understanding of the business objectives of line managers and seeing them as a partner in achieving a common goal.
Demand Outstrips Supply
Yet, with growing demand for this new breed of GC, Johnson warns that the supply of outstanding candidates is limited for a numbers of reasons. When corporations hire a partner directly from a law firm, there is a strong risk of ‘organ rejection’.
Historically, law firms have rewarded commercial output rather than management aptitude, meaning that there is no assurance that the most senior partners are good people leaders. Those that have spent their whole career in law firms may come across as too esoteric or inflexible.
The right skill set may not sit within an incumbent GC either. Compared to other senior executives, GC tend to have long tenure, as their next move is not always obvious. Long tenure can sometimes bring staleness, which is antithetic to the fresh thinking that is at the heart of innovation and change.
Search firms with an intimate knowledge of corporate and private practice environments are best placed to find well-rounded, strategically oriented legal executives who will deliver real value in the C-Suite. The GC of the future will be outstanding business leaders (and possible CEO successors) who happen to be lawyers.