Why Companies Need Business-Minded General Counsels
General counsels are currently expected to take on more responsibilities than ever before within their organizations. In the past, their main job was to guard the company against legal and ethical offenses, but the general counsel role is so much more than that now. In addition to avoiding legal infractions, general counsels are expected to provide strategic planning advice for the executive team. In fact, many directors believe one of the general counsel’s most valuable functions is to advise the board, as well as the executive team, on business strategy.
Evolving In-House General Counsel Roles
New corporate realities have evolved over the years to include a diverse scope of enterprise risks which has correspondingly broadened the role of in-house counsel. Executive teams are looking for general counsels who can not only juggle the litigation aspects of the business but who can also contribute to the company goals. Ultimately, a GC needs to be able to fulfill business promises, manage the legal department, and provide significant company value.
When looking for a general counsel, most directors and officers are looking for someone with two main attributes: in-depth legal expertise and sound judgment. The third attribute, however, that many teams highly prize is business acumen. Company leaders believe a general counsel with these three attributes will be successful in the position and will be a valued strategic advisor to the company.
The role of general counsel demands broad legal knowledge, but legal acumen is no longer enough to succeed as a corporate legal executive. General counsels need to be willing to acquire a better understanding of the business and industry they work in. A well-rounded GC will contribute to the growth and success of a company, not just serve as a legal watchdog.
Sound Business Understanding Makes a Better General Counsel
What business leaders are starting to realize is that general counsel can provide better legal advice when they have a thorough understanding of the business and industry. A GC is involved in important contract negotiations and makes impactful company decisions on a regular basis.
A deeper understanding of internal and external company dealings allows the GC to weigh the various business implications and make a decision that will benefit the company. In-house counsel with a strong grasp on enterprise risk management as well as a solid understanding of the business and industry can provide much more value to the business strategy on a regular basis.
Plan for Succession
A majority of companies do not have a solid general counsel succession plan in place. Many law departments are running on lean budgets so it can be difficult to single out a candidate for succession. It’s also difficult to determine a general counsel’s successor when the company attorneys all work on the day-to-day business needs and are rarely involved with higher-level risk and governance issues.
In most cases, companies look to an executive recruiting firm to benchmark internal candidates against external talent. While internal candidates may have the business knowledge executive teams seek, the dynamic role and long list of GC expectations make finding the right candidate for the job a high priority. Companies don’t want to be limited to internal applicants, so they open the role up to external candidates to find the very best match for their needs.
Culture fit and the ability to act as a reliable advisor are two key factors directors typically consider when searching for in-house counsel. Emotional intelligence, in particular, is prized amount GC candidates because high emotional intelligence often signals better stress management during high-stress situations. People with high EI are also more likely to build strong relationships and are known for being thoughtful. These two characteristics make it easier for a GC to connect with others and become a well-trusted advisor.
Conclusion
Corporate directors today are looking for a lot more in a general counsel than legal advice. Expectations for GCs are high, and these expectations aren’t likely to change in the future. When searching for a general counsel, it would be wise to seek a candidate with cross-educational training in business or someone who has extensive on-the-job experience. A great general counsel candidate will have just the right mix of legal acumen, business insight, and strategic know-how. A combination of these three competencies makes a strong candidate who will succeed in the expected role and contribute to the company’s overall growth.
Cowen Partners is a national executive search and consulting firm. Our clients are both small and large, publicly traded, pre-IPO, private, and non-profit organizations. Clients are typically $50 million to multi-billion dollar revenue Fortune 100 companies or have assets between $500 million to $15 billion. Successful placements span the entire C-Suite and include VP and director-level leadership roles.
5 Important Questions to Ask When Recruiting General Counsel
The general counsel position is a major part of the executive leadership team. You need someone who displays great leadership skills, sound judgment, and a strong sense of ethics. Finding a candidate who meets all of these expectations as well as your business needs can be difficult. Before sitting down for an interview, you need to consider what skill set and competencies your company needs in a general counsel. For instance, if your company is expecting to start handling acquisitions, then someone with a corporate law background may be beneficial.
To get you started, below are five assessment questions you should be asking a general counsel candidate no matter the scope of the position.
1. How Much Work Would You Assign to Outside Counsel?
Hiring outside counsel is expensive. By asking candidates this question, you can understand how the criteria a candidate uses to determine when to use inside attorney staff and when to hire outside help. It’s also helpful to know how a candidate determines which law firm to hire when seeking outside counsel.
You want to look for three main points in a candidate’s answer to this question.
- Experience with outside counsel
- Awareness of legal budgets
- Knowledge of local law firms
2. How Do You Control Costs within the Law Department?
The right candidate for the job will have the practical experience and a few recommendations for reducing spending in the law department. A candidate should be suggesting ideas such as relying on in-house legal services as well as utilizing smaller, more affordable, firms when seeking outside counsel.
You need someone who understands budget limitations and comes with creative ways to overcome monetary constraints.
3. What Are the 3 Biggest Legal Challenges You’ve Ever Faced in Business?
Listen to how the candidate solved the problems as well as the overall outcome of the situation. Did the candidate work with stakeholders to develop a strategy? Did the candidate research unfamiliar topics?
The answer to this question will show you how each candidate will handle potential issues that arise at your company.
This question will also help you compare answers between candidates. What one person saw as challenging might be a normal business day for another candidate. The complexity of each challenge will show you the types of problems the candidates have experience handling so far.
4. Describe a situation that presented a significant risk to the organization. How did you deal with it?
It’s really important to understand a candidate’s risk tolerance and risk management. The right candidate will be able to demonstrate what was learned from a risky situation as well as explain how it was handled. If it didn’t go well, then this is an opportunity for the candidate to explain how it would be done better in the future.
Managing risk isn’t always easy and you need someone who can bounce back after an error and do better in the future.
5. What interactions have you had with regulators as well as your executive team?
The general counsel interacts with a number of different people, but regulators and the executive team are two important groups you need to ask about. You want a candidate who has experience working with regulators and who has an organization system in place for maintaining documents.
Since the general counsel will be working alongside your executive team, you want to know how well candidates are currently working with their teams. High-level responsibilities and an expanded role outside of the legal department are two strong signs that a candidate has earned the trust of their executive team.
Including these five questions in your interview will give you a solid understanding of each candidate’s key competencies. The general counsel is a crucial member of your executive team, so understanding the strengths and weaknesses of each candidate is essential to your business.
Chief Legal Officer vs General Counsel: What’s the Difference?
In-house legal advisors are invaluable to a company. They understand the ins and outs of your business which gives them a better grasp of the potential risks and threats your company faces. High-level positions in charge of your company’s legal matters are even more critical as they oversee the company’s entire legal team. You may be considering hiring a general counsel or chief legal officer to run your company’s legal matters, but maybe you don’t know which position is best for your business. Below are the differences between a general counsel versus a chief legal officer.
Role of General Counsel
A general counsel is considered a more traditional legal executive role within a company, when compared to the role of a chief legal officer. The main focus of a GC is to manage a company’s legal compliance as well as corporate governance.
The role of GC is also more closely aligned with a high-level lawyer which ensures the company’s legal obligations are all met. A few of a GC’s main job responsibilities are listed below.
General Counsel Job Description
The responsibilities and duties of a general counsel can vary from company to company. Typically, however, the general counsel will need to:
- Represent the company in court
- Convey legal advice to company executives
- Lead and manage the legal team
- Communicate and oversee compliance regulations with government agencies
Chief Legal Officer Role
The role of chief legal officer (CLO) is a newer position than the general counsel. In some ways, the CLO role is an expansion of the general counsel role. The CLO is a C-Suite position that focuses on the legal department and is also responsible for providing:
- Legal analysis
- Valid business solutions to arising problems
- Strategic support of the business model and company goals
The CLO is a multidimensional role that not only manages legal tact but also aligns legal and business strategies, suggests innovative business solutions, mitigates risk, and ensures legal efficiency. Ultimately, a chief legal officer stands apart from the general counsel role in that a CLO is often considered a strategic business partner.
A few of the chief legal officer’s responsibilities are listed below.
Chief Legal Officer Job Description & Responsibilities
This concise CLO job description provides a brief overview of what the chief legal officer in a company does. Generally, a chief legal officer will:
- Monitor legal changes that affect the company or the business’s industry
- Develop curriculum to convey legal matters to employees
- Oversee the hiring of internal and external legal teams
- Advise top executives (CEO, COO, CFO) on legal matters
- Manage compliance issues
Should You Hire a CLO or GC?
Both positions will bring value to your company but in different ways. A general counsel provides all of the legal advice and assistance you need. If you’re simply looking for some extra help managing your legal team and ensuring compliance is met in every possible way, then a GC is a great option.
However, if you’re interested in a more involved role for your company that can provide business value in addition to legal advice, then the chief legal officer is a better choice. The CLO role has actually been gaining a lot of momentum lately and has been listed as the sixth fastest-growing C-suite title of 2020 at 23 percent growth, according to Workforce Insights.
The position growth trend is understandable because a CLO provides a lot of value to a business. With a CLO, you have an employee who is dedicated to furthering the business and improving the bottom line while at the same time they ensure compliance is met along the way.
What to Look for in a Chief Legal Officer
When hiring a chief legal officer, you want to make sure you’re choosing someone who not only understands the legal aspects of your business but who can also manage the more strategic aspects of running a company. With this in mind, below are a few important characteristics you should look for in a CLO.
1. Strategic Thinker
The CLO balances the legal aspects of the company while monitoring the repercussions and risks associated with new business moves.
A CLO recognizes the legal risk of new ventures but can also place this decision in the bigger context of the business.
Since a CLO understands the overall business goals and mission of the company, a CLO can view legal aspects of a business decision through the lens of running a successful business.
2. Competent Leader
The legal team is usually managed by the CLO so you need a competent leader who will inspire and motivate employees to do their best work. You also want a dynamic leader in this position because they’ll also be interacting with corporate leadership and outside clients on a regular basis. The person in charge of your legal team, therefore, needs to be able to lead people from all different backgrounds.
3. Decisive
A decisive CLO is essential for successfully managing the legal aspects of your business. You don’t want someone in the role who will deliberate over decisions for weeks at a time. You want a confident CLO who can look at a legal query, efficiently analyze the benefits and risks, and then move forward with the process in a timely manner.
Hiring the Right Chief Legal Officer or General Counsel
Recruiting executive-level in-house legal talent is a big move for your company, so make sure you do it right. Hire a team of experienced and knowledgeable executive recruiters to handle your legal recruiting.
The Benefits of a Legal Recruiting Firm
Your company likely takes months to find and hire a new employee. The processes of posting the job opening, sifting through applications, and setting up interviews is time-consuming work but very important for your business. The truth is, however, even after all of this work the person you choose might not be the best fit for your company.
An experienced legal recruiting firm makes the whole hiring process easier. Recruiters take over the task of finding qualified candidates for the general counsel or chief legal officer role you need filled. Recruiters have an extensive network of qualified talent they can access for your needs and also understand how to find the best legal talent to fit your company. Contact Cowen Partners to find out more about legal recruiting today.
Cowen Partners is the nation’s executive search firm, enabling companies to harness the power of human capital to fuel their success. Cowen Partners gives our clients access to the top 1% of human capital to create opportunities that accelerate their growth and market share. With Cowen Partners, clients can grow at scale, create value, and drive results with world-class talent.
Our clients are both small and large, publicly-traded, pre-IPO, private, and non-profit organizations. Clients are typically $50 million to multi-billion dollar revenue Fortune 1000 companies or have assets between $500 million to $15 billion. Successful placements span the entire C-Suite and include VP and Director level leadership roles.
With our proven processes and guaranteed results, we have successfully placed hundreds of candidates in industries including technology, healthcare, manufacturing, retail, financial services, real estate, and private equity.
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