Legal knowledge is difficult to grasp if you haven’t specifically studied it. Even so, it’s important for departments within a company to have at least some understanding of relevant laws and compliance rules related to the business. An understanding of legal and ethical guidelines can help employees avoid any unnecessary mistakes that create legal issues for the business. A common position that helps educate employees on legal compliance, as well as handling a number of other responsibilities, is a general counsel.
A general counsel oversees legal issues throughout your business and can include a variety of responsibilities. For example, some general counsel roles manage patents, trademark protection, labor law, tax documents, and more. Most general counsel positions also handle corporate compliance, department communication standards, and intellectual property issues. Another important role of the general counsel is educating employees on relevant laws and regulations to ensure compliance issues don’t occur.
The role of general counsel is also evolving to include strategic business planning. Many executive teams are beginning to rely on the general counsel for sound risk assessment and advice on business strategy.
As you can see, the term “general counsel” makes sense the more you look at the position. The role covers a very broad range of responsibilities throughout the company. Ensuring legal compliance and understanding in a business is no small task, which is why the general counsel must work in so many different areas of the business.
An in-house general counsel is a valuable asset to a private equity portfolio company. Coordinating legal matters is an important role that outside counsel cannot always manage. An in-house general counsel understands the ins and outs of the business and can focus solely on the needs of the company. Of course, convenient access to legal counsel isn’t the only reason a PE portfolio company should hire a general counsel.
The 3 main reasons a private equity portfolio company should consider hiring a general counsel are for:
Here is a closer look at each reason.
Many industries have complex regulations that can create business-critical issues if you’re not careful. For instance, intellectual property management plays a major role in industries such as media and entertainment, financial services, healthcare, and many more. A general counsel oversees intellectual property protection and ensures monetization strategies can move forward. Government oversight industries are another area that requires input from general counsel. A general counsel can use sector knowledge and an understanding of regulatory requirements to carefully navigate business risks and lead the company toward further growth.
Dispersed ownership is becoming increasingly common among portfolio companies. Navigating the legal considerations of each private equity company as well as the personalities and motivations of each player takes a high level of emotional intelligence and careful legal consideration. Your company has obligations to each PE owner and sometimes their interests are conflicting. It can be tricky to bridge the divide and bring everyone into alignment, but an experienced general counsel will know the best way to mediate the situation.
Switching from a private equity-owned company to a publicly traded company is a complex process. A general counsel is a perfect role to help navigate the initial public offering stage and set up the governance infrastructure required after the IPO. Taking a company public requires an immense amount of coordination and collaboration which cannot be handled well by outside counsel. In this instance, you need a general counsel in-house who understands the minute details of the business and won’t miss any important governance or regulatory requirements.
Legal considerations at your company need to be handled with careful attention and precision. An outside counsel is a great resource, but its capabilities are limited. An in-house general counsel gets to know the nuts and bolts of your business and can offer much more accurate assessments of risk to your business. A general counsel familiar with the company will also be able to easily recognize any compliance issues that arise and quickly rectify the problem.
A general counsel is even more vital for a private equity portfolio company. A PE-backed company has to navigate compliance as well as ensure PE expectations and obligations are being met. Avoiding legal issues between the portfolio company and PE owner is a must and a general counsel is a perfect person to keep everyone on the same page. Assess what the role has to bring to your company and determine if your business would benefit from an in-house general counsel.
Our hands-on executive recruiters have experience working with private, public, pre-IPO, and non-profit organizations. Clients are typically $50 million in revenue to Fortune 1000’s or have assets between $500 million to $15 billion. Successful placements span the entire C-Suite – CEO, Chief Operating Officer, Chief Financial Officer, and include vice president, general counsel, and other director-level leadership roles.
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