General Counsel – A Changing Role In A Changing World
Increasingly I realise just how easy some of us in private practice have it compared to General Counsel (GC) and in-house lawyers.
Law firms and their lawyers are inclined to be change resistant. Professional experience has conditioned them to be sensitised to the potential downsides arising from a course of action in preference to embracing the likely upsides. And even when they do accept that change is inevitable, often it's a painfully slow process to effect – it's hard enough to halt the progress of a supertanker, let alone change its course.
By contrast, GCs simply don't have the luxury of slow change. As the last five years have shown, in-house teams and GCs in particular are compelled to adapt, learn new disciplines and take on additional responsibilities at a speed dictated by their Board and other stakeholders. It's a case of change fast, adapt, or die.
So, cards on the table, I envy both the GCs' compulsion and ability to react quickly to change and I admire the way in which most of our legal peers in industry have reinvented themselves over the past few years.
It would be an oversimplification, though, to assume that all law firms are the same. Some have caught on, and are reflecting the changed nature and scope of in-house teams. These modern firms are leaner and more nimble – and consequently more efficient. They are the ones emerging from the financial downturn stronger and better evolved to meet the constantly changing needs of their clients.
The boom years following the turn of the millennium bred a degree of complacency in private practice. But the lessons some have learned following the downturn are creating a new breed of law firm that is better geared to deliver what clients really need and want.
But, as the achievements of this impressive list of 100 in-house leaders shows, GCs are the ones dictating the pace. Like those firms that saw the global financial crisis as an opportunity as much as a risk, this report showcases those GCs who have moved with the times and are already well positioned to become influential business leaders of the future.
The new world order post-Lehmans represented something of a perfect storm for GCs in terms of the challenges they faced and the resources available to them to meet those challenges. Many companies were forced to streamline their in-house legal teams and cut back expenditure after 2008, and all of this while confronted with a thickening jungle of complex regulation, and an increasingly daunting litigious outlook.
And as this difficult environment has continued, so the role of the GC has had to expand beyond that of simple legal adviser, or even risk manager. The very best GCs are now valued members of their companies' strategic management teams.
The view from my side of the fence is that GCs have become far more sophisticated buyers of external advice as they've been forced to work smarter with shrinking budgets and increasing workloads. The watchword now is "value" not "price". Although there will always be competition on rates, GCs are looking increasingly at the effectiveness and impact of the services they commission. In a demanding world, a commitment from law firms to delivering excellent service, consistently and reliably, will be a significant factor when GCs come to choose their advisers.
What I see is that GCs, as experienced purchasers of legal services, are increasingly focusing on how their legal spend is allocated – both internally and externally – and are far more demanding of their external advisers, looking for greater certainty on the value of what they are buying. They still want quality, but quality delivered at the right price. And rightly so.
Just as GCs are more demanding of their advisers, so management teams are more demanding of GCs. In business, most decisions come with an element of risk. And the increasingly stringent legal and regulatory environment adds to the list of risks, meaning the C-suite are turning ever more to their GCs as key advisers, tasked not only with counselling on the implications of present risk on their business, but giving their insight into likely future risk, too.
In private practice, we need to ensure we're set up both intellectually and operationally to properly support our clients in this new reality. Just as GCs are increasingly being seen as trusted advisers to their management boards, so we need to develop to offer the individual legal and commercial expertise, practice bench strength, and personal service that GCs expect from their advisers.
Private practice lawyers need to have a thorough understanding of the commercial context in which their clients operate. We need to have the knowledge and expertise to offer commercial solutions to today's commercial problems, being proactive rather than reactive when it comes to dispensing advice that is specific and to the point.
Many have only just started out on this journey of change, so the time is now ripe for GCs and their external advisers to work closely together to shape enduring and profitable relationships, for both parties.