Recent years have seen a significant evolution of the role of corporate counsel. Where in-house lawyers were once responsible for compliance and the inevitable lawsuit if it does arise, their role has become much more dynamic. Corporate counsel is required to contribute to company strategy and overall direction as well as corporate governance. There are a few reasons for this changed role.
One important reason is the turmoil and disillusion that followed the 2008 financial crisis. Another is the rapid globalization and virtualization of the world of commerce and the new legal risks associated with it. Yet another is the growing litigiousness of the corporate environment. Perhaps the most important change, however, is a growing concern amongst consumers and investors with corporate responsibility, ethics, and principle.
All of these developments have culminated in a radically new role for corporate counsel.
The New Role of Corporate Counsel
When developing your success strategy for the role of general counsel, there are a few important aspects to the role to keep in mind:
Typically, legal expertise is needed more extensively, and at an earlier stage, for critical management decisions. For this reason, there has been growing support for the argument that corporate counsel should work much more closely integrated with business. Legal expertise is needed not only for functional legal matters, but also for matters of strategy, in other words.
In addition, corporate counsel’s job description has also expanded significantly beyond textbook corporate governance issues. It also encompasses the company’s integrity and reputation. It has become a job that requires answers not only to the question “what is legal?” but also “what is right?”
To be able to do this, corporate counsel needs intimate knowledge of the day-to-day operations of the organization, as well as insight into company management’s priorities and plans for the future.
In short, the role of corporate counsel has developed to be a dual one: on the one hand, you serve as guardian of the organization. On the other, you serve as partner to the company’s management, and in particular to the board of directors.
Creating an Effective Partnership With The Board
There are a few relatively simple steps that can enable corporate counsel to fulfill the dual functions required of the position.
First, ensure direct access to the board. It is common practice that the corporate counsel reports to the CEO and also has direct access to the CEO. However, if the in-house lawyers are to be trusted with something as fickle as company reputation and corporate integrity, they need that same direct access to the rest of the board as well.
Secondly, the board as well as corporate counsel should invest significantly in talent review and succession planning for the position of corporate counsel. A large part of creating a coherent legal strategy is to establish institutional knowledge and continuity between successive office holders.
Finally, if corporate counsel is to serve in a more strategic function, and carry more responsibility for strategic issues such as corporate responsibility, the office should be part of strategic decision-making and planning.
In this sense, general counsel should be able to serve in the capacity of partner to the board, whilst still fulfilling the function of guardian. These are difficult to reconcile. The only way to ensure that both roles are fulfilled honorably is to build trust between the board and in-house counsel. Start forging a partnership today.
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