The year of the General Counsel
General Counsel were more influential in 2020 than ever before.
Throughout the COVID-19 crisis, many GCs weighed in on crucial business decisions and set important new guidelines for their organisations. We heard from many GCs who were suddenly speaking with their CEOs daily, reporting to the board directly, and making a tangible impact on their company. They had moved beyond the trusted legal advisor, into the role of business-critical strategist.
This new role presents both a threat and an opportunity.
The threat is that Legal teams will end up burdened with more responsibility and more work - but with no change in resources. We’ve seen this familiar, painful story play out over the last decade, and we know how it ends. The ‘more for less’ squeeze leads to dissatisfied teams, frustrated clients, and unexamined organisational risks.
In the alternative, ambitious GCs have the chance to confirm their role as an essential, value-generating business leader. Building on the influence they garnered in 2020, 2021 will see the most successful GCs make significant, measurable contributions to business outcomes - not just legal problems.
To avoid the pending return to old ways and instead seize a new future, GCs will need to use the pandemic to build and exert influence.
Influence is the key to success
One thing differentiates a thriving, valued legal function from an overworked team of fraying lawyers: the influence of the General Counsel.
Unfortunately, many GCs don’t have the influence they should. While Private Practice Partners are ‘rainmakers’ who generate substantial value for their businesses, surveys show that in-house lawyers are perceived as cost-centres, execution blockers or support functions.
Though no GC has told us point-blank that their clients are dissatisfied, many admit they struggle to secure increased headcount or budget to invest in tech; they’re often scrambling to catch up after being brought into deals late; and they’re usually excluded from executive committees or meetings.
This is largely the result of two key factors:
- Reactivity: In a recent survey from Gartner, less than half of GCs said they played a significant role in identifying and managing emerging issues, supporting their CEO, or executing corporate initiatives. Instead, Legal teams are asked to help at the 11th hour; asked to show cost savings rather than value-creation; and have little time or energy leftover to proactively map upcoming organisational risks.
- Acting as chief legal advisor rather than corporate executive: While most GCs want to serve as corporate executives, Gartner’s survey showed only a fraction actually do so. Prior to the pandemic, few GCs attended executive stand ups, reported directly to the board or exerted influence over their CEO. Excluded from the C-suite, it's difficult for most GCs to have a noticeable impact on business objectives.
Breaking the cycle
The upshot of the current state of play is that many GCs feel caught in a negative feedback loop: they’re too busy to create space to execute strategic tasks, which perpetuates the cost-centre perception, which leads to flat or declining resources, so they stay buried in the day-to-day.
Effective GCs take three clear steps to escape this loop and become in-house rainmakers:
- Define a new role for the GC and communicate it to the CEO,
- Set boundaries on client service, and
- Calibrate time and activity to align with value creation.
(1) A New Role: The Shift From Legal Advisor to Executive General Counsel
To increase influence, GCs must first clearly define the role of an Executive General Counsel and then explicitly communicate this to key internal stakeholders.
High performing legal leaders structure their role for business strategy and guidance. Unfortunately, most GCs prioritise legal issues and act not as a corporate executive, but as their company’s chief lawyer.
Part of the problem is habit; many GC’s rose to the top on the back of their elevated legal prowess, and must now learn to prioritise commerciality. The other part is culture; Legal departments have trained CEOs, CFOs and other executives to ask for legal advice — but not for commercial guidance.
How to do it
To break away from the rest, effective GCs:
- Evaluate their current role and analyse routine activities against their organisations’ key outcomes;
- Join relevant standing meetings or working groups;
- Identify areas where they can deliver strategic business guidance;
- Contextualise legal advice within the organisation’s strategic aims;
- Communicate their desire to move towards a more commercial, strategic role to the CEO.
Influential GCs organise their day-to-day routine around the strategic elements of their desired role. But to avoid being waylaid by daily mayhem, the best GCs also raise the guardrails to distractions.
(2) Set Boundaries on Business Support
The second step to building influence is to set effective boundaries on client service.
Too often, Legal teams say ‘yes’ to all support requests, hoping to build great relationships with the business. In reality, this means that Legal teams prioritise work that is urgent for individual business functions, rather than work that is most valuable to achieving the wider organisation’s (or aligned with the Legal function’s) objectives).
How to do it
Clients don’t always need the Rolls Royce service (a tech-enabled Tesla would be better). Influential GCs focus most of their time on legal support requests that add value to the whole organisation — rather than trying to please in every interaction.
To field distracting legal support requests, GCs can:
- Implement ‘Request legal support’ initiatives, whether technology-based or process based, that require clients to jump through a series of stage gates before the Legal team review the matter.
- Circulate a working document outlining (a) the Legal team’s priorities for the year and (b) listing work that isn’t value-add (such as identifying company numbers) and will thus be de-prioritised.
- Encourage business -self-service for basic contracts, non-legal support requests or other commonly asked questions, either via technology or improved processes.
- Provide ongoing training (including on-demand webinar training) that details the key priorities of the Legal function. Link those priorities to the organisation’s strategic direction and suggest support options for those queries/problems that the Legal function isn’t best placed to fix.
(3) Align your time with value creation
The third step to influence is to direct your activities towards creating value.
GCs spend too much time on work that they shouldn’t own or do. Gartner estimates that GCs waste 19% of their time on work they don’t need to do, and 25% of their time on work they should have delegated. As a result, they have little time left to plan or deliver on strategy.
How to do it
It’s easy to lose control of your calendar, and GCs are better than anyone at rapidly putting out fires. The most effective GCs implement simple behaviours that protect their time, allowing them to align their activities with maximising value creation.
- Map your activities along a risk/value matrix. Ruthlessly eliminate tasks that are not high risk and value, don’t align with your definition of value-creation, and that someone (anyone) else could do.
- Time-block your schedule and regularly audit your time. The time you save on this step alone will pleasantly surprise you.
- Empower your team to decide without your approval on a list of key activities
- Don’t just reward your team’s legal achievements. Instead, loudly celebrate your staff’s capability-building wins, innovation projects, and business improvement practices.
- Build a targeted business case for staff and technology investments that relates to specific business needs.
Over to you
In 2020 we met dozens of General Counsel, Chief Legal Officers and VPs of Legal.
Some were struggling under their mounting workloads, fighting to retain staff, and scrambling to respond to endless support requests - many of which weren’t even legal queries. Others were thriving. They were proactive, focussed on delivering business guidance, had time for innovation projects, and secured budget for appropriate resourcing and technology.
We believe the key difference between the two camps was influence. Influential GCs find themselves in a positive feedback loop of delivering value, which secures increased legal resources, which allows more focus on business-critical work, which creates happier legal teams and thus delivers more value. It’s a virtuous cycle.
In the fallout from COVID-19, ambitious GCs who were previously stuck in the negative feedback loop have the opportunity to begin a virtuous cycle. As they say - never waste a crisis. Get in contact with us here at Plexus to find out how our legal automation, matter management and contract management software can help your in-house legal team in 2021!