The advent of the digital revolution drove tremendous growth in both the pace and breadth of communications. With it came added complexity in the business world, in the form of greater and more challenging cross-border issues, fiercer competition, and more regulation as well as deleveraging of notable industries.
In the wake of this transformation, the legal function evolved from one where in-house counsel was recruited for its technical expertise in understanding many areas of law, to today’s business partner who is presumed to know the law and expected to deliver much more, including revenue and earnings growth, alignment with the organization’s strategic and operational objectives, and transitioning the function’s culture, attitudes, and staff through reorganizations, acquisitions, divestitures, changes in leadership, and the like.
The new breed of general counsel prioritizes human resources issues, specifically recruitment, development, retention, and succession. They see the competence and composition of their department as one of the key responsibilities they are entrusted with.
It should be a given that new recruits who make it through the interview phase have the technical skills required to assume the role and responsibilities of the job. Those hard skills can be tested, there are various objective methodologies that will do so. To meet the needs of a changing function, general counsel seek lawyers who are adaptive, possess a strong level of self-awareness, are collaborative, and are fuelled by an ambition to grow.
The quality of ambition is in my view critical. It is a mistake in my view to discourage candidates who are viewed as “chomping at the bit” or “striving.” Often general counsel feel threatened by candidates who are up-worldly mobile, and for this reason it is helpful to have the candidate meet others within the company for their perspectives. You don’t want to end up with a team of high performing, collaborative team-members who are content with their lot in life or give up trying to stretch their legs because they have been sent a strong signal that upward advancement will be limited.
High performers are often chosen for their specialization in one or more particular areas. Focusing on their niches they fall short in terms of leadership abilities and may be unable to see the “big picture.” This leads to misalignment with corporate goals and a reactive department that shows little interest in innovating.
In my view, the two most important qualities to recruit for are ambition and fit with the rest of the organization.
Development and retention
There are three key areas of focus to career development and retention within the legal department: communication, soft skills, and diversity.
It is easy to become overwhelmed with the responsibilities heaped on general counsel and neglect the career development of members of the legal department. Unless you carve out time to promote development, chances are it will be neglected.
Communicate goals at regular intervals, measure accomplishments, pursue accountability, and give feedback both formally and informally. Career development includes not only coaching of legal knowledge, but the developing business judgment, soft skills, and maintenance of independence.
It is useful to structure the legal function by type of work — for example, operations, marketing, and investor relations — rather than geography or business unit. This gives lawyers a broad overview of the business rather than a narrow focus. Opportunities to work with other functions and operations are required for deepening business acumen.
Developing soft skills is increasingly important. Being able to impact and influence is at the heart of leadership and promotes independence and objectivity. Asking lawyers to take on high-profile projects with exposure to C-suite executives in tandem with coaching around soft skills and developing a strong business orientation will help develop existing interpersonal and relationship management abilities.
Regular law department meetings or lunch-and-learn sessions focusing on skills development, relationship building, risk mitigation, and the like are techniques I have used in the past to assist with career development. Rotating the speakers helps to instil leadership qualities and ignite individual ambitions.
Career development should be informed by succession planning. What are the future business needs of the company? How can they best be supported by legal? Prognosticating where the company needs to be two or three years down the road and figuring out how that ties into the legal function is time well spent.
Perhaps there are roles for a particular lawyer outside of the legal department. An ongoing challenge for in-house counsel is how best to support individual growth when paths of promotions are heavily trafficked, blocked, or come to a screeching stop.
I have seen several in-house counsel transition very successfully down an alternate path. To do so general counsel began to work with the new department or function at least 12 months in advance to ensure the candidate had the appropriate career development support required to quickly bring value to the table.
Using only financial tools for retention is short-sighted. Businesses that are overly focused on optimizing near-term results for financial rewards frequently make decisions that adversely impact the company’s relationships with key stakeholders.
Retention strategy is a long game. The most important retention tools are to ensure the company provides challenging work in a stimulating environment with a very real opportunity at career advancement.
In my opinion, the one area where general counsel struggle is succession planning. Akin to making a will, there is the foreboding thought that if there is a plan in place, and one or two heir apparents have been identified, stakeholders will compare and contrast the candidates with the general counsel, who may then become a “lame duck” or be viewed as being dispensable.
Corporate governance, however, requires careful succession planning. It should be viewed as a major responsibility of general counsel, involving career development, financial literacy, exposure, input from other stakeholders, and a written plan including a practical, detailed plan for implementation.
The general counsel must be capable of leading and, where necessary, creating a competent and cohesive legal team, like his or her predecessor. The skills required include the ability to recruit, retain, and evaluate others. They also include the ability to collaborate, to motivate teams, to manage ambition, and to establish trust.
When the worst firestorms are heading in the direction of the organization, general counsel is expected to be the calm at the eye of the storm. Identifying a candidate who has the appropriate balance of ambition, leadership, self-awareness, and level-headedness is easier said than done.
Prime candidates are able to develop cohesive working relationships up and down the corporate ladder benefiting the entire organization. They are encouraged to focus on the business of providing legal support by helping to develop innovative processes, reduce costs, and benefit clients. They prioritize their work, rise above the day-to-day and focus strategically on what keeps the CEO, CFO, and board members up at night.
In my view, general counsel should be financially literate. It should be part of the successor’s career development plan. This can be accomplished through a number of ways including having the candidate receive internal training from the finance department, or take over legal support for investor relations.
Opportunities to meaningfully interact with board members, shareholders, analysts, and other constituents are essential, especially for a public company. This means the designated successor will, over time, be given ownership of things the general counsel has traditionally owned.
This shifting of responsibilities should begin while the current general counsel is still in place, ideally at least two years in advance. One way to do this is to transfer the corporate secretary functions to the successor or have him or her represent the legal department on the audit committee or other board committees.
When assessing internal candidates, the general counsel might think someone is well-suited to replace him or her, but it is the rest of the executive team and the board who will have to work with the successor, so all of these players should be consulted during the selection process.
The current general counsel may not be aware but senior management and the board may want a change of style, or they may have a different take on the kinds of issues and/or troubles the company faces or may face in the future.
The most important piece, in my opinion, is the implementation plan. General counsel should sit down with their successors and agree in writing how and when the transition to the new role and responsibilities will unfold, rather than have a verbal, haphazard understanding.
Lack of a written formal plan creates confusion, disappointment, and public perceptions that one or the other is moving too quickly or too slowly. That plan, or a subset, should then be communicated publicly so clients have a very clear understanding as to who they need to turn to for legal support on a given matter.
Failure to effectively communicate the plan leads to confusion, and can encourage forum shopping, dissension, and second-guessing as to the candidate’s abilities and preparedness.