CEOs and General Counsel share a sympatico that is hard to define. The role of in-house counsel has evolved to the extent that they have crossed over from being mere legal advisors to becoming definitive confidantes. Dispensing legal advice in prescription form won’t win you the brownie points you need to succeed in such competitive environments, explains Caroline Lim of DHR International. You’ll need “courageous integrity” to go the distance with your CEO.
 DHR consultants interviewed a number of chief executive officers and other chief business and functional leaders from various industries and business operations, ranging from healthcare, consumer, financial services, industrial, technology and public affairs, for this article. These senior officers represent multinational companies based in Hong Kong, China and across Asia. Our aim was to examine how the General Counsel’s role is evolving and to form a more complete picture of what skills a General Counsel needs to perform his job successfully. In other words, what do CEOs expect from their General Counsel? The impact of a changing market The evolution of the General Counsel now runs parallel to that of the Chief Finance Officer many years ago. Today’s General Counsel is required to be a business partner to the CEO as well as the rest of the senior team, the board of directors and leaders of major functions and operations throughout the enterprise. Such responsibility demands that the General Counsel and members of the legal team possess a broad business perspective. This executive must have the ability to see legal considerations in the context of business outcomes in addition to legal consequences. They are required to take a global view of the business and consider how legal issues impact outcomes. They are expected to be proactive, and well-versed at creating new business initiatives. The type of industry as well as the consequential legal needs of a company influences the nature and degree of a General Counsel’s role. The speed at which the evolution of the legal function occurs depends primarily on the CEO and the General Counsel’s desire to broaden contributions to the organisation. Due mainly to the regulatory and economic environment that all financial services providers have found themselves in following the credit crunch, the remit of lawyers in that industry has broadened significantly over the past few years. This has led to the lawyers becoming even more involved with other departments in the business, which in turn has given the legal function greater visibility. Increased regulation and a greater focus on compliance have meant that lawyers are needed to give legal advice and assurance on an even wider range of operational issues throughout the business. They are working ever more closely with risk management and internal audit, for example, to ensure that the best practice and all necessary regulations and standards are complied with. In the past five years, the standing of corporate counsel has improved in both the legal profession and the corporate community. According to Deloitte’s Forensic Corporate Counsel Survey 2010, five years ago 40 percent of general counsel were members of their organisations’ senior management or executive team. The figure has now increased to 63 percent. Furthermore, in 2005, 64 percent of senior management would have first sought legal advice from their General Counsel. This figure has now increased to 92 percent. In-house lawyers are getting more involved in different areas of the business too. The survey found that the average number of non-legal roles held by a General Counsel in an organisation has increased from about 2.4 roles to 3.7, the most common non-legal roles being company secretary and those associated with risk, compliance and regulatory responsibilities. Today’s General Counsel is expected to take on a broader role. Rather than someone with a sweeping understanding of various areas of law, today’s General Counsel is a well-rounded business person with commercial acumen as well as technical expertise in the law. This leader aligns the function’s strategy with that of the company. Opportunities to work with other functions and operations are now even more essential to develop and hone their business acumen. Great Expectations from Business Leaders Just as the CEO needs a CFO who understands accounting, a CEO needs a lawyer who understands the law and is good at it. Today’s General Counsel is also expected to have courage of conviction. They need to be able to put their opinions into practice and challenge the CEO whenever necessary. The relationship between General Counsel and the business leaders of a company needs to be embedded in trust and mutual respect and understanding. Kenneth Ng, who has been the General Counsel Asia Pacific at The Hong Kong and Shanghai Banking Corporation for 24 years, currently managing a team of 30 in the region, agreed and added “You need to have the guts and skills to challenge the CEO in a constructive but assertive manner and who will listen to you when you challenge him. The phrase “courageous integrity” was coined by Stuart Gulliver, Group Chief Executive and Chairman of the Group Management Board at HSBC Holdings. With your confidence and assurance of your own judgment skills, you must be able to stand by your decision without coming across as stubborn. You must be a leader, who is trusted with good judgment – someone with courageous integrity. Frank Lavin, Chairman of the Public Affairs Practice for Edelman Asia, global public relations firm, stressed how critical good people skills are. The lawyer needs to an effective communicator to develop stronger relationships right across the board. As the role of the General Counsel continues to evolve, so too do their corporate and business responsibilities change. Leaders of the commercial world are becoming savvier in terms of basic legal concepts and have a better feel of the more complex legal and regulatory requirements. “Much like the doctor and the smarter patient, the patient is now becoming more informed and less hesitant to challenge the doctor’s recommendations”. General Counsel must therefore be someone the CEO trusts and someone he is comfortable sharing virtually everything with, i.e. a business partner and a trusted adviser, not just a lawyer. “We must not only be seen to be there for them to solve problems but must become someone our business leaders will turn to, if merely to bounce-off ideas”, said Ng. If a proposed and desired outcome is not possible, a General Counsel would allow the business partners to come to that conclusion themselves. He prefers to give them sufficient credible data and ask them questions that would lead them to draw that same conclusion themselves. Here are some questions that a group of CEOs ask themselves when rating their own lawyers: What Business Leaders can do Lavin made an excellent suggestion to this list, and that is to bring business people in earlier into discussions. Consulting lawyers at the very end of lengthy periods of discussions and negotiations in the decision-making process can be a complete waste of time. “We are missing out on their wisdom. A collaborative approach makes much more sense. Compared to other Chief Officers, the Chief Legal Counsel has a clear advantage of having a broader understanding of the business with more horizontal views across sections of the business. This gives them a span across the business that is wider than any other functional officer”. To become a successful General Counsel, one needs the cerebral capability to deal with complex issues in order to achieve the required business objectives. For this, a General Counsel needs not only knowledge of the law and high personal integrity, but also sound business judgment, courage and excellent interpersonal skills. clim@dhrinternational.com To download the ASIAN-MENA COUNSEL Article Click here |
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