By Andrejs K. Bunkse
Thirty years ago, most CEOs and Boards looked to senior counsel at an outside law firm for their legal support. As the corporate world has evolved in dizzying ways, so has the belief that a company’s outside legal service providers can be expected to holistically assess the challenges their clients face and advise at the enterprise level. Most practicing attorneys don’t have the decision making responsibility of the modern executive and in most cases the standard hourly billing arrangement would blow a hole in a company’s bottom line.
As an example, let’s consider the enhancements in communication tools that we all love to use. Our communication tools over the last 100 years have gone from “paper/quill/ink/stamp/mailman/one recipient” to ”smartphone/e-mail/send/“cloud”/millions or billions of unintentional recipients”. We can communicate complex, sensitive information more simply, more quickly, and to more people than ever before. However, the information we communicate remains as confidential, proprietary, market-moving or inappropriate as ever. Who would have thought this marvelous communication device could cause so much mayhem?
In this instance, your average senior partner at an outside firm may not be aware of your company’s policies outside of the matter they work on, but your friendly General Counsel will have a much broader perspective on management practices. Whether full-time or part-time, the GC is likely to have a plan in mind that would quickly and clearly establish WHO can communicate on behalf of your company, WHAT information may be communicated, and WHEN it may be communicated. Not only did your in-house counsel just reduce your risk exposure, he or she likely made it easier to communicate internally, made your social media efforts more likely to succeed and made it easier to manage your brand!
What else can your GC do? They have the ability to bridge the gap between legal counsel and actually making commercially astute decisions with respect to regulatory scrutiny, IP protection, managing difficult customers or vendors, and the commercial viability of acquisitions or mergers. Given time and budget constraints, it makes sense to bring oversight of legal and compliance under the management of one person or department.
It may appear daunting to the CEO to have to justify the expense of filling another executive position. What are the benefits of the GC’s oversight of legal and compliance functions?
- A GC is able to manage costs more effectively through a combination of knowledge of billing practices and their ability to whittle out unnecessary or redundant services.
- The right GC enhances revenue by using legislative and regulatory resources to proactively open markets and expand market share.
- The company has an advocate that integrates corporate goals and objectives into legal and government affairs management.
- Having a GC means your CEO, CFO or COO can redirect their time back to their core competencies, rather than having to manage legal issues.
If an in-house legal department can’t be squeezed into your budget, an outsourced general counsel can accommodate almost any budget and scope of services. A flat fee or retainer is usually most advantageous, allowing clients to budget for the service and be guaranteed they will get the direct, dedicated attention from their outsourced GC.
Companies of every size are inevitably faced with material challenges, threats and opportunities best addressed with the input of an experienced general counsel. Finding the right person, with commercial and legal sensibilities, who fits within your corporate culture, makes it easier for an enterprise to flourish with far less risk taken.
© 2016 Endurance Strategies Group, LLC