10 Tips For A New General Counsel
Advice for lawyers who are new to the top in-house job.
Congratulations — you’ve been hired as a general counsel or chief legal officer, your corporate employer’s top lawyer. Serving as a GC or CLO comes with impressive power, prestige, and pay.
How can you make sure you have a long and successful tenure as a general counsel? Here are some tips gleaned from “Ten Things to Know About the In-house Revolution Before You Start Your First General Counsel Position,” a great panel at the 2016 Annual Meeting of the Association of Corporate Counsel (ACC), featuring the following speakers:
- Ben Heineman (moderator), Senior Fellow, Harvard University, and former General Counsel, GE
- Michael Bailey, General Counsel, Bechtel Group, Inc.
- A. Douglas Melamed, Professor of the Practice of Law, Stanford Law School, and former General Counsel, Intel
- Lori Schechter, Executive Vice President, General Counsel and Chief Compliance Officer, McKesson Corporation
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Ben Heineman opened the discussion by noting the two elements of what he calls the “inside counsel revolution” (the title of his acclaimed book, The Inside Counsel Revolution: Resolving the Partner-Guardian Tension (affiliate link)):
1. In-house lawyers have become part of management, involved in both business and law.
2. Outside the company, there has been a huge shift in power toward in-house legal departments. Corporate counsel now have more control over pricing when they negotiate with law firms. GCs are now serving as public figures for their companies, increasingly talking to the press and serving as public spokesmen for their employers (e.g., Brad Smith of Microsoft).
Heineman then outlined four key concepts that in-house counsel must keep in mind:
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1. The mission of the corporation. This includes ethical as well as economic concerns.
2. The lawyer-statesman. Is it legal, and is it right?
3. The partner-guardian. In-house lawyers are partners of their business-side colleagues, but they are also guardians of the company who must push back when necessary.
4. The culture of integrity. This ultimately must come from the CEO, but in-house lawyers play a huge role as well.
Now, on to the ten tips. Note: these are tips that I pulled out from the stimulating and wide-ranging discussion; the panelists did not explicitly enumerate them. (As Ben Heineman said in explaining that the panel would not be naming the ten tips promised in the panel title, “I’m a pale imitation of David Letterman.”)
1. Build a partnership with your business-side colleagues.
It’s familiar advice for in-house lawyers — think more like a businessperson, and work closely with your business colleagues — but it bears repeating. Lori Schechter of McKesson said that since taking the GC job two years ago, she has tried to break down internal silos and create task forces that bridge divides between legal and other departments.
2. Get some operating business experience.
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A practical pointer for how to work better with the businesspeople. Michael Bailey of Bechtel said that he initially dismissed this advice from a senior colleague, but eventually came to see its wisdom. Over the years he has rotated through several business roles, including running a business unit, and it has changed how he perceives his legal role and increased his effectiveness in it. As GC, you don’t need to necessarily run a business unit, but you do need to work closely with business colleagues, on a day-to-day basis.
3. It’s all (or mainly) about the people.
Bailey said that lawyers, trained on billable hours and legal substance, often overlook the importance of interpersonal relationships — which Bailey described as “the most important part of what I do.” The general counsel must build a team and then develop it, which includes hiring, mentoring, dealing with underperformers, and firing. The GC must also maintain relationships with top executives like the CEO and CFO.
4. Strive to be (or remain) an excellent lawyer.
This recommendation, from Douglas Melamed, was something of a counterpoint to Bailey’s emphasis on relationships. Melamed argues that you as GC shouldn’t just manage the legal department, oversee outside counsel, and run the budget. Instead, you should still continue to practice law, modeling and embodying the integration of the legal function into the business strategy function. Business decisions are enhanced when there’s someone at the table who has a lawyer’s perspective. For example, a GC can identify opportunities to use law to advance business goals (e.g., using a change in law to advance a product or challenge a competitor).
5. Work collaboratively with outside counsel.
According to Melamed, GCs too often brag about how they “beat up on outside counsel” and get cheaper and cheaper rates from their law firms. This can sometimes be shortsighted. Melamed urged general counsel to find outside counsel that they trust, have them get to know the company, and build the relationship by giving outside counsel repeat business. External counsel have a distinctive role to play in protecting and advancing a company’s legal interests.
(Heineman did offer some caveats here. As GC, you don’t want to overpay for commodity work, and you want to pay a fair but not excessive rate for high-stakes, high-quality work.)
6. Develop strong relationships with other C-level executives.
A practical pointer: proximity matters. Melamed recalled that when he got to Intel, there was no C-suite in terms of centralized management; top executives worked out of several different locations. He successfully persuaded the CEO to bring the C-level execs under one roof. “You want to be able to stick your head in someone’s office or chat with someone in the hall,” he said. These types of casual conversations sometimes unearth important issues and let a GC nip a problem in the bud.
If you can’t achieve physical proximity, at least be sure to schedule regular meetings or calls with your CEO, CFO, and other leading executives. Calendaring in the corporate world can be a challenge, especially for busy top execs, but make it a priority.
7. Serve as a steward and guardian.
Bailey of Bechtel noted that he works for a company that has been around for more than a century, with a reputation to uphold. The company and its reputation were built by thousands of people before him, and as GC he feels a responsibility to preserve the company and its reputation for future generations.
8. Inculcate a culture of compliance to both law and ethics.
This is an extension of serving as a steward and guardian. Upholding the highest legal and ethical standards makes business sense — “It’s profitable to be a compliant company,” Schechter noted — and it’s the right thing to do. Heineman pointed out that this isn’t just a legal function. Instead, you as GC must make business leaders responsible for adherence to law and ethics; it shouldn’t just be “outsourced” to legal.
Melamed said that if your company doesn’t have one already, you should implement some internal system for employees to confidentially report misconduct within the company. Every employee should be empowered to take legal and ethical issues seriously — and must be protected against retaliation if they do speak out. And, Heineman noted, there must be consequences for employees who learn about wrongdoing and fail to report it — including firing if appropriate.
9. Pay attention to your colleagues’ career paths, and keep succession issues in mind.
It can be tricky to maintain fulfilling in-house career paths. There’s just one top job; how do you keep longtime lawyers engaged in their jobs if the GC will be in that top spot for a while?
The panelists offered a few ideas. Bailey described how he has tried to create an atmosphere that feels like a partnership, where senior lawyers feel like they are part of leadership. Melamed talked about making sure that your colleagues are continually developing valuable, marketable skills (even if that might mean that the lawyer in question takes her talents elsewhere). Schechter recommended giving employees some side projects that let them stretch and try something new for a short period of time, to help them explore what else they might be interested in beyond their core legal competencies.
10. Don’t be afraid to quit.
It doesn’t matter how many stock options you have, how generous the long-term incentive plan is, or how much you might earn if your startup gets sold or goes public. You need to be willing to walk away from your job as GC — and your colleagues should be aware of that willingness, so you can have credibility in tough conversations where you are forced to tell the businesspeople what they don’t want to hear.
Serving as a general counsel is a great job — but to do the job properly, you have to be prepared to sacrifice it if necessary.
2016 ACC Annual Meeting [Association of Corporate Counsel]
David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@abovethelaw.com.
