Are in-house counsel ready to be business leaders? It seems a strange question to ask given the level of education and training of most in-house lawyers and the dramatic expansion of the size and responsibilities of legal teams over the last 15 years.
And yet, leadership remains an issue that hangs ominously over the careers of in-house counsel. As they take on work that once would have gone to law firms and deal with mounting organisational, legislative and regulatory complexity they are often pushed towards the technically-demanding side of their legal role. Meanwhile, colleagues from finance, marketing or sales teams remain far more likely to be promoted to senior leadership roles within the company.
Nevertheless, it is clear that a growing proportion of in-house counsel, both at general counsel (GC) level and at the more junior end, are intent on assuming leadership roles once seen as well outside the remit of the humble in-house lawyer. The wider trend of embedding lawyers more deeply into the governance and business of major plcs is also giving counsel a taste of what leadership looks like, and in-house lawyers increasingly find themselves working in legal teams that rival the size of major international law firms while embracing wider commercial roles. Tougher compliance and increased dispute risk are bringing lawyers closer to the heart and head of major corporates at key moments, and for many in-house counsel, this is an opportunity they intend to seize.
‘General strategic and management skills are becoming more important as the expectations and needs of our business colleagues change,’ says Michael Coates, UK head of legal at Shell.
‘The push towards greater “business partnering” means that legal departments need to play a more strategic role in an organisation – and this will demand a broader contribution from the in-house team using a broader set of skills.’
Realistically, what it takes to be a legal leader will vary according to the state of the company a GC is advising, ie whether that company is in crisis mode, whether it is going through a restructuring or turnaround or whether it is performing well with mature policies, processes and strong growth markets.
Peter Beshar, Marsh & McLennan
When canvassed for this piece, in-house counsel had varying responses to what skills it takes to be a strong leader, from simply ‘knowing the business well’, to ‘not being afraid to make decisions’ and on a more personal level, the ability to ‘be a good storyteller’.
Although these are valid answers, on their own they provide little insight into the practicalities of what it takes to be a leader. Perhaps, as Philip Bramwell, group GC of BAE Systems, suggests, good leadership is simply a state of mind.
‘You’ve got to have a desire to manage and ultimately lead a team or a very large group of lawyers. It’s not for everyone. If you are not a people person, if you don’t feel passionate about leading, if you don’t feel you can formulate a vision for a group of people and set values, and if you don’t want to create opportunities for other lawyers to develop and grow their own careers, then leadership may not be something for you.’
Winning friends and influencing people
Rightly or not, GCs still see gaining board access and roles as the clearest demonstration of leadership. As Suzanne Wise, group GC and company secretary at Network Rail notes: ‘I sit on our main board as company secretary but because of my wider role and because I am a full member of the executive committee I find myself contributing more as an executive than as a lawyer, which means having a point of view, contributing and challenging. You’re there not just as a lawyer but as a member of the leadership team.’
However, to gain an invitation to the top table, a GC needs to demonstrate they have taken the initiative to familiarise themselves with all parts of the business, including those that have not traditionally gelled with the legal function.
‘For many lawyers our lack of financial acumen is a huge issue in fully functioning as a leader in business,’ reflects Peter Beshar, executive vice president and GC at Marsh & McLennan.
‘Many GCs don’t have MBAs and increasingly litigators rather than finance lawyers are getting jobs in-house because of the increase in investigations. In my own case, I quietly hired an ex-Deloitte partner who came into my office at 6pm every six weeks or so. I stockpiled everything I didn’t understand and he would walk me through it. Really the issue is that there is a whole nomenclature in the business world that someone needs to decode for you.’
Wise agrees: ‘When I left law school, I wasn’t very good with numbers, which is a real failing of lawyers. I forced myself to go through a number of courses on finance for non-financial managers. I hated every one of them but made myself do it because you’ve got to understand – at a minimum – the management accounts and the company accounts if you’re going to pass comment on what the business is doing.’
‘If you don’t want to create opportunities for other lawyers to develop, then leadership may not be for you.’
Philip Bramwell, BAE Systems
The bottom line for many GCs is that, if you want to aspire to senior leadership roles across the company, plugging such skills gaps is a big step towards achieving that goal.
Likewise, it helps if the GC has experience working outside the legal function. Wise had a three-month secondment in sales while Coates worked with Shell’s chief executive for three years before becoming UK head of legal. ‘Many organisations offer the opportunity to work in different departments and I would certainly encourage staff to consider broader roles if they are available – even if it means working outside your comfort zone,’ says Coates.
Having spent much of his career living and working overseas in the US and in Brussels, Bramwell is an advocate of gaining cross-border experience as a step towards leading a global legal team.
He notes: ‘Living and working outside your home jurisdiction for part of your career is very important. You need to be able to see your home country as others see it – to give yourself a sense of context and a degree of humility that where you grew up is not the centre of the planet.’
Additionally, Bramwell believes that the bedrock of any legal leader is building a credible track record as a business lawyer ‘who has worked in the trenches, in an operating business alongside the people delivering in challenging conditions. Delivering profit, creating value but actually being on the front line in a business, which is a long way from the headquarters or the c-suite’.
‘I don’t believe that you can credibly organise and lead a global legal department if you haven’t been through that experience and have the scars to show it. It’s difficult to structurally organise a legal department if you don’t understand what operational businesses need in terms of legal support.’
According to Daniel Toner, GC and group company secretary at Spire Healthcare Group, GCs not only need to make an impact with the board, but also externally on the industry.
He comments: ‘That means not only plugging in to your peers but also being engaged with the regulator, the political establishment – in our case the Department of Health, NHS England, NHS Improvement – to help inform and influence legislative changes and to develop regulations that work for the taxpayer, the state and for business.’
‘It is equally critical to build relationships outside the walls of the company as there are so many stakeholders who affect the success of the modern company: regulators, rating agencies, journalists etc,’ notes Beshar, picking up the point. ‘I feel strongly that as a GC you should be out trying to build relationships and getting to know other GCs, as this can be an incredible resource.’
For Clare Wardle, the former Kingfisher legal head who was recently appointed GC and company secretary at Coca-Cola European Partners, the most important factor is confidence. It is also, according to Wardle, the key skill many lawyers – even experienced operators – painfully lack, especially when moving beyond their narrow specialisms.
‘One aspect of that is the confidence to make decisions. One of the reasons that lawyers and GCs are not picked up to run things, whether that is projects or other businesses, is because there is a tendency for lawyers to say: “I’ve advised you – now it is your responsibility to take the decision.” As an in-house lawyer if someone asks: “Would you do this?” you should be able to say “yes” or “no'” or “I’d do it that way”, and take responsibility for that call and realise that your decision has financial implications and implications for people. That is something lawyers find difficult – it goes against their training.’
Another aspect of confidence, asserts Wardle, is the ability to quantify the financial contribution of the legal function.
‘A lot of people say: “I’m not prepared to put my money where my mouth is and I’m not prepared to say that I will be able to get a certain outcome in litigation.” You can see why they might not – because you can’t control it. But, equally, neither can the marketing department control everything they do and they are quite happy to man up and say that they are a profit centre. It is about a positive attitude to what you do. Fundamentally if you don’t have confidence that what you do is valuable and are prepared to stand behind it then no-one else is going to.’
Technophobes
Another area where lawyers traditionally lack confidence is technology – a field the modern GC may be increasingly unable to avoid grasping.
Julia Chain, director of RPC Perform and previously GC of T-Mobile UK, says GCs often put technology in the ‘too difficult’ category, but not embracing it only means GCs and their teams end up doing mundane tasks instead of higher-value work – directly affecting their potential as business leaders. Chain believes that the best leaders and GCs are known inside a business for a focus on high-level work instead of, as one GC puts it, ‘the crap on the desk’.
‘There are so many technology products around, everyone is trying to sell GCs something and they don’t know what they want. Their IT departments are very overstretched and they don’t really want to help. And there’s probably not much of a budget anyway. It goes into the “too difficult bucket”, which is a problem because it means they are operating in this rather low-value manual environment.’
Beshar echoes this theme, noting: ‘Digital disruption is a real space for GCs to take on the strategic challenge, own it and try to use their longer view to help the organisation turn a threat into an opportunity. I have organised trips to Silicon Valley for management so we can understand the mindset and see how we can work with it in our business.’
Large financial institutions are often ahead of the pack at deploying technology in their legal teams, partly due to the regulatory and compliance demands in the sector.
Lloyds Banking Group’s legal team is currently looking at how it can use automation to create a more streamlined in-house department and give legal the opportunity to focus on high-value work.
Clare Wardle, Coca-Cola
Other legal teams that have made efforts in applying advanced automation, such as document creation systems and document management systems, include RB (Reckitt Benckiser), ITV, Novartis and Bank of Montreal.
For Wardle, the latest technology does not fundamentally change the business model but it does provide the GC with opportunities. She argues that although external lawyers have removed themselves from the compliance and consultancy side of business as a result of technology, GCs have been pulled into such areas because they have a broader range and can be seen as an effective sounding board for a larger group of people.
‘If you integrate your technology properly into the business, then you should get a lot more data about issues. That enables you to understand what is happening in the business better and with your privileged position, sitting on the board and on the group executive or leadership team, you will be able to understand what issues need to be driven in a way that no-one else can because they don’t get the same 360 degree view of the entire business.’
Although in-house teams have grown substantially in size and stature in the post-Lehman years, perhaps the greatest indication that a GC is also a great leader will be the willingness to give some of that power away in future to technology or new law providers, while retaining only the most important mandates in-house. This may seem counter-intuitive, but essential in ensuring that a GC is seen as more of a strategic adviser, instead of another cost.
As Wardle concludes: ‘You should be – in a great measure – freed up from routine stuff. You and your team. There is this fear that lawyers will be put out of a job because their tiny little contracts or their small cases will be crunched by machines or by people who are outsourced in India and I think really if that is what you came into law to do then you should be ashamed of yourself. You have a got a very good brain, you have got a moral compass. Go and use it effectively to drive change.’
By Kathryn McCann
Additional reporting by Catherine McGregor and Alex Speirs
For the full report please see Leadership and the modern GC: a special report