The 'Modern GC' - 5 ways to add value.
What does it take to be an effective GC in 2021?
Before we dive into what makes for an effective General Counsel (GC), it’s helpful to briefly recap the role of a GC. At its most basic, a GC is a company’s ‘chief legal officer’. The key responsibility of a GC used to be focussing on legal compliance and risk management and mitigation. No doubt, these are critical functions and are the foundation stone of any GC’s mission statement – i.e., helping his or her company to mitigate risks and putting in place sound protocols, systems, and processes to ensure compliance with applicable laws and regulations. These are baseline requirements of an effective GC and, until recently, the expectations for a ‘traditional’ GC. Being a ‘good technical lawyer’ was, in most cases, good enough.
But in a fast-changing business environment, characterised by huge advances in technology, digitisation, and automation, this no longer suffices. The role of the GC is being reinvented and redesigned to meet the significant challenges of our times. CEOs and the C-Suite are demanding more and more from their GCs – and with good reason. They want their GCs to act and think like any other business colleague in the company, albeit with some specialised skill sets. This has given rise to the ‘modern GC’, whose primary purpose beyond risk mitigation is to ‘add value’ to the business that he or she supports. In a post-pandemic world, the pressure on GCs to demonstrate their value-add to the business will be more pronounced. Concretely, what does it mean to ‘add value’?
How can a GC add value?
Adding value requires the GC to adopt a different mindset and to look at the prism of the legal function through a completely different lens. Here are some ways that a modern GC can add value to the business:
- Get to (really) know the company’s business:
- It’s often stated but rarely followed through with the required level of conviction. It stands to reason that to be an effective business partner and trusted advisor, the GC must put in the time and effort to deeply understand the strategies, opportunities, and challenges, as well as the operational intricacies of the business.
- This means investing the time to talk to key stakeholders in core parts of the business – from finance, to IT, to Operations, to Compliance, etc. This also means gaining a deep understanding of the company’s customers, products, and services. So, be prepared to drink lots of coffee and have coffee dates with your key stakeholders, instead of only catching up when a fire needs to be put out.
- To add value, you must know the products and services that you are providing deeply. If you’re counsel at a technology company, you must know details of how that technology works and why customers buy what you sell. If you’re counsel at FMCG company, know your products, supply chain, competition, and customers.
- Only by ‘getting into the weeds’ will the GC be in a pole position to help steer and guide the company to bring its strategies to life and to realise its vision.
- Be strategic, practical and solutions focused:
- CEOs and the C-Suite are busy people. They don’t just turn to GCs for advice on legal and compliance issues. They also turn to their GCs for strategic guidance on how they can navigate the complexities of the law to capture and realise business opportunities, and to grow and expand the business in existing and new markets.
- A GC can add value and earn the trust of the C-Suite by demonstrating that she can offer practical solutions to complex problems; and that she can actively and thoughtfully participate in discussions on business strategy and the company’s operations and offer a unique perspective.
- Build an effective partnership between Legal and Business:
- An effective GC intrinsically understands that a successful partnership between Legal and Business is based on mutual trust and respect.
- By building core capabilities in the business through regular training and development (e.g., in workshops on core legal processes such as contract negotiations, identification of risk and mitigation, and fostering a culture of compliance), together with effective stakeholder engagement and management, the GC can build a sustainable and long-term partnership with the business.
- For example, provided that appropriate guardrails and operating rules are in place, there’s no reason why self-servicing platforms (e.g., for simple processes such as NDAs, lower value standard-form contracts, standard processes for lower risk items, etc) cannot be introduced to speed up the transactional or contracting process. This will empower business colleagues to take more responsibility and accountability to drive and own the business transactions on which they partner with the Legal team.
- Invest in Legal Operations and LegalTech:
- Investing time and money into an optimal legal Target Operating Model (TOM), including having a dedicated part-time or full-time Legal Operations Manager, will help the GC to run his or her Legal team more efficiently and effectively. (In the coming months, we’ll be publishing a White Paper on the optimal TOM so stay tuned for that!).
- Legal Ops is about having standardised and streamlined processes, systems, and tools in place to assist team members to be more productive. Increased productivity unlocks capacity for team members to focus on higher value and/or more strategic work. This not only creates added value for the business but provides team members with better career opportunities and enhances employee motivation and engagement. Team members can then focus on the legal tasks they like doing, instead of chasing internal approvals for billing, for example.
- A well-conceived TOM creates the right conditions on which Legal can thrive and support their business colleagues by having streamlined and efficient processes (e.g., process maps, playbooks, SOPs, cheat sheets, etc) and tools (e.g., contract management & automation software, document management and knowledge management platforms, etc), clearer roles and responsibilities, and better accountability that is tracked against an agreed set of KPIs (see Point 5 below). And don’t put the cart in front of the horse - you need to determine what process a certain tool should support before selecting the tool.
- Embrace metrics and KPIs:
- Lawyers too often shy away from metrics and KPIs. The argument is that the practice of law is difficult to quantify and is not capable of being reduced to numbers. And while it can be challenging to create the right set of metrics to apply to a legal function; they can be found, and they do work. There’s no logical reason why Legal can’t be run like other business functions – the trick is in the design.
- The ability to measure and track a legal team’s performance against an objective set of KPIs can add to the function’s credibility and provides the business greater confidence that Legal can be held accountable because its value can be measured. Wouldn’t it be great to substantiate that Legal isn’t just another fee burner as people tend to think?
- Metrics and KPIs also give GCs insights into their team’s performance. Who needs more support? Is the team outsourcing too much or too little? What is the team good at? What should be improved?
- Value is generated because Legal is shown to be an intrinsic part of the company’s operations. The return on investment can be quantified – some examples are set out below:
- % work strategically aligned (i.e., work that should be done by the Legal Team);
- Ratio of high value work to low value work performed by Legal Team lawyers;
- Ratio of high value work to low value work performed overall;
- % legal work done by a traditional law firm;
- % legal work done by ALSPs; and
- Ratio of #FTE lawyers in Legal Team compared with overall legal budget.
- This increased level of transparency and accountability enhances the level of trust between Legal and Business.
As we’ve seen, being a modern GC means adopting a completely different mindset and embracing new ways of doing things. Hopefully, we’ve been able to highlight in this article a few practical ways in which the modern GC can add value to his or her business
Feb 25, 2021
We’ve been speaking to our customers from different industries to get some insight on how they’re navigating their legal departments during tough times.