04:26, November 07 71 0

2017-11-07 04:26:07
Being a ‘lawyer to the lawyers’: how the law firm GC role is developing

The role of law firm GC – once a quirky, overlooked role – is growing in prominence. At a breakfast briefing last month, The Lawyer and Cayley Coughtrie gathered a group of them together to discuss what it means to be a law firm’s ‘trusted advisor’.

The role of a law firm GC is one that has grown up over the last decade or so – do you think it is properly understood? 

Sarah de Gay: In a corporate organisation, being a GC would signal that you were the most senior and best lawyer within that organisation, but in a law firm that idea might not go down too well!

Chris Perrin: I think the role of the GC is now pretty much accepted among law firms. When I was given the title, I was nervous about how it would go down with the partners but in fact there never was an issue. Now, I think eyebrows would be raised if a large firm didn’t have a GC.

I was lucky in the sense that the GC role came fairly soon after our merger – the firm was changing so much and people accepted that we had to do things differently. So it was easy for me, but I think other firms have struggled with that.

Jo Riddick: I think the perception of the role and the perceived benefits have changed over the years. I can remember someone saying to me that risk management was the administrative tail wagging the fee-earning dog, and I think there is more acceptance now of the benefits, particularly if you do have a consultative approach and people can come and see you.

Stephen Hermer: The challenges are very different for someone who’s come into the firm, rather than someone who’s been there for 20 or 30 years and then takes on the role. For the role to work, people need to have confidence in you – and that’s a much easier task for someone who’s already there. If you’re just starting at a new place it becomes a different exercise.

Perrin: I would have hated to come to my role from outside – I think it would have been very difficult. And over the years I’ve done it, I’ve added to what I cover. For somebody coming in from the outside, it would be almost impossible for them to come in and take the whole lot on in one go.

Chris Cayley: I’d be interested to know whether you think there are any disadvantages to having been involved in the firm for so long, and whether there are any benefits to coming in from the outside?

Perrin: I’m sure there are many ideas you could benefit from, and a new approach to risk management in particular. But I just think it is so important that you have credibility in the eyes of your partners – which you much more naturally have if you’re grown up in the firm, especially if you’re effectively asked to do the job. For the most part, if you need a fresh perspective from outside you can get that from more junior recruits.

De Gay: It’s about business empathy as well. If you don’t understand what it’s like to be a junior fee-earner in your firm on a day-to day basis I think it’s quite difficult.

Annette Fritze-Shanks: Yes, it’s about credibility again: “I’m a lawyer, I’ve been a fee-earner, I’ve been where you are, become a partner and gone through that process.” All of that gives you a bit more cache with people who you are trying to influence, be they partners, fee-earners or members of support teams.

Hermer: I think in practice many firms will want a long-time partner as GC – but all of that said, we all see among our clients the ability to hire CEOs from different industries. At Olswang we hired a GC who came in from outside the firm, hadn’t been a partner at a law firm and did a fantastic job and built a good relationship with the partners. I think it’s difficult but it’s not impossible.

Riddick: I think it’s also about your background and what you can bring to the role, and that is potentially more important than just having been at a firm for a long time. I had a litigation background, then I went to the Middle East where Sharia law meant that the opportunities for litigating weren’t that good. I became a corporate partner instead and that background has been really useful.

Should the role be a prominent one within the firm? How visible should you be?

Derek Ellery: It’s one of those roles that if you’re working satisfactorily you can operate under the radar. I don’t really seek to publicise it; I don’t see the need. Most lawyers are happy to know that it’s happening – all people need to know is who you are and how to get to you. You can give people all the information in the world and it’s amazing how often they won’t bother reading it and will come to you just to have you read chapter and verse of it. That has been my experience.

Hermer: There is always a group of partners at a firm who are very keen to get a second opinion and use you as a sounding board and are happy to come to you in a confessor way.

Jonathan Westwell: I think it rather depends what the role is. It can range enormously at different firms – whether you’re part of the executive team of the firm or the statesman. I think the profile depends on what you’re actually supposed to be doing.

Sarah O’Neill: I think with the broader GC role there is the opportunity to step back and add value where you can in all sorts of different areas – finding more about the strategies going on, the innovations taking place within the firm, and getting know people. I do feel like raising profile and visibility is one of the things I need to do at the firm to enable people to tell me what it going on. Especially if you’re combining the COLP role, you really need to have that conduit of open communication. My greatest fear is not knowing what is going on in the firm, not having that visibility and not being able to take appropriate measures as a result. I need to get involved in things that aren’t traditionally seen as a professional practice risk.

Westwell: It’s a case of ‘be careful what you wish for’, because profile is great, but sometimes you get asked about small tasks which can be very distracting.

How much is the role shaped by the partnership and how much by the personality and desires of the individual GC?

Gareth Roberts: I think the role is shaped by the person who does it. The firm chooses a person and then the role adapts to the person.

Westwell: There’s a real risk that actually this role can grow in any shape or way. It is a three-way conversation between you, management and the partnership about what the GC takes on. When I first stepped into the role, people asked me if they really needed someone doing this. Now it’s about what we shouldn’t do.

Debbie Jukes: I would agree with that. I ask my team what they are doing, because we’re not there to answer every single query that someone can’t be bothered to look up.

Do you think the GC should sit on the board or remain independent from senior management?

Ellery: I would say no. I wouldn’t feel comfortable wearing two hats. Yes, you should be there and be required to give advice and general counsel as the title suggests, but I think you should keep yourself separate from the client you’re giving advice to.

Perrin: I think our view is the complete opposite and one of the reasons is because we want to make sure that the risk factor is taken into account in absolutely everything we do as a management team. I think either way works.

O’Neill: I think it’s very useful to be at board meetings to find out what’s going on and to make sure your advice is strategically aligned but I don’t think that having a vote helps with maintaining the independence and objectivity of the advice so it’s good to have a hybrid. I attend the board as a company secretary as well so I switch between the two.

Riddick: Law firms structure their management boards differently as well. I’m a member of the exec, which means that I meet every week with the heads of HR, finance, and the managing partner but there’s a separate policy committee of which I’m not a member. To maintain my independence from that is quite valuable. But I suspect we’ve got as many different management structures as we have people in the room.

What kind of person is going to suit this role? How do you pitch it as a desirable career option?

Perrin: It depends on what the role means in the firm. In terms of Clifford Chance, it’s a fantastic role and I’ve never regretted doing it. The person that takes it on needs to be in their late 40s and do it for the rest of their career. It’s not something you do for five years and then go back to fee earning, or do as a semi-retirement job. Ideally it should be a litigator, because part of the job is the claims and insurance side and being a litigator helps.

Tanja Podinic: It’s interesting. I was in construction litigation and moved into compliance and risk. Maybe in ten or 20 years time the situation will change and a GC within a law firm will come up through the ranks as a risk and compliance lawyer, because there are so many lawyers now who are just doing risk and compliance straight out of law school. I think it would be challenging to earn the trust and respect of the partnership having not brought in the money.

Jukes: I have quite a few lawyers in my team who are five to seven years qualified, are doing a great job and I’m thinking ‘How does that career path work for them?’ As we’ve discussed, there’s a natural desire to bring in a partner who everyone respects, but that does raise the question of what happens to all of these talented and committed people.

Perrin: Promoting those people may ultimately be a better structure because someone transitioning from being a fee-earning partner to the role may have no experience in risk management, compared with somebody who has grown up in that process and who may be a much better candidate.

Roberts: I agree with that. Firms have responsibility to spot those people and should do what they can to broaden their experience.

Hermer: It depends on whether firms see risk management as a central component of the GC role. There are some firms where there is a separation. I could theoretically see a situation where risk forms a separate role to the GC role and I suspect that is not a model many law firms will embrace.

Perrin: It also depends on whether conflict management is part of the role, which it is in our case. It needs someone with the authority to say ‘You’re not going to act on this’ and for partners to accept it. Someone who hasn’t been a fee-earner may struggle to do that.

Charmain May: I do think people are going to see some of these roles as very desirable and there’s going to be more of a fight to be General Counsel compared to in the past, when it was probably a tap on the shoulder and someone saying ‘how about it?’ or people growing into it organically. It will become much more of a strategic appointment as we go forward.

Cayley: I wonder if we’ll see a law firm GC become a CEO in the future or even senior partner?

Riddick: I could see GCs moving to CEO role because they already have a holistic role.

Ellery: My sense is that most wouldn’t desire it. I used to be a managing partner and the personalities of those who strive for the CEO role are different compared with the types of people we are.

Perrin: I don’t think a firm would want it either – you create another problem with the GC becoming CEO, because you’ve then got to replace the GC.

What are your thoughts or hopes about how the GC role will develop in the coming years? 

Ellery: Most firms now are always looking at costs and efficiency and there will be a need for the GC to be a support to central services. I think there will be a constant need to strive for efficiency and to combine with colleagues in IT to make sure we are offering a holistic service.

Perrin: I think teams will grow. Comparatively speaking, our teams are tiny. I remember asking for one extra person in my compliance team; at the same time HSBC was recruiting 700 people to their compliance team!