At Mitratech, we have been talking for some time about how — now more than ever — the general counsel plays a critical, strategic role in the company. In a white paper of ours, Legal As a Driver of Competitive Advantage, we explored how the GC and the corporate legal department have several specific opportunities to significantly affect the strategy of their company, and even give the company an edge over its competitors.
This observation continues to have currency, as evidenced by a recent InsideCounsel article, “General counsel get tapped more for business and strategic advice”, which in turn cites research by BarkerGilmore and NYSE Governance Services. The research — focused on what functional expertise & traits companies are looking for when hiring GCs — suggests that the GC’s strategic role continues to grow. Companies are looking for GCs whose most valuable function will be to advise the CEO & the board, who can serve as part of the executive management team, who can also serve as a Chief Risk Officer, and who are more business minded and strategically oriented than in the past.
So what will this next generation of strategically-oriented GCs actually be asked to do? As we suggested in Legal As a Driver of Competitive Advantage, there are at least 5 key areas in which the GC and the legal department will serve the strategic goals of the company:
1. Optimizing spend – This isn’t just about cost control, but about actually optimizing the spend — and the processes of spend — in a way that maximize the value for the dollars spent. Focusing on optimizing the process of billing and spend management could be the most practical and fastest way for a GC to deliver strategic value, as both time and money associated with the engagement of outside counsel can be drastically reduced.
2. Protecting and managing the intangible assets of IP and Brand – The critical asset of Intellectual Property can’t be effectively defended unless it is easily traceable to begin with. Moreover, building a brand takes years but can be devastated in an instant; managing all of the elements that comprise or impact Brand is a tall order, but one that any strategic GC must contemplate.
3. Optimizing risk – Straight risk management/mitigation is a crude tool. The Next Gen GC understands that risk is actually an asset to be optimized, as it represents the flip side of opportunity; to wit, high risks may be worth taking if the payoff actuarial is right. Doing this effectively requires not only the right philosophy, but the business acumen and the tools necessary to place value on risks and take action on the levers of risk and mitigation as appropriate.
4. Data-driven decision making – Our world is so complex, and the velocity of business so high, that our human brains can’t keep track of all the variables at once – much less know what decisions to make with the information. Because of this, it’s critical to have tools that enable effective decision-making based upon the data which, in turn, represent the business facts. This requires a lot of upfront preparation: defining KPIs, instrumentation, creating workflows for response to new findings. The strategically minded GC will invest in this preparation because the payoff of fact-based decision making is enormous.
5. Commercial acceleration – Time is a currency of business just as money. Quick responsiveness, distributed and automated services, and a strategically-informed focus on reducing friction in the most urgent interactions between business and legal will all serve to accelerate the commercial success of the company as a whole. This is as much about process optimization as it is about tools and data.
Companies are looking for GCs who are more strategically minded. The Next Gen GC fully recognizes not just that the legal department can actually be an agent of competitive advantage, but sees how they will do so.