Vodafone’s general counsel Rosemary Martin reflects on the skills required of GCs to shape the organisation around them.
The general counsel wears many hats; one of the interesting ones is the Shaping Hat. Wearing this natty little number, the GC can draw on their manifold skills in ways that shape – or help to shape – the organisation in which they work (or even the industry or, indeed, the whole society in which they work… on a good day). This article looks at ways in which GCs can shape organisations and at the skills and attributes that make them well suited for this work. Here, the GC is referred to as ‘he’ but, in the charming but fading language of old legal drafting, in this piece ‘the male embraces the female’.
Defining the role
JP Morgan famously remarked: ‘I don’t know as I want a lawyer to tell me what I cannot do. I hire him to tell me how to do what I want to do.’ Thus speaking, he captured the essence of the GC’s role: to be an enabler of the corporate strategy, providing the legal ‘how’ to the board/chief executive’s strategic ‘what’.
As ‘the main lawyer who gives legal advice to a company’, as the Oxford dictionary defines him, the GC is usually a member of the executive team running an organisation and is frequently present in the company’s boardroom too. He is often deeply involved in the preparatory work needed to bring an idea to a decision point; he is there when the decisions are taken that shape an organisation; and he is almost inevitably involved in the execution of those decisions. The GC is at the table and has a significant role to play.
In their article on GCs, Roellig and Love succinctly describe the role as being one that ‘uses legal strategically’. The work of the GC and his legal team typically involves: providing an organisation with legal advice and legal transaction services; monitoring and influencing new laws and regulations that may affect the organisation; running compliance programmes; managing legal and other risks; advising the board and executives; and taking a leading role in setting the ‘tone from the top’ in an organisation.
Often a GC’s role will also encompass other elements such as corporate governance, corporate affairs, diversity, or corporate responsibility. The GC’s role is such that he can, in the breadth of a day, scale the heights of highly strategic, significant contributions which shape an organisation’s destiny and descend to the lowly depths of granular but important minutiae that need to be carefully completed.
The following example may serve to demonstrate the role a GC can have in shaping an organisation. Company B, a subsidiary of Company A, was set up to make a business out of a new piece of technology that showed promise but was, as yet, unproven. Mr X, an in-house lawyer from Company A was assigned to Company B as its sole lawyer. His task was to support the new management team as they set about creating a new business.
Mr X negotiated the leases for Company B’s first offices; he prepared the employment contracts that were used for the first employees (which served as templates for contracts for subsequent employees); he created a governance structure; and put in place governance controls to ensure a proper flow of information to the board and to the parent company. He wrote Company B’s first set of ‘business principles’, which set out how the company expected its people to conduct themselves – the company’s first code of conduct. He drafted and negotiated the business contracts that were the basic building blocks of the company’s business. And he arranged for the company’s intellectual property, its trademark and logo to be protected, initially in Company B’s home market and later across the world. As Company B’s business flourished, Mr X took on more lawyers and started to build a legal team.
Just as Company B’s business took off, so did its competitors. Competition authorities and regulators began to take a serious interest in this new sector. Mr X found himself busy seeking to influence the lawmakers so as to prevent the fledgling business from being stifled by overbearing or ill-thought-through regulation. Company B decided to expand overseas and Mr X began advising on the legal aspects of international acquisitions. Now he needed to select external counsel to advise the company too. A series of successfully executed mergers-and-acquisitions transactions (in which much of the deal structuring and all of the legal work was done or overseen by Mr X) positioned Company B as an international leader in its sector. Thus far, Mr X had been a key player in Company B’s launch and expansion.
Now Company B was ready for a listing. Mr X worked with the company’s board and its financial advisers to determine the best markets to list in. A massive amount of careful work by Mr X, his legal team and colleagues in the finance and other functions resulted in a successful listing on the London and New York stock exchanges. Now Mr X had to add US legal savvy to his skill set and he began to think about how to ensure the company was set up in a way that would minimise the company’s exposure to US litigation risk.
Furthermore, with an organisation that now had substantial subsidiaries around the world, Mr X recognised the need to work with the chief executive and the HR director to develop a corporate culture that blended entrepreneurial zeal and ‘can-do’ attitude with due respect for the law and the company’s core values of integrity and fair dealing.
Success breeds envy and disaffection, and before long Mr X was marshalling his legal troops to defend aggressive litigation against the company that threatened to harm the company irreparably. The company was pivoting on the brink of a litigious cliff; only the consummate skill of the law firm acting for Company B, carefully selected by Mr X, saved the day.
Some years passed and the madcap days of heady growth dimmed to a mellower period of steady but less exciting business performance. Of course, investors maintained their pressure for continuous growth and in due course the board responded by bringing in a new chief executive to drive up shareholder returns.
The new man on the block was also new to the sector and Mr X played an important but invisible role in metaphorically taking the chief executive’s arm and gently guiding him through the treacherous waters and dangerous shoals of the legal and regulatory minefields. This enabled the new chief executive to establish himself as a credible player in the industry. Occasionally, with the finance director, Mr X found himself having to persuade the new chief executive to steer away from some particularly risky course he intended to pursue.
Towards the end of his career, Mr X found himself increasingly sought out by up-and-coming young executives – not only lawyers – who turned to him for mentoring and guidance – advice he gladly gave as he firmly believed that influencing others to do the right thing was one of the most valuable contributions he could make to shaping the organisation.
Characteristics of a successful GC
During his career, what skills and attributes did our hero GC bring to bear on the task of shaping the organisation? Referring again to Roellig and Love’s article on being a GC, the following characteristics that they describe are particularly relevant when a GC is wearing his Shaping Hat:
- Ability to anticipate legal issues and risks
- Ability to inspire and influence others
- Impeccable ethics and integrity
- Industry expertise
- Politically savvy and tactfully
- Technical legal skills and the ability to source them effectively
- Ability to develop legal strategy and objectives
- Corporate and securities law experience
- Litigation skills
- Risk and dispute management skills
- Regulatory skills
- Compliance programme leadership skills.
Although these identifiable traits are characteristics of successful GC, the role can be performed in numerous ways by diverse players: there is no ‘cookie-cutter’ model of the perfect GC. And most, if not all, of these skills and attributes can be learned, as they are not necessarily innate.
The learning takes time – it is perhaps not entirely coincidental that in the executive teams of large listed companies, it is not unusual for the GC to be an ‘elder statesman’ and often one of the longest serving in the team. That said, there are many superb GCs who are busy shaping their organisation while still in their salad days. Different organisations require different kinds of GC, but every GC has the potential to shape the organisation.
Rosemary Martin is general counsel at Vodafone Group plc
- This is the latest in a series of thought leadership articles on the in-house lawyer sector. It is an edited version of a chapter in The Future of the In-House Lawyer: The General Counsel Revolution, published by The Law Society (£79).