Edith Wharton, the novelist and social chronicler, remarked “There are two ways of spreading light: to be the candle or the mirror that reflects it. “ Chief Legal Officers are both candles and mirrors of the legal profession. To understand their role and its interconnected functions is to see tomorrow’s lawyers. Why? Short answer: “being a lawyer” requires legal, business, technology, and process expertise as well as the ability to collaborate seamlessly with other professionals and paraprofessionals. CLO’s function this way—tomorrow’s lawyers will too.
Take It From A Reliable Source
Ben Heineman, Jr. is a highly credible source when it comes to delivering legal services. Several pundits point to his move from Sidley & Austin partner to General Counsel at GE as a turning point in the evolution of the GC (a/k/a CLO)—and the in-house role, generally. Law firms previously had a lock on elite legal talent, and that’s why they enjoyed a monopoly over the delivery of legal services. But as elite lawyers like Heineman moved in-house, they redefined the role of CLO and, in so doing, redefined how its occupants functioned within the enterprise. They also created a template for how all lawyers will soon function.
Heineman recently wrote an informative book, The Inside Counsel Revolution: Resolving the Partner-Guardian Tension, examining the evolution of in-house counsel. He contends that the GC role now “involves not just dealing with past problems, but charting future courses; not just playing defense, but playing offense; not just providing legal advice, broadly defined, but being part of the business team.” In one sentence, Heineman captures the transition of GC’s to a far broader role than lawyers had previously served. They remain as company last defenders but they are also integral components of the broader enterprise. In a sense, they are equal parts lawyer and client– weighing in on key business decisions. In an age when major corporations function across multiple borders, rely heavily on technology, and run complex multi-cultural operations, the GC’s “defensive” and “offensive” roles is a challenging hybrid role that redefines how lawyers function and the skillsets required.
Heineman identifies the dual and often contradictory roles of corporate defender and business partner as the greatest challenge to General Counsel—and their legal teams. All lawyers inevitably experience tension with clients (e.g. “pushing the envelope”, waiving conflicts, fees, etc.), but their in-house colleagues contend not only with the push-pull of zealous representation/legal ethics but also with friction emanating from their dual role as legal defender and business strategist/partner. Heineman notes that it requires great integrity and good judgment to navigate these potentially treacherous crosscurrents. And while some—myself included—maintain that to be a great lawyer involves a risk/reward calculus and the ability to persuade the client of the “right” balance, it’s intensified when the lawyer/business partner is an employee and reports to its decision makers. That requires an elevated level of integrity and judgment. A recent study of corporate director and officer perceptions of the CLO role conducted by Barker Gilmore confirms this. The respondents rated integrity and sound judgment above legal expertise as the most important competencies for CLO’s. It says a great deal about the GC role when legal expertise is eclipsed by other competencies as the key skillsets.
CLO’s Provide A View Into How All Lawyers Will Function
It’s fair to ask: “how many lawyers become CLO’s and how does this relate to the vast majority that don’t?” Short answer: what matters is the how the CLO—as well as other lawyers—function and the skills required. All lawyers will soon apply that blend of skillsets—albeit at different complexity levels—in the workplace. So what exactly are they?
Let’s stipulate that refined legal skills are a starting point. Naturally, CLO’s must be strong advocates, adept in identifying risk and balancing it against client objectives, have the ability to analyze complex legal and fact patterns, and ensure that the client is protected from unnecessary risk and catastrophic loss. This is the “defender” role—one that all lawyers play.
CLO’s also manage a supply chain that includes in-house and outsourced resources. They oversee internal departments that are often comprised of as many technical and process professionals (often described as “legal operations”) as lawyers. And they determine the allocation of resources required to deliver efficient, cost-effective, transparent, and data driven solutions to business challenges raising legal issues. They determine how best to utilize the constellation of internal and/or outsourced resources to achieve “more for less” while advancing client objectives and mitigating risk. All lawyers will—albeit on a less layered and complex basis—will do the same.
CLO’s oversee regulatory and compliance issues, provide risk and crisis management functions, and weigh in on a number of other critical facets of business operations and strategy. They are defenders, strategists, and collaborators. Translation: their multiple roles expand—and redefine—a lawyer functions in today’s legal delivery model. All lawyers will soon take on a more expanded role. While the number of tasks they perform is likely to shrink (legal research, document assimilation, and other repetitive tasks will be performed by machines or paraprofessionals under lawyer supervision) their core functions will multiply. For example, lawyers—like physicians—will interpret data, collaborate with others in the supply chain, and become more enmeshed in the IT and process aspects of legal delivery.
CLO’s work closely with a number of C-suite constituents including: CEO’s, CFO’s, and CIO’s as well as the Board, Regulatory and Compliance, HR, their own department, and outside providers. The CLO role intersects with other key enterprise stakeholders, and this is what enables Chief Legal Officers to provide effective legal and business input to the client. Translation: CLO’s are not just good lawyers and effective managers; they also know the business and occupy a unique role as its principal defender and business partner. The push-pull endemic to this dual role, ironically, demands they exercise a seminal legal skill: sound professional judgment. All lawyers will interact more regularly with other professionals, paraprofessionals, and machines. And, like CLO’s, they must evaluate client objectives, risk tolerance, and options to render effective assistance. Data analytics will help drive the decision making process as law—like medicine and other knowledge-based services—relies more on statistics and less on “gut.”
CLO’s are the bellwethers of the profession. They function at the intersection of law and business, technology, and process. “Legal problems” are now “business challenges” with a legal component. Legal delivery is comprised of legal, IT, and process management expertise and is delivered by interdisciplinary teams of which lawyers are a part. Lawyers’ ability to collaborate will be key to their role and success.
And while most lawyers will not experience the degree of complexity—and responsibility—that CLO’s face, they will function very differently than they did when law firms were the principal structures from their services were delivered. They will blend legal skills with technology and process competency and collaborate with other professionals, paraprofessionals, and machines. And like the trailblazing CLO’s who already function differently than lawyers have before, the rest of the profession will soon engage that way too.
This post was originally published on Forbes.com