He or she is the Company`s legal advisor, business partner, regulatory compliance officer and head of legal operations. The ability to capture this second category of expenses quickly and accurately is the first sign of a sound legal expense management strategy. Conversely, its absence will be your biggest obstacle to sophisticated financial planning. The Standard Counsel`s View: The General Counsel should always report directly to the CEO, and that General Counsel should automatically have the managing authority over Legal`s personnel, operations, and budget. (Notwithstanding the fact that law schools do not teach management and, more importantly, the fact that the vast majority of general counsel have no work experience outside of law firms and in-house solicitor roles, and have never led a function or business unit.) Recently, a member of the board of directors of a West Coast media company asked me this question: Our CEO wants to reduce the number of his 13 direct employees, including the general counsel. What do you think about the fact that the General Counsel reports to the Chief Operating Officer? The legal department is a cost center and therefore the general counsel will work hard to get the right budget to ensure the proper execution of the mandates and tasks of the legal department. The General Counsel is responsible for ensuring that the Company complies with applicable laws, the Company ensures that it implements internal practices and policies to remain in compliance with the law, and directs the legal department and its operations. A question that often arises when conducting legal research is whether the new head of an organization`s legal function should assume the title of General Counsel or Chief Legal Officer. Similarly, the other related question we sometimes receive is whether a company should have both a General Counsel (OCO) and a General Counsel (GC). The answer tends to be a solid “No, but…” The structure of the legal department is crucial to the success of the team and the quality of services provided to the company. I practiced law for over 2 decades and spent over 12 years as Managing Director of Departments at Whirlpool Financial and then as an M&A executive at GE. Excellent legal judgment on the one hand and effective management on the other are skills rarely found in the same person.
For the former, you need competent legal advisors. For the latter, confirmed executives. And bureaucratic maxims such as “the general counsel should always be accountable to the CEO” miss the point. The Deputy General Counsel acts as both supervisor and counsel to the legal team, leading the teams, conducting research, analysis, drafting and litigation. An assistant general counsel is more common in larger companies. Not only does the General Counsel have a duty to provide legal advice to the Company and its stakeholders, but he or she must also direct the legal operations of the Company. The General Counsel represents the Company in transactions with third parties and is the lead negotiator for strategic transactions. The AoM works closely with senior management, the Board of Directors, clients and stakeholders, and the legal department. While you can focus on managing and advising on legal decisions, you can also do legal work such as drafting and litigation if you work for a small organization. If your team ends most months by inserting subtotals of invoices into an Excel spreadsheet, you`re certainly not doing your CFO any favors. That`s why, over the past decade, legal departments have turned to more specialized legal fee management software that automates basic expense tracking. Manage legal department costs, budget, hiring, firing, retention of external consultants, coordination of legal department issues with other departments, etc.
Many companies today talk about a general counsel who confers a C-suite leadership title on the head of the legal department, emphasizing the importance of this role in the company. In terms of managing the people, operations, and budget that make up the business function, this requires a steady hand from a proven manager who is accountable and led by another proven manager. Not a lawyer whose entire career has been limited to legal advice. And not a CEO whose scale is insufficient for a strong hierarchical relationship. Suppliers who can contain costs and deliver work within the agreed budget are especially valuable in the world of corporate legal services. In fact, your CFO may even prioritize predictability over just cost reduction. The majority of general counsel and general counsel in large organizations are reluctant or even reluctant to report to anyone other than the CEO. Second, an OCOL and GC can be a way for a company to find an external successor to the head of the legal function. For example, let`s say a company has 10 lawyers and the current GC is in its early sixties and has announced that it is only a year or two away from retirement.
The company may decide that hiring an Assistant General Counsel does not attract the talent it needs for a position that will almost certainly be a GC position in less than 24 months. But the current GC doesn`t want to leave right away, and none of the other lawyers is even willing to take the helm. As a result, the company conducts an external search for the GC successor, gives that person the GC designation, but reports to the former GC/now Chief Legal Officer for only 12-24 months. In this scenario, despite the fact that it is unpleasant, everyone is satisfied, and the arrangement succeeds for a limited time. Most companies will take the position – and we agree – that an OCOL and a GC within the same department are confusing for internal and external stakeholders. It is not known who “actually runs the show” and where the proverbial responsibility ends. An Advocate General reporting to a Chief Legal Officer will generally not feel like a true General Counsel and is unlikely to accept such a partnership unless succession is contemplated within a defined time frame. The title “general counsel” generally refers to the person who runs the legal department and works with counsel, not someone who has a hierarchical relationship with the person who actually manages things. If someone who is a GC but reports to an OCOL enters the external market, their application tends not to be viewed as positively as a “stand-alone” General Counsel.
The Manager or Director of Legal Operations manages the operations of the department. The main objective is to manage departmental costs while improving processes. While the Assistant Legal Counsel analyzes, drafts and advises legal decisions, Legal Services organizes the day-to-day activities of the department. Billing policy compliance rate Legal billing policies articulate what you value as a service. It lets suppliers know exactly what you`re doing and doesn`t take into account valid billable expenses. So if you want to maximize value, it makes sense to start with the metric that reflects how your suppliers understand their definition. For even more accurate forecasts, you can also use a substance comparison report to go beyond provisions and forecasts of longer-term results.