In today’s complex business environment, the role of general counsel has become increasingly important. As both a legal advisor and business strategist, general counsel provides critical guidance to help companies navigate regulatory requirements, litigation, and other legal risks. This essential function has led many companies to elevate the general counsel position into the C-suite.
The Evolving Role of General Counsel
Historically, the general counsel was viewed primarily as the head of a company’s legal department. The role involved overseeing corporate legal affairs, drafting contracts, and managing outside counsel. While these traditional legal responsibilities remain, the scope of the general counsel role has expanded significantly.
Today’s general counsel not only serves as the chief legal officer but also plays a pivotal role in business strategy and risk management. As a C-suite member, the GC provides guidance on the legal implications of business initiatives and helps assess potential risks and liabilities. Some of the key responsibilities of modern general counsel include:
- Advising the CEO and board of directors on legal and regulatory issues
- Overseeing compliance with laws and regulations
- Leading corporate governance reforms
- Guiding responses to government investigations
- Developing and implementing compliance training programs
- Mitigating legal exposure and risk
By providing proactive legal counsel, the general counsel helps ensure the company avoids fines, lawsuits, and other legal pitfalls.
Reasons General Counsel is Often Elevated to the C-Suite
Given the broadened purview of today’s general counsel, many companies have determined that the GC merits an executive seat at the table. There are several key factors driving the migration of the top legal job into the C-suite:
Increased Regulatory Complexity
Stringent regulations and oversight in areas like data privacy, financial reporting, and consumer protection have made legal and compliance expertise absolutely essential at the executive level. General counsel plays a vital role in monitoring regulatory change and ensuring adherence.
Rising Compliance Costs
Non-compliance can lead to devastating fines and penalties. The potential cost of compliance failures is astronomical. Having GC oversight helps avoid missteps that could harm reputation and the bottom line.
Litigation Risks
General counsel is central to crafting litigation strategy, resolving disputes, and avoiding potentially costly lawsuits. This expertise in managing legal exposures is key for risk mitigation.
Reputational Concerns
Corporate scandals and misconduct can seriously damage a company’s reputation. Legal oversight helps safeguard reputation by promoting ethics and adherence to the law.
Investor Expectations
Institutional investors and shareholders now expect major companies to have robust legal compliance programs led by experienced general counsel.
By elevating general counsel to executive leadership, companies aim to better manage heightened legal and regulatory risks in today’s marketplace.
Typical Reporting Structure for General Counsel
Most general counsel at major corporations have a direct reporting line to the chief executive officer. Having access to the CEO ensures legal considerations are woven into key business decisions and initiatives from the outset. Common GC reporting lines include:
| Company Size | Typical Reporting Structure |
|---|---|
| Large public companies | Reports to CEO |
| Mid-size public companies | Reports to CEO or COO |
| Early stage startups | Reports to CEO or CFO |
| Private companies | Reports to president/owner |
While formal reporting structures vary, the consensus is that GC should have unfettered access to top leadership to fulfill their role as a strategic C-suite partner.
Comparing General Counsel to Other C-Suite Roles
As general counsel takes on C-suite status, it inevitably raises questions about how the role compares to other top-level executive positions. There are certainly parallels and overlap.
General Counsel vs. Chief Financial Officer
Like CFOs, GCs play an important governance role focused on risk management and compliance. Both positions aim to ensure the company follows regulations and minimizes exposures. The CFO focuses primarily on financial and audit risks, while GC oversees legal risks.
General Counsel vs. Chief Risk Officer
The chief risk officer job centers on identifying and mitigating all company risks, including hazards like cyberthreats, supply chain disruptions, and more. General counsel has a narrower focus on legal, regulatory and litigation risks.
General Counsel vs. Chief Operating Officer
COOs concentrate on business operations, overseeing areas like sales, marketing, HR, and infrastructure. General counsel is less involved in day-to-day business functions but provides legal guidance across all departments.
In practice, the exact responsibilities tend to vary based on the company structure and needs. But most C-suite members work collaboratively to balance business objectives with risk management.
Key Attributes of Effective General Counsel
Not all legal expertise translates into effective general counsel leadership. In addition to legal acumen, some key attributes and abilities include:
- Business savvy – GCs must understand their company’s business model, objectives, and challenges.
- Communication skills – Explaining legal risks and advice to non-lawyers is crucial.
- Judgment – Navigating ambiguity and recognizing material issues are critical skills.
- Adaptability – The role requires flexibly handling diverse responsibilities.
- Influence – GCs must persuade others to embrace recommendations.
- Strategic thinking – Proactively managing risk and seizing opportunities differentiates great GCs.
A strong general counsel not only resolves specific legal questions but also helps shape corporate strategy and culture. Many companies now aim to hire GCs who can serve this multifaceted, executive-level role.
General Counsel Compensation
Compensation packages for general counsel reflect the position’s growing status and responsibilities. According to a 2022 study by BarkerGilmore, average GC compensation includes:
- Base salary: $381,000
- Cash bonus: $185,000
- Equity awards: $320,000
- Total CTC: $886,000
Salaries vary significantly based on company size, industry, experience, and location. But GC pay is rising, especially among top performers in larger corporations. Competitive compensation helps attract and retain the legal talent needed in the C-suite.
Career Path to General Counsel
Very few lawyers advance directly from law school to general counsel. More common steps along the career path include:
- Practicing for 6-10 years as an attorney specializing in areas like mergers and acquisitions, regulatory law, IP, etc.
- Taking on senior legal roles managing groups of other lawyers
- Gaining experience across different legal practice areas
- Working closely with business executives and learning commercial awareness
- Proving ability to communicate legal risks compellingly
- Developing expertise within a specific industry
- Being promoted to VP, Chief Legal Officer, or Deputy GC roles
- Finally making the leap to General Counsel
This career progression allows lawyers to build the well-rounded capabilities now expected in the C-suite. Aspiring GCs must demonstrate business acumen and leadership in addition to legal skills.
Outlook for General Counsel Role
The general counsel role is almost certain to grow even more influential given trends like:
- Globalization creating more jurisdictional complexity
- Technology issues like cybersecurity and AI requiring new legal mastery
- ESG concerns highlighting the need for ethical oversight
- Class action lawsuits and activist investors threatening brands
Navigating these challenges will demand even more from future general counsel. Companies will likely continue elevating GC to the inner circle of executive leadership.
For attorneys aspiring to corporate leadership roles, pursuing opportunities that broaden business knowledge is key. The path to C-suite general counsel jobs requires showcasing both legal expertise and strategic savvy.
Conclusion
The data clearly shows general counsel is increasingly a C-suite caliber role at major corporations. As legal and regulatory environments grow more complex, companies need GCs equipped to provide both tactical advice and big-picture guidance. Effective modern general counsel not only manage risk, but also help shape business strategy and culture. With sizable compensation packages now averaging near $900,000, general counsel has firmly established itself among the top executive team.
