General counsel transcend to CEO
Corporates are running by professionals. Chartered accountant, IT professionals, MBAs, Sales expert, General Counsel are the major professionals who remains at the helm of affairs for the various activities of a corporate house. It has been seen that while other professionals gradually climb the ladder and reach to the topmost position of an organization i.e. “CEO” whereas General Counsel are far behind to their fellow professionals in terms of reaching that level. This particular fact compels me to think time and again and some basic questions strikes:
1. Whether General Counsel lacks ambition and opportunity?
2. Why do other professionals outperform lawyers in the career stakes?
The purpose of this Article is to analysis the reason and what is the solution for this.
Firstly, Let us find out the reasons. For the sake of brevity, reasons can be kept in two buckets viz. perceptions & Lawyers’ inbuilt Mindset.
One of the perceptions about lawyers is that they are not good in financial numbers but at the same time it is also true that around 50% of CEO are from non finance background. The other perception issue with lawyer is that it is presumed that they are deal breaker due to inherent nature of being cautious and risk averse which many times can create road block for business. Further, many Lawyers are obsessed with details, most of the time, lawyer fail to see the business perspective. I have noticed personally that promoters think that lawyers lack the bold vision, marketing skills, and commercial sense and understanding of business which are essential skill to lead an Organization.
Many times, it has been seen that lawyers are also not ready to take higher or different roles. They are infatuated with legal issue and disinterested with other issues of business.
The Solution of this issue can be discussed on 2 basics. First is to deal with perception issue and second is to change the mind set by proper training of Lawyers during law school days so that they should be ready to take the baton.
Dealing with Perception issue:
As far as perception issues are concern, lawyer need to work hard to change this perception by becoming a pragmatic lawyer who takes a genuine interest in the business. He should become the solution provider while protecting the interest of the company. He must understand the business and its environment such as competition landscape,, technology etc. Participation in internal meeting is extremely important where he can demonstrate his skill & knowledge on various matters which may not be directly related with law. He should see issue with business eyes and not only with legal eyes.
An entrepreneur’s mindset is completely different from a lawyer’s mindset. Lawyers want to minimize risks without considering business implications, whereas entrepreneurs want to get things done and take risk with futuristic mindset. Continuity of business is important even if sometimes risk taking is required.
For being a leader being effective is paramount. Lawyers should have an appropriate influence on the overall activities of the business—someone whose advice is sought out and heeded. He should endeavor to become core member of the top management team and helps shape discussion and debate around business issues. He should not limited himself to legal issue. Further, lawyers’ overall job performance improves with increased financial acumen. He should be seen as business-savvy advisors on a range issues and strategies, and often simultaneously hold non-legal positions in their companies. The best-in-class general counsel is a fully functioning member of the senior leadership team who “just happens to be an attorney.”
Among in-house legal talent, lawyers who stand out can read balance sheets, understand profit and loss statements, possess at least a working knowledge of finance, and have good relationships with the finance team. They also possess team building and leadership skills, and collaborate well with leaders of other functions such as finance, human resources, information technology, research and development, marketing, and sales. These attributes shall help him to transcend to role of CEO.
For training perspective:
Due to technological advancement and other reasons, skills to perform the job are changing. Social scientists predict that the Fourth Industrial Revolution will have brought us advanced robotics and autonomous transport, artificial intelligence and machine learning, advanced materials, biotechnology and genomics. These developments will transform the way we live and the way we work. Certain jobs will disappear and new ones will be created that we likely cannot anticipate today.
Law schools, and lawyers need to ask themselves: - Are we preparing lawyers to be business leaders in today’s changing workforce?
In its January2016 report, the World Economic Forum identified the following top ten skills that will be necessary in the 2020 workforce:
(1) Complex problem solving
(2) Critical thinking
(4) People management
(5) Coordinating with others
(6) Emotional intelligence
(7) Judgment and decision making
(8) Service orientation
(10) Cognitive flexibility
Out of all these skills, emotional intelligence is anticipated to be the most important skills needed by all individuals and professions.
As per Psychologist and author Daniel Goleman who first coined the term “emotional intelligence” following five components are of Emotional intelligence
1. Self-Awareness:- the ability to recognize and understand your moods, emotions, and drives, as well as their effect on others
2. Self-Regulation: the ability to control or redirect disruptive impulses and moods—the propensity to suspend judgment and to think before acting
3. Motivation: a passion to work for reasons that go beyond money or status—the propensity to pursue goals with energy and persistence
4. Empathy: the ability to understand the emotional makeup of other people—the skill in treating people according to their emotional reactions
5. Social Skill: proficiency in managing relationships and building networks—the
ability to find common ground and build rapport
This research established the link between a company’s success and the emotional intelligence of its leaders. An individual can have first-class training, an incisive mind, and an endless supply of good ideas, but he or she will not be a great leader without emotional intelligence.
As per above discussion, it can be said that following necessary traits and characteristics are required for lawyer to become business leader:
(1) Passion and vision
(2) Creative thinking, analysis, and problem solving
(3) Desire to help others achieve success
(4) Resilience and self-motivation
(5) Emotional intelligence
(6) Communication, presentation, and persuasion
(7) Financial literacy
In my personal opinion, lawyers can be a great CEO. As per one report of HBR, company run by lawyer CEOs created particular value in high-growth businesses and organizations subject to large amounts of litigation Whereas companies run by lawyer CEOs in low-litigation industries under-performed by comparison to peers run by non-lawyers – perhaps because a lawyer’s innate caution negatively impacts on cash-flow and growth. Of course, the ideal CEO should be able to balance the ability to reduce litigation through prudent decision-making while also knowing when to take risks to enhance value.
It is clear that the future in-house counsel must be part of the business and a strategic advisor, with skill sets beyond just the law. Time for this change to be adopted in all law schools. Teaching only legal theory and legal skills is not going to help. Providing proper training to lawyer on above mentioned aspect is critical so that they can reach to CEO level in his/her professional journey.
All these effort will really help to transform and develop the role of General Counsel and he would be seen as a potential successor for the Chief Executive Officer.
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