December 13, 2015

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The Pied Piper Of Hamelin - Is He The General Counsel

- Debolina Partap, Vice President Legal and General Counsel [ Wockhardt Group ]

debolina partap

The General Counsel is now a core member of the top management team, and offers advice not just on law and related matters but also helps shape discussion and debate around business issues; according to the Harvard Business Review...

If a promise is betrayed under a contract, what does a general counsel do? Well, he leaves no stone unturned for business to get back justice which would mean that he is willing to play the legal pipe to drive away all breaching stakeholders and bring back normalcy. So the entities get clean of “rats”. If we think of this, then he resembles the Pied Piper but only unlike him, does not take away the innocent children. Or does he? Let us see in this article how the general counsel often becomes the infamous Piper just for his company.

Let us begin with the butter on toast. General Counsel today brings more to the table than just their legal expertise. Acting increasingly as legal and business advisors to the senior leadership team, general counsel draws upon broader business knowledge and a wider skill set. Having the legal pedigree - deep knowledge of law and regulations, negotiating skills, and specialisations such as litigation management, he becomes the centre point in the environment of business strife. Differentiation comes from being, in the words of one general counsel, “more than just a lawyer.” High-performing general counsel develop reputation as business-savvy advisors on a range issues and strategies, and often simultaneously hold non-legal positions in their companies. The best-inclass general counsel is a fully functioning member of the senior leadership team who “just happens to be an attorney.”Given the benefit of greater business and industry knowledge and financial acumen for legal executives, when recruiting general counsel, CEOs and boards should look for candidates who possess these traits. For those who aspire to become general counsel, intentionally seeking out development assignments to build their business and financial knowledge and skills will be essential and also may open doors to general management positions. Standing out from the legal crowd. With broader knowledge and skills, general counsel participates in leadership discussions of complex problems and creative solutions. Often, a best-inclass general counsel contributes as much around strategy and driving the business as do other senior leaders, such as the chief financial officer or chief marketing officer. As Harvard Business Review observed, “The general counsel is now a core member of the top management team and offers advice not just on law and related matters but helps shape discussion and debate around business issues.”Among inhouse 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.

Thus, it can be seen that General Counsel must have the magic of a pipe to play and drive away rats i.e., the business headaches.

On the flipside, General Counsels never take off their legal hats. Their thinking, however, should be broader than purely legal matters to consider the longer-term impact of a transaction, litigation, or other corporate matter. In fact, there are times when general counsel thinks more about the impact on the business over time than a short-term legal strategy. For example, when the senior leadership team makes a decision, general counsel can help project and analyse the likely outcomes, including the long-term impact on business strategy and shareholder value. If they display broader thinking, general counsel can dispel the perception that having a law degree means they are only interested in legal issues. Instead, legal talent is recognised for being business-minded. The Pied Piper like the General Counsel wore many hats- a musician, a master strategist, a great convincer, a friend, an enemy (both on interchangeable basis) and gave something different which made a difference in solving the ultimate problem. Like the General Counsel, it can be a mischief element too for wrong doers.

In this time of mounting regulation and enforcement activity, the in-house bar faces the unending task of identifying and addressing its risks and its compliance needs. The biggest challenges for the GC today is on anti-corruption issues, handling fraud, compliance and risk management. In this context, certain parameters become very important to the GC. The Piper also came to deliver justice and in return wanted justice but when not given could use his trump card to let the village know the negative side. Similarly, General Counsels’ advice is expected to be attended to by business and if not many a time, the consequence is a disaster just like the lore of Pied Piper.

We now bring you some interesting excerpts from a survey verbatim.

FrahanBlondé General Counsel Survey 2009 Excerpts The Following

“Cynics will say that in-house counsels are just taking advantage of the crisis and the intensified competition between law firms to increase their bargaining power. While the crisis has certainly pushed in-house counsel to negotiate discounts and alternative pricing schemes more firmly than they were used to before, this is only part of the explanation why in-house counsel are moving up the ladder.

The driver behind this trend is the status of the primal fuel in-house counsel manage: legal risks. For companies, legal risks have developed, over the last decade, from operational risks to strategic risks. Astronomic competition fines, brand destroying litigation, regulations and directives closing down product lines, patent wars, shareholder rebellion, penal and criminal prosecution… For the first time in economic history, legal risks have become a permanent and fundamental threat to shareholder value and to the careers of executives and directors.

The janitor of legal risks, the legal department, suddenly became the guardian of one of the company’s strategic interests. It enjoyed increased attention from CEO and Board with all the benefits this entailed: higher budgets, better remuneration, higher caliber people, direct reporting lines. Downstream, law firms had a ball: rates soared, leverage escalated, profits per partner reached all-time highs.

But, as ancient tragedies abundantly demonstrate, operating close to the Sun-God does not only bring pleasure. It also brings bigger challenges, more competition, greater expectations and a tougher business environment. With the changing status of legal risks, the responsibilities of the legal department grew more important and the role of the General Counsel changed quite profoundly.

FrahanBlondé General Counsel Survey 2009 clearly showed that General Counsel’s key priorities are not about solving legal problems, but about pursuing strategic, organizational, and managerial goals. One of the most important and complex challenges for General Counsel is to find the right balance between being a guardian of the corporation and a business facilitator. Another one is to define the role of the General Counsel in emerging business trends such as compliance, CSR, risk management, the Code of Conduct, diversity etc. In 2008, crisis struck the financial markets and, a few months later, the rest of the economic fabric. Financial pressure hit the legal budgets and, consequently, law firms’ profits. But, again, the situation is not the same as in earlier crisis: legal departments, while suffering budget cuts as any department in the company, resist, across the board, remarkably well. The attitude of legal departments toward law firms is even more striking: not only do they put pressure on fees, but for the first time, they dare to question law firms’ business models. Change is in the air.”

Thus our community is not “the Good Cop” community. Our being maverick lies in the underlying meanness of the Pied Piper. While on one hand we are conscience keepers of huge businesses but also on the existentiality of the advices being sidelined, the business suffers huge profits. Though we don’t actually want this or actually blow the pipe, but the symbolic ignorance of legal advices by business may lead to exit of good rewarded profits. So ‘the rats go as well as the children’. Is it the right thing to say that the Pied Piper could have been a general counsel? Point to Ponder!!!

Disclaimer – The views in this Article are her own and based on research and not that of Wockhardt Group.

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