When executives convene to strategize business plans and dream up big innovations, emotions run high and adrenaline surges. Yet, brilliant ideas can bring disaster if not tempered by the voice of a General Counsel. Cost-cutting measures can run afoul of federal regulations; business licenses can be overlooked; anti-trust laws can be violated.
Including a trusted legal partner brings a different perspective to the conversation. A General Counsel speaks with a voice that is passionate about the mission, yet tempered with reason and risk mitigation strategies. A sage to navigate the complicated intersection between ethics, profit and law.
There are many reasons companies hire a lawyer. Many involve bailing companies out of bad decisions. I offer five reasons that a General Counsel is an up-front strategic investment that companies cannot afford to overlook.
Trusted partner
A General Counsel is more than just a lawyer. She’s also an advisor and partner. A sounding board. A bridge between departments. A voice of reason and perspective. Working in the trenches with management and becoming part of the team, the General Counsel facilitates transactions more easily and at less expense than a typical outside counsel arrangement. Whether it’s diffusing sticky customer situations, speaking calm words of wisdom, or answering day-to-day routine questions, the General Counsel enables management to proceed more quickly and confidently with their business.
Risk mitigation
Business involves risk. Balancing that risk is critical. Understanding and analyzing legal risk allows well-informed, educated business decisions to be made. When the going gets rough and disputes seem inevitable, the General Counsel can act swiftly to protect company interests. When rules change or new issues arise, the General Counsel can quickly provide education and training. Under the steady hand of the General Counsel, business leaders can get back to doing what they do best – running the business.
Alignment between ethics, profit and law
Most corporate transgressions are the result of people who didn’t know what the right thing was, not people who intentionally made unethical or illegal decisions. The General Counsel steers executives to the right side of the law. Although many areas in business are gray, there is always a line that cannot be crossed. Crossing the line, sometimes even coming close to the line, can have disastrous effects for the business and potentially criminal implications for the executives. Knowing where the line is and how to navigate it becomes critical to success.
Business investment
The General Counsel relationship is more holistic than that of a typical outside law firm. Law firms are often engaged for discrete projects with little involvement in the ongoing business. While outside law firm expertise is often unparalleled, incorporating that expertise into the business strategy frequently requires the finesse of a General Counsel. Especially with extraordinary transactions, having a General Counsel provide oversight to the team of experts allows management to focus on running the business, not on running the transaction. This generally results in less distraction to the business and lower expert fees, positively affecting the outcome and bottom line.
Value Creation
Studies have shown that a well governed company is typically a more valuable company. Building internal controls and tending to corporate formalities can set your company apart. A company with strong internal controls enjoys swifter decision-making processes leading to faster execution of business strategy, smoother negotiation of contracts and better risk management. The General Counsel takes a leading role in ensuring good governance and implementation of best practices, thereby increasing corporate value.
The investment in a General Counsel can pay dividends in shrewder strategic decisions, cost avoidance, and enhanced risk management. Smaller companies may not need a full-time attorney with the corresponding price tag but may be well served to explore part time General Counsel options.