TerraLex recently published The General Counsel Excellence Report 2017, which tracks the continuing evolution of the role of corporate general counsel to encompass important nontraditional areas of focus and responsibilities. TerraLex, a referral network of more than 150 law firms (including Parker Poe) in more than 100 countries, sponsored similar surveys in 2013 and 2015.
The 31-page report makes for interesting reading. For example, it notes that even the GC’s title is changing, with 45 percent of respondents describing their role as “General Counsel” (slightly down from 2015) while more than 20 percent use titles like “Head of Legal,” “Group Head of Legal,” “Head of Legal & Regulatory Affairs” or even “General Counsel, Director of M&A, Strategy and Risk.” The report states that “[i]t is clear … that the exact role of the general counsel is becoming an increasingly difficult one to define.”
Also interesting is the general counsel’s perception of his or her role within the company. According to the report:
“General counsel thought it most important that they were a stakeholder in business decisions rather than just managing the legal department – just over 60 percent gave this answer the most important or next most important score compared with 45 percent who voted for managing the legal department. Being the conscience of the business was also a popular answer and this idea of the legal officer as moral guardian of the corporate entity is a theme which runs through the survey and the interviews.”
This leads to the report’s observations regarding the issues that general counsel find most concerning. Not surprisingly, “regulation and compliance” remain the front-runners and by an increasingly wide margin, rising from 60 percent to 70 percent from 2015 to 2017. This is entirely consistent with, and no doubt the result of, investor and regulator focus on the importance of effective compliance programs and risk management, as well as increasing recognition among boards of directors and senior executives that they bear substantive oversight responsibility for such matters. In other words, it has become widely recognized that compliance and risk management can no longer be relegated to out-of-sight silos within the company controlled solely by midlevel personnel. (See this article in Corporate Compliance Insights.)
Also not surprising is that the area of concern with the biggest percentage increase from 2015 to 2017 is “data security and cyber crime issues,” which soared from 31 percent to 62 percent. The report also indicates that risk management increased from 23 percent to 30 percent, reputation management rose from 20 percent to 32 percent, and “creating value for the company” went from 35 percent to 44 percent, no doubt reflecting the general counsel’s perception of his or her evolving role as a revenue producer, rather than just a cost center.
The report provides further evidence of trends that have been developing for a while. These trends are likely to continue, and maybe even accelerate, in the years to come.