The company's finances are in freefall. A scandal's broken. The CEO's had a heart attack.

There are a lot of reasons companies face unexpected executive changes, sometimes overnight. And in the days and months that follow, the decisions general counsel and chief legal officers make can change the direction of their company and on a more personal level, their career.

“I would expect a CLO that finds themselves in that position to stay calm and work with the board and the rest of the executive team to understand the process they're going through,” said Ken Avery, a partner at Deloitte Financial Advisory Services. “Try to let them focus on running the company and the business and be that calm voice of reason that can help the company work through that crisis while not losing track of the fact you've got a business to run.” 

And just because legal leaders can't know when a crisis will hit doesn't mean they shouldn't have a plan in place in case one does, Avery says. He notes that a lot of the most important work a GC can do to ease shock transitions should happen before a crisis even occurs.

“That's where the GC can really play an important role for the company, if the GC and the company have been forward-thinking and already have a crisis management playbook put together,” Avery said. “A lot of time, the GC is responsible for using that playbook, and that gives other C-suite executives the opportunity to run the business. Because even though you have this activity going on, you have this underlying business and you don't want this to derail the company.”

He said many of the companies he's worked with on the West Coast, where he's based, have plans in place of varying specificity. Some have set aside PR teams and lists of contacts for sharing news on crises, as well as go-to legal firms in case of a company emergency. Even these rough outlines can smooth out transition periods post-CEO and save the company work, especially in the first 24 hours after leadership leaves.

Other companies also have an outline of executives' interim or permanent successors. These succession plans can ease the move between CEOs.

But the work's not finished when a new CEO arrives, regardless of how fast they fill the spot. Avery says it's a good idea for in-house leaders like the CLO to be very involved in bringing a new CEO up to speed on the company, and to establish a relationship with the new chief executive.

“[GCs] should be, as quickly as possible, getting to know the new CEO and potentially other colleagues, getting highly aligned with the new vision and figuring out how they can actively and visibly contribute to this new vision,” said Jason Winmill, managing partner at legal consulting company Argopoint.

He notes that it is possible new CEOs could want a completely fresh perspective and could clean house, especially if the company has fallen on hard financial times or experienced scandal.

“Context matters, and why the CEO is transitioning needs to be factored in to the GC's strategy,” he said. “If there's a serious performance issue at the company—financial, operational, reputational—then the CEO and everyone who reports to the CEO should be cognizant that their role at the company is at risk, and it's probably time to be more open to opportunities outside the company.” 

Luckily, he notes, GCs and CLOs have strong networks and valuable, versatile skill sets, and can reach out to in-house recruiters to learn about open positions. If a GC does choose to leave a company after other executives leave—or if the choice is made for them—Winmill says the most successful ones are “quick to put any challenges with the previous company in the rear-view mirror” and find a new position. It's tempting to take time off, he says, but it's generally not the best career move. 

Avery says he's usually seen GCs and CLOs wait until the company has finished its tumultuous transition period and has a capable, filled-in set of executives running the business.

“It's generally in the best interest of the company for the GC to stick around through the transition. That is going to help for the new executives and executives coming in,” he said. “And then they can evaluate after that whether they are going to be able to work with new leadership or whether it's time to move on to new opportunity.”

For some GCs, the interim period between new and old chief executives has provided an opportunity to take a turn at being CEO. While Avery and Winmill both say they've rarely seen GCs step into the CEO role at a time of crisis, it has happened.

When Spectra7 Microsystems Inc. CEO Tony Stelliga suffered a heart attack and died in May 2016, the company's GC, Cynthia Cole, become co-interim CEO. Cole, now at Baker Botts, said the fast transition allowed her to develop new skills and put those she had learned as a lawyer to good use.

As GC, a role she kept during her time as CEO, she said she'd taken the time to understand not just the legal aspect of her company, but also the financials. She also had experience leading a team, motivating people and executing strategies, key factors in CEO success. But that's not to say there were no difficulties.

“I think, in order to lead a company, there has to be a lot of belief in yourself and in what you're doing and that you're on the right path. There's not a lot of room for doubt,” Cole said. “Sometimes that's difficult because as a lawyer you're trained to look at all the risks and mitigate the risk, be careful, and as a CEO I would say that's pretty contrary. You see the risk and say, 'No, we're going to go forward.'”

Cole says her time as CEO informs her current practice at Baker Botts. After working in-house and spending four months as CEO of a tech company, she can put herself in the position of the clients she works with.

So does Cole have advice for other GCs who find themselves without a CEO?

“Be bold and don't be afraid to step in where you see the gap,” she said. “Don't be afraid to make decisions, and to lead.”