All aboard - war stories from the select band of GCs to have taken exec roles
"This is a people business. You must be able to do people; if what you like is doing intensive deals and deadlines, stay in private practice" - Caroline Hill speaks to a select band of GCs who have made the step up
February 09, 2012 at 07:03 PM
6 minute read
Leading companies are still slow to give their lawyers management roles. Caroline Hill speaks to a select band of GCs who have made the step
The number of lawyers taking the step up from partner or general counsel to a board-level management role is undoubtedly small – by one recent estimate there are a total of 14 lawyers acting in any capacity on the boards of the FTSE 100.
Former Linklaters partner and group general counsel Rupert Pearce became one of the few examples of a GC stepping up to a management position when he was appointed as chief executive officer (CEO) of satellite operator Inmarsat in July last year.
Pearce joined Inmarsat, which has a market capitalisation of around £2bn, as GC in 2005 from a non-legal role as head of corporate finance at venture capital outfit Atlas Venture. Six months later, he led Inmarsat's initial public offering, projecting the company into the FTSE 100 and providing an exit for private equity houses Apax Partners and Permira.
His rise to the top can be credited not only to his own ability and ambition but also to Inmarsat's culture and openness to new ideas. As GC, Pearce sat on the management board – one of the attractions of the job was, he says, being involved in the strategic decision-making and the management of the business.
With the company "rewarding hard work and talent", he ultimately became head of strategy and business development. The role, being so closely aligned with the "futurology" and "trajectory" of the company, placed him perfectly in line for the CEO role, and the GC job that he had initially taken in order to help him become a better venture capitalist took an unexpected twist.
"It's not just about the capability of the individual GC but the broader circumstances surrounding the organisation," Pearce says. "The question is whether the organisation is able to see people as having skills that can be leveraged or whether they tag them as a lawyer and put them in a box."
Judging by the overall number of lawyers making the transition, most organisations still choose to put their GCs in a box. According to former Simmons & Simmons senior partner Bill Knight, who has long promoted the cause of lawyers on FTSE boards, chairmen stereotypically see lawyers as advisers, not principals, with one chief executive notably commenting: "I don't put my dentist on the board: why would I put my lawyer on one?"
However, Pearce points out that with market conditions such as they are, companies should be utilising all the skillsets of their people, regardless of whether they fall under the right label.
Furthermore, following Lord Davies' report from 2011 into female representation on the boards of the FTSE 350, there is some expectation that attitudes will change more broadly as companies are forced to look to new pools of talent to comply with the guidelines.
Another GC to have taken up a CEO role last summer is ex-Ashurst debt finance partner Richard Kendall, who in June took on the role at small fixed-income boutique Glendevon King Asset Management (GKAM). Kendall joined GKAM in February 2010 as general counsel after responding to an advertisement in The Times, and it was not long before GKAM founder and chairman Alastair King – himself a former Baker & McKenzie lawyer – decided Kendall should set up a formal board with Kendall in the CEO role alongside King and senior fund manager Peter Baum.
Kendall points out that lawyers generally have an ability to absorb and process huge quantities of information – a vital attribute now he has over-arching responsibility for the company's relationships with key investors; monitoring fund raising; taking care of the strategic direction of the company, including third-party relationships and expansion into new business; as well as all legal and compliance issues. There are many parallel skills that lawyers may draw on in a management role, he says, including coming from a strong service culture; however, pure deal-doers need not apply.
"This is a people business," Kendall says. "You must be able to do people; if what you like is doing intensive deals and deadlines, stay in private practice."
Furthermore, in an era of increasing specialisation, Kendall warns that lawyers need to be able to "look up and out". For all their transferable skills, it is this degree of specialisation that means many lawyers are lacking vital experience and corporate exposure looked for by company boards. Ruth Markland, managing partner of Freshfields Bruckhaus Deringer's Asia practice between 1996 and 2003 and now chairman of national age charity WRVS and a non-executive director of Standard Chartered, believes this means lawyers on boards are likely to stay in the minority.
"At firms like Freshfields the complexity of the legal service that is being delivered requires a number of people to be really quite specialised and that, at the end of the day, is the reason they are partners in the law firm," she says.
In contrast, Markland puts her own success in the boardroom down to her broad management experience, raising the firm's profile (and, in turn, her own) while at Freshfields, including with a role as vice chairman of the British Chamber of Commerce in Hong Kong and a broad corporate experience and client base.
Markland also stresses that, at a time when the notion of a cradle-to-grave career has largely been consigned to history, lawyers would do well to raise their own profile and put in place contingency plans for a second career.
At in-house executive search firm Pelham Reid, former Imperial Tobacco general counsel Charles Hamshaw-Thomas adds: "There is a strong desire to return to days of old when it was usual to see lawyers taking up non-executive appointments in business and other organisations. This desire is driven by a combination of factors – business need and senior career management and planning, business development and wider diversity and corporate/social responsibility objectives."
In a culture where GCs are still judged on their technical knowledge rather than business decisions, it remains to be seen whether lawyers will find or make time for these extra-curricular activities. But there is a growing sense in the market that for those looking for a management opportunity, they will find it.
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