Armed with an intimate knowledge of the inner workings of their company, in-house lawyers are well-placed to make valuable contributions to business strategy – so why are so few involved in key decisions? Pui-Guan Man finds out how GCs can become more influential in the boardroom

Growing regulatory risks for companies and an increasing focus on compliance have seen many general counsel rise up the company ranks in the years following the financial crisis. 

The role of the GC has evolved to include the prevention of problems as well as solving them once they arise – and GCs are gaining increasing visibility as a result. 

But many still feel there is a significant gap between the beneficial impact a GC can have and their current involvement in strategic decision making. And although some senior lawyers have succeeded in gaining more influence,the trend has not yet spread widely across the profession.

In turn, those seeking to bypass the gap face many challenges in demonstrating their potential as a business adviser. The perception of in-house legal functions by others in a non-lawyer environment means many GCs face an uphill battle over how best to become engaged and a key player in the business when their colleagues may not see beyond the legalese.

"More often than not, the times I have seen in-house lawyers involved in developing strategy are when a crisis has arisen and the organisation wants better protection against loss or liability," observes Intelsat assistant GC Robert Cummins. 

"Lawyers normally aren't seen as people who can show the way forward for a business – we are seen as reactive and retentive, rather than proactive or creative."

Sony executive vice president and GC Jonathan Pearl says: "On the whole, people take a long time to warm up to lawyers, particularly as lawyers don't have a natural place at the boardroom table. They are traditionally trained to be risk averse, which often doesn't help. 

"We tend to make our lives difficult for ourselves – we're used to writing long memos and using long words. Companies vary, but there would be perhaps 10 to 15 execs around the table that understand what you're talking about – beyond that most don't have a clue what you're on about, so it's important to engage those other circles by conveying brief and clear advice."

But while lawyers may be trained to react to rather than anticipate business opportunities, it is often forgotten that they frequently have an intimate knowledge of the inner workings of the business and are well-placed to get involved in key decisions.

"As a lawyer, we have a unique know-how that others on the board may not necessarily have. But the way to channel it is to talk financials – the language CEOs understand," comments Kellogg Europe chief counsel Orla Muldoon. "GCs need to understand the ins and outs of profit and loss and the business changes that can impact on them."

Cummins says: "I often hear the best way of getting under commercial people's skin is to act less like a lawyer. I do that myself, but I sometimes wonder if subterfuge is the best way to advance in a profession.

"In my view, the GC profession still has a long way to go in articulating the value it can add to a business. In-house lawyers are quite reticent about internally advertising their achievement, and defensive about the positions they take. 

"The question for me is how to achieve more positive impact and influence: I don't know if the answer is MBA-type training for GCs, or just old-fashioned elbow-grease and self-promotion.

"I'd say the best thing in-house lawyers can do is to give a business greater confidence in its dealings and to do that by exercising sound judgement. It's sometimes summed up as a consigliere role – if only one could find a role model that's not mafia-related!"

Nabarro partners Jonathan Warne and Peter Williamson, who recently compiled the firm's latest report on the subject of influence – The Influential GC – identified a set of general obstacles that GCs face in improving their influence. The firm is currently developing a training scheme to help in-house lawyers counter them. 

"Soft skills are frequently undervalued and there is not much support for GCs in this area," says Warne. "We have developed a coaching and mentoring scheme for GCs, as well as team facilitation, on how legal functions can create more impact in the business.

"In our report, GCs identified major challenges to influence including networking, communicating, selling the benefits of the team and gaining access to key decision makers. Overcoming these will help a GC build a personal brand and profile."

This issue of influence seems to be less of a problem in the US, where several high-profile GCs have senior leadership, including Fannie Mae CEO Tim Mayopoulos, who previously worked as GC of Bank of America, and Delta Airlines CEO and former Continental Airlines GC Richard Anderson. Undoubtedly, the more litigious environment in the US also engenders a greater reliance on legal functions.

Investec head of legal and compliance Richard Brearley says: "In a broad sense, the UK is some way behind the States, but it seems as if the model is heading in that direction. I think more in-house lawyers are seeing how certain GC careers are shaping up across the pond, which makes them realise what they can achieve. 

"I would say, however, it's mostly horses for courses as so much depends on the individual and the organisation they work for. The key to success is for a lawyer to be honest with their skills and to match them accordingly to the organisation and what it requires – some might want a business and commercial-focused GC, others someone to turn to for technical legal advice alone."

The importance of self-awareness, as well as awareness of what specific businesses require, was identified by many as a key factor in learning how to build key relationships and increase influence.

"It takes a while, and a lot of patience, to build credibility and to learn a company's risk profile, but building trust in relationships in the business is essential," says Pearl. "The ability to self-assess is crucial in understanding what skills need to be developed to reach a more senior position." 

It seems, then, that a variety of steps in changing the way a GC's contribution is perceived could pave the way for them to build and demonstrate their value, and therefore become strategically influential.

Muldoon notes: "Very few GCs hold CEO roles. But a GC is in a great position that reaches all of the functions across the business like no other role does – why shouldn't more become CEOs?"

Click here to view Legal Week's review of Nabarro's tools to help GCs identify influence