The role of general counsel for companies in the technology sector has evolved over the years, with in-house lawyers expected to serve not only as counsellors on legal matters but also as C-suite executives, board advisers and business partners, integral to the business and growth of the company.

With changing metrics for success, reporting and duties of care, the tech GC/chief legal officer now faces heightened expectations and increased challenges both externally and internally.

Based on a panel discussion with Jennifer Pileggi, SVP, general counsel & secretary of Zuora, and Baker Botts attorneys and former general counsels, Cynthia J. Cole and Tai Hsia, in July 2018 in San Francisco, this article examines the evolving role of general counsel.

It discusses practical considerations involving technology, collaboration and mentoring; and how attorneys in these roles can successfully adjust their priorities, approaches, and strategies in order to meet greater expectations of and obligations to companies, executives and shareholders.

How Is Success Measured In-House?

The most successful in-house attorneys share one common trait: they are viewed as trusted business partners rather than simply in-house lawyers. Now more than ever, they play a far more complex role than their predecessors did just a decade ago.

GCs now have greater responsibility involving issues that are not strictly legal, including risk management and business strategy. CEOs expect GCs to be able to see around corners, anticipate and mitigate or eliminate risks before they arise or become material.

Rather than being perceived as speed bumps to business goals, GCs are expected to build trust with internal clients and business leaders, proactively identify business needs and facilitate and accelerate business and product roadmaps. These expanded duties require that GCs understand the business and company strategy deeply, juggle multiple roles within the organization and maintain a more executive presence in the day-to-day business.

These broadened business duties may be familiar to MBAs, but the skills needed are not necessarily taught in law school or emphasized at law firms. General Counsel who excel in these wider capacities credit several approaches with helping them maximize their impact in an organization.

GC as Jack of All Trades AND Problem Solver

Today's GC must act in a dual capacity. This expanded in-house counsel role now both complicates and protects internal and external relationships.

A savvy GC must be well-versed in both legal and business issues; he or she needs to comprehend their organization's business drivers and operations, as well as be able to identify risks. While attorneys at firms quickly learn how to recognize legal issues, a successful GC works in tandem with the organization's business advisers to identify what is an acceptable level of risk.

In-house counsel is expected to be knowledgeable across a wide range of subject matters. GCs at smaller companies are expected to give advice on everything from compliance to contracts to human resources to intellectual property to real estate. Thus, they must frequently learn and understand areas of law outside of their core areas of expertise.

Most importantly perhaps, in-house counsel must be comfortable with situations in which there is substantial ambiguity and where business considerations must be weighed against legal and other risks. Business leaders make decisions without perfect information and GCs are no different.

GCs are expected to take a proactive approach to regulatory, economic and other changes in the industry; not only staying current but also predicting possible challenges down the road is required. And reliance on outside counsel may not be possible, depending on budgets.

This expanded role can often muddy the GC's duty of confidentiality, which is owed to the client, not members of management. There are notable exceptions, such as if the GC becomes aware that the client is engaged in wrongdoing or will engage in wrongdoing. However, there are varying definitions of “wrongdoing,” across jurisdictions, so the ethical path forward for the GC may not always be immediately clear.

Technology Savvy

In today's high-pressure and increasingly complex corporate climate, a GC must thoroughly and deeply understand the company's businesses and technologies, which can sometimes be challenging to grasp for lawyers who have been trained in other areas.

The GC has a duty to ask questions of management and the board and he or she must continue to challenge the answers and keep probing as the technology changes and evolves.

Unlike practicing at a law firm, a GC at a technology company must fully comprehend the company's products and processes in order to collaborate and work effectively with all sectors of the business in furtherance of the corporation's business goals.

Hsia illustrated this point by giving the example of when he was COO and GC of MOCAP Analytics, “During my commutes from San Francisco to Menlo Park, I watched countless MIT 6.034 Artificial Intelligence lecture videos on MIT OpenCourseWare in the mornings and discussed AI concepts, problems and real-world applications with a data scientist co-worker on the way back to San Francisco in the evenings.”

Hsia said that this allowed him to better understand the key drivers for MOCAP's business, including, “what to focus on when negotiating deals and how to best protect proprietary data and other assets created by the company.”

Beyond understanding what the technology does and how it works, the GC must also keep up with broader innovations in technology and regulations in order understand the effects going forward on his/her business and to advise on best practices which will keep the company in compliance with new and pending or likely upcoming regulations.

Teamwork and Collaboration

For today's technology-focused GC, teamwork and collaboration are critical due to everyone's increased responsibilities and shorter time frames for problem solving and rolling out product launches. In-house lawyers are expected to work in cross-functional teams and they need to be able to cooperate across departments.

Instead of providing legal counsel only, a successful GC will be seen as a team member who communicates department-wide and advises on issues beyond the purely legal.

In order to exert influence within a company, a GC must also display a clear understanding of how the entire business works. In addition, it is critical for the GC to gain the respect and trust of business leaders across departments to be effective.

Showing Leadership in Times of Transitions and Crisis

In times of corporate crisis, in-house attorneys are frequently on the front lines. The reputation of GCs may rise or fall depending on their reactions to situations like whistleblowers or other employee or shareholders issues.

A GC's exemplary performance during challenging times can help him or her gain influence within an organization quickly because it offers the opportunity to effectively demonstrate one's value as a trusted adviser to the board and management.

Cole spoke about when she was asked to step in as interim CEO after the unexpected death of Tony Stelliga, CEO of Spectra7 Microsystems, and said that the first decision she made, within minutes of learning of Stelliga's passing and accepting her new role, was to overrule the decision to issue an immediate press release before notifying the employees.

As Spectra7 is a publicly traded company (TSX), the decision was ultimately made to suspend trading before the press release, which was published at the exact same time that Cole led a global internal conference call announcing the news.

Cole recounted how she told the board and outside counsel, “The employees must know at the same time as the public, not after. This is too important. You asked me to lead and I will do it. My first decision is to respect the cohesion of the Spectra7 team so that we all move forward together.”

She advised the audience, “Be bold. Don't be afraid to step in and to lead.”

To prepare for such potential crises, today's GC must design proactive risk management strategies that focus on the health of “human capital” and corporate culture. They must consistently test and evaluate the effectiveness of reporting and investigation processes to ensure that everything works before the crisis hits.

Specifically, in the tech world now, there is intense and growing stakeholder interest in #MeToo and diversity issues, which is expected to grow in the foreseeable future. GCs must remain educated on these concerns and be constantly vigilant in formulating and testing processes which address these possible minefields.

Other major areas where a GC's role becomes integral include corporate changes like an IPO or the sale of the company. Management may need guidance on incentive compensation plans and buyouts. In the case of stock sales or spin-offs, the GC's role is critical because outside counsel do not know the underlying business of the company as well as the in-house counsel, including critical drivers and hidden areas of risks.

For the GC in the midst of a merger, he or she jointly represents both the company and the selling stockholders, but then the attorney-client representation passes to the new owners of a business along with the fiduciary duty.

There are also many challenges specific to growing a company and legal team when focused on or headed to an IPO. For example, Sarbanes Oxley now entails a new set of rules on “Up the Ladder Reporting,” as well as new and enhanced compliance duties for the legal team.

“It's critical that the GC (in partnership with the CFO) be able to lead this process proactively and provide guidance to all internal stakeholders,” Pileggi advised the audience. “This means managing outside counsel closely to ensure they provide adequate notice of upcoming requirements and key dates, as well as an overall project plan for the process. In addition, for late stage pre-IPO companies setting up their first compliance programs, the GC needs to set the ethical tone for the company and make sure the Board and the rest of senior management understands that the program must be part of the company's core values, rather than a 'check-the-box' exercise.”

GCs Benefit From Career Advancement Assistance

Mentoring is frequently referenced by attorneys in both corporations and law firms as an important resource which can help with career advancement and the particular day-to-day demands of the GC role.

Although some law firms and larger, more established companies may offer formal mentoring programs, many lawyers feel that informal mentoring can help their career just as well.

While the onus is still on lawyers to steer the course of their professional development, employers are now viewed as at least partly responsible for making sure they give their in-house attorneys the resources that they need to grow.

Sponsors may be directly involved with the advancement of their attorney-protégés and work at the same organizations. They advocate and use their connections to advance their protégés through their backing and assistance.

Executive coaches can be helpful for lawyers needing assistance with a particular skill set or with a problem area that has been identified during evaluations or feedback. Sometimes organizations will also provide coaching to lawyers who show potential and need fast-tracking to become fully ready for their next promotion.

Both Pileggi and Cole talked about they came to find mentors and sponsors later in their careers and so take a broad view of what mentoring entails. “I didn't really have a mentor until I'd been practicing for almost 15 years,” said Pileggi. “That experience has made me want to help other attorneys not experience the same situation and I try to play a mentoring role for my team members as well as other newer attorneys outside the company.”

“Unfortunately, I lost an invaluable example of leadership and mentoring when Tony Stelliga passed in 2016, and I felt that loss personally,” said Cole, “so reaching out to mentor and model is vital to me. I make a point to make myself available for even the smallest “touches” with younger lawyers, who seek my advice or who I think need some encouragement.”

Making an Impact Outside of Work

The increased responsibilities and pressures on GC can result in high stress, ill health, and fast burnout. Corporations seeking to retain talented in-house counsel often turn to philanthropic efforts, wellness initiatives and flexible work programs in order to keep their employees, including their lawyers, productive and happy.

Many attorneys find that involvement with nonprofits and hobbies outside of work helps them recharge, reduce stress and find their passions, which in turn, helps them gain perspective. These activities, when sponsored in-house, can also build teamwork and collaboration. Moreover, studies have found that those who engaged in a creative post-work hobby were more likely to be better problem-solvers at their job.

Many GCs turn to speaking and presenting; writing; partnering with organizations and joining non-profit boards as outlets that are ancillary to development of practice of law and are also great for networking.

Conclusion

Regardless of seniority, a GC should model appropriate behavior to be seen as a true leader. Cole used the example of when she saw World Cup hero Brandy Chastain speak to a group of young girls at a local soccer camp, “Leading is not about being on the A team. You lead from the bench. You lead from the locker room. You lead where ever you are.”

By balancing a corporation's many diverse business and legal needs with a collaborative attitude and an ongoing willingness to learn, it is possible for GC to find professional and personal success in the rapidly evolving and challenging world of a technology company.

Jennifer Pileggi is the SVP, GC & corporate secretary of Zuora Inc. As Zuora's first GC, she leads the global legal function and is responsible for worldwide legal, regulatory and compliance matters. She began her legal career in private practice with Heller Ehrmann and Marron, Reed & Sheehy, and has been a general counsel for more than 20 years.

Cynthia J. Cole, Special Counsel in Baker Botts' corporate practice, has more than 17 years of experience representing global companies and private equity funds in complex strategic business transactions. Cole has been GC for early-stage and advanced technology companies and, as such, has implemented all backbone commercial and terms of service agreements.

Tai Hsia is a Special Counsel in Baker Botts' corporate practice. Hsia focuses his practice on venture capital and private equity investments, joint ventures, mergers and acquisitions, corporate and securities matters, and representing technology startups and later-stage emerging growth companies.