Advising Your Clients on Initiating, Forming, and Managing Strategic Business Relationships

The classic in-house lawyer is portrayed in movies and on television as the school principal, enforcing the rules in a Draconian fashion. The stereotypical in-house lawyer was played by Peter MacNicol in the long-running TV show Chicago Hope; each time he was asked for his advice, regardless of the question, the answer was NO. In some companies, the common wisdom among sales teams is that the term “legal” be avoided as much as possible. The perception that the involvement of lawyers is “oppressive” can be attributed to the perception that legal departments are myopically demanding or seeking contractual commitments that are overreaching. Although some, corporate executive clients see their General Counsel as an enforcer charged with rigidly interpreting applicable laws and policies, many executives look to their General Counsel as the trusted advisor in a deal-making context.

Although seemingly at odds, many General Counsel play both the roles of enforcer and advisor simultaneously. Ultimately, in order to win a seat at the executive table as a General Counsel in today’s market, it is not enough to steer the corporate ship clear of storms; it is essential to be or become a key contributor to the success of corporate initiatives and bottom-line business drivers. This doesn’t mean move into sales (although most businesses are sales driven, so maybe not a terrible idea). Most General Counsel are not expected to generate sales and are probably not skilled or trained in the ins and outs of winning and retaining customers. Strategic partnering and deal making, versus direct sales, is one area where a confluence of legal experience, business acumen and market drivers can create an opportunity for a General Counsel to shine. Success in this arena can add value for the business and even have a halo effect on General Counsel who will subsequently be seen as making quantitative and qualitative contributions to the business. Both longevity in the top legal role and accession to other executive roles are dependent upon the perception of the General Counsel as a catalyst for growth, change or resurgence.

It is often critical and always valuable for the legal leader to provide both legal and business input. Corporate executives are typically open to input from a trusted advisor; legal experts who are successful in developing this kind of client relationship will be viewed as indispensable. The differentiator between a General Counsel and an outside counsel is having an advisor who not only understands legal principles, but also has deep and unique knowledge of the business and its leader’s personal style. In a law firm, the focus is very different and when joining a large corporation, a newly-appointed General Counsel from a major firm should be cognizant that the business model and attorney-client dynamic is very different in the corporate environment.

Obviously one of the most significant differences is that outside lawyers at firms are paid by the hour – the time spent evaluating and researching an issue is billable. The General Counsel and the in-house team are motivated to get to the best business outcome in the quickest, most efficient and cost-effective fashion. General Counsel is consistently required to balance risk and business needs and make judgment calls, whereas outside counsel may offer solutions that are motivated by a desire to increase work-flow or eliminate risk without regard to – or even knowledge of - countervailing business concerns. An example of this might be the law firm litigator who is recommending adversarial proceedings over settlement or arbitration. Litigation is incredibly expensive and what can be even more deleterious to a business, discovery can require substantial time from managers and executives who are vital to business operations and can ill afford to invest time in discovery activities including depositions.