More and more, the GC is becoming a key, proactive player not just in legal matters – ensuring that the company operates legally and dealing out legal advice (personally or through staff and outside counsel) – but also, in strategic business decisions and issues involving risk management, finance, marketing, human resources, production, sales, and more.
The scope is broadening due to developments in three major arenas that have made multinational companies more complex: regulation, globalization, and technology. As if that weren’t enough, the responsibilities are expanding as budget tightening continues to squeeze resources.
For many GCs, the heightened complexity and volume of regulatory changes are the most formidable of the evolving general counsel challenges. Since the financial crisis that began in 2007, regulatory risk and compliance has grown in importance – including in the eyes of business leaders and board members, who have become more likely to be held accountable for compliance offences. Moreover, the GC must ensure that good governance gets practiced at all levels, including within the subsidiaries of a corporation and even third-party vendors.
Managing legal issues in an increasingly regulatory-impacted environment – which tends to raise the cost of doing business – becomes more complicated when those restrictions put cost pressures on the very legal department charged with making the business compliant and do its best to anticipate what might be around the corner.
The types of regulations affecting companies are changing along with the kinds of disputes. Cross-border, multi-jurisdictional legal matters are now as commonplace as they are complicated. Many GCs must understand the political and cultural environment within each country and jurisdiction wherein their companies operate – some of which can be alarmingly dynamic. Sophisticated systems and processes can cope with some of these risks. Still, much of the challenge is learning the different mentality, business practices, sensitivities, and perceptions at play alongside stringent foreign rules that might not always be clearly defined or consistently enforced.
The speed at which business operates continues to accelerate. Online global transactions, social media, and technological advancements have transformed the game. GCs must be ready to act and respond immediately, companies face more scrutiny than ever (24 hours a day), and competition can pop up overnight.
Then there is the matter of cyber security. It’s not just an IT issue. The GC should be part of the discussion about policies, education, vigilance, and how the company might deal with a cyber-attack. Furthermore, the legal impact of an actual data breach can be deep and wide, a communication plan deserving of careful legal consideration, and the legal steps for investigation and potential prosecution demanding.
In this environment, today’s successful GC must understand the business ramifications of legal actions (or inaction); be a trusted commercial advisor as well as a legal advisor; be a gatekeeper, but not a roadblock, who is pragmatic, adding value by preserving value; and help the company understand the value in mitigating and controlling risk – without being too risk averse. The GC must be adept at producing creative (yet legal) ways to achieve business goals and hold firm when there is no such thing.
Beyond that, what is the next round of general counsel challenges? Succession planning, mentoring, determining what resources are needed, and attracting talent – in other words, preparing for the future and whatever it may hold.
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