What makes a ‘personally effective’ GC?

By Jerome Doraisamy|02 June 2020
Sydney

Only 8 per cent of general counsel hold corporate executive roles, and company performance is suffering as a result, says new research.

According to a Gartner poll, almost half (46 per cent) of GCs say that their ideal role is as a corporate executive, however only 8 per cent carry out this role. Instead, almost three in five (59 per cent) spend their time as “lead attorneys”, performing tactical work and providing legal guidance.

Many GCs are not meeting executive expectations as a result, Gartner surmised, even though the global coronavirus pandemic means that organisations and businesses need GC advice at the executive more than ever.

What is needed, Gartner argues, is for GCs to display “personal effectiveness”, which it describes as “the achievement of personal objectives, sufficient influence with CEOs and significant contribution to firm outcomes”.

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According to Gartner legal and compliance vice-president Abbott Martin: “Achieving these three components at least means you’ve done your job, have the ability to sway decisions when necessary, and help the company prosper. Unfortunately, only 1 in 5 GC [meets] this standard of effectiveness. This is concerning in an environment where many are looking to the GC for leadership.”

There are five behaviours, Gartner outlined, that separate “personally effective” GCs from their counterparts:

1. Carving out an executive role

“The most effective GCs spend 52 per cent more time on strategy and 42 per cent more time providing business guidance than their peers,” said Mr Martin.

“They achieve this by having intentional conversations with the CEO and the board about their highest value role and the corporate decisions that most benefit from GC involvement.”

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GC must do their best, he posited, to avoid becoming bogged down in the more tactical nature of day-to-day legal work and instead use the time to provide guidance to executives at the highest level.

2. Ensuring enterprise risk governance

One of the basic challenges facing companies, Mr Martin continued, is that accelerating business change and the increasing speed of risks make it hard for companies to effectively govern their exposures.

In short, he noted, new business models and technologies allow organisational scale and decision-making that does not map well to most companies’ regulatory and control environment, and it is less clear today which risks to take, who owns a particular risk, and if the company should manage it at the enterprise or local level.

“The most effective GCs address this challenge head-on by ensuring a consensus risk appetite, clarifying the corporate owners of risk and determining the level at which the risk should be addressed,” Mr Martin said.

“This is about proactively addressing the company’s risk exposures – whether legal or not.”

3. Scoping out client need rather than focusing on business partner satisfaction

GCs that prioritise pleasing business partners, Mr Martin explained, spend less of their time on corporate priorities, are less personally effective and as a result, have less effective executive relationships.

Whereas, he said, GCs that understand business partner challenges can increase personal effectiveness by 39 per cent and agreeing on client service plans can increase effectiveness by 21 per cent.

“The best GC ensures that their departments understand core strategic priorities of business partners and use that to pressure test legal support on projects and force partners to make resource trade-offs,” Mr Martin said.

“GCs must understand client goals without relinquishing control of the path to reach them.”

4. Owning ‘priority time’ cycle

Elsewhere, Mr Martin said that the average GC is spending between a quarter and a third of their time in ways they don’t need to. This takes many forms, he outlined, such as doing work someone else should have done, being in a meeting where their involvement was unnecessary, or where their planned schedule is interrupted for something unplanned.

“Personally effective GCs are ruthless about their time management and as a result have 27 fewer ‘wasted’ days a year,” said Mr Martin.

“Simple behaviours can make a dramatic difference in time management. For example, simply announcing your priorities reduces interruptions and empowers staff. GCs should also audit their schedules to make it [align] with their priorities.”

5. Investing for legal scale

Finally, Mr Martin said that legal productivity is stagnating, with 78 per cent percent of GCs feeling that legal speed had stayed the same or decreased in the past two years, while 81 per cent percent felt that legal cost as a percent of company revenue increased or stayed the same in that period.

“Personally effective GCs are nearly twice as likely to proactively request more resources for their department. Succeeding in this will create bandwidth to focus on giving effective executive guidance,” Gartner concluded.

What makes a ‘personally effective’ GC?
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