The changing role of general counsel

The changing role of general counsel 1 The changing role of general counsel Analysis · November 2015 Bech-Bruun Intelligence 2 The changing role of general counsel Contents Background 3 General results 4 Data 7 The analysis ”The changing role of general counsel” has been prepared by Bech-Bruun Central Business Reg. no. 25 08 99 44. All rights reserved. Quoting from this analysis is subject to due acknowledgment and must comply with the provisions laid down by the Danish Consolidated Act on Copyright. The changing role of general counsel 3 The changing role of general counsel General counsel face a growing number of challenges and demands and often find themselves involved in corporate strategic planning. It is a changing role requiring not only additional skills and expertise but also adaptability. In their own opinion, the general counsel feel confident and equipped for the new challenges, but they also seek more continuing professional development within non-legal areas to support and show the value they create. Close to 50% of the general counsel in Danish private enterprises and public organisations indicate that their participation in the management’s strategic discussions takes up more time now than two years ago. Hence, general counsel act increasingly as a trusted advisors to the management. And although the general counsel feel confident and consider themselves equipped for this responsibility, they still seek professional development to match their new role. We trust that this analysis will bring insights into the role of the general counsel, including the challenges and professional requirements the general counsel will face in the years to come. The analysis is based on the responses provided by 110 individuals who work as either chief legal counsel, head of legal or general counsel. If you have any questions to the analysis please contact: 3 Christian Ejvin Andersen COO, vice president T +45 72 27 34 34 E cea@bechbruun.com 4 The changing role of general counsel Legal advice and case handling are still the primary responsibilities As expected, one of the primary functions of general counsel in Danish private enterprises and public organisations is legal advice. 92% respond that legal advice and case handling are among their primary responsibilities. Moreover, 85% of the general counsel indicate that another primary responsibility is to render advice to management boards and boards of directors. Compliance is also an important element of a general counsel’s work day. 63% of the respondents state that issues involving compliance are one of their primary functions. It is also interesting that as much as 29% and 30% of the respondents state that project management and business development are among their primary responsibilities. The general counsel acting as a trusted advisor to the management 45% of the general counsel indicate that they are – to a high extent or a very high extent – involved in the strategic work of the management board and the board of directors. On top of that, 38% say that they are involved in strategic discussions to some extent. Close to 50% of the respondents state that their involvement in the strategic discussions is stronger now than it was two years ago. Among the general counsel involved in strategic discussions, 94% state that they act as a legal sounding board to the management. Risk assessment in connection with new business initiatives and identification of potential problems are also two significant issues on which the general counsel advise their managements, the first accounting for 67% of the general counsel and the latter 74%. General results * The respondents were allowed to tick off more than one option. Advisory services for management board/board of directors Legal advice and case handling Business development Management and resource allocation Compliance Risk and crisis management Project management Other What are your primary responsibilities? 0% 20% 40% 60% 80% 100% * The changing role of general counsel 5 As is the case with their primary responsibilities, surprisingly many of the general counsel act as a sounding board in areas conventionally not considered to be of an obvious legal nature. As it is, 32% of the general counsel act as a sounding board in business issues, and 28% of them take active part in drawing up business strategies. A value-adding department By far the majority of the general counsel (87%) experience that their legal departments are regarded as a valueadding and pro-active sounding board to the other members of the organisation. It is a great focus for the legal departments to create value for the organisation: 72% of the general counsel respond that creating value for the organisation is the primary challenge on which the division will intensify its focus for the next two years. Other focus areas of significance for the next two years are regulation and compliance (63%) and data protection and IT security (52%). New responsibilities require new skills Although the general counsel generally has no doubt of their divisions’ worth being duly recognised in the organisation, most of them still wish to improve their ability to raise the profile of their legal work. That is the statement given by 59% of the respondents. It is also quite obvious that the new responsibilities give rise to new demands for continuous professional development. The general counsel seek in particular to improve their skills within non-legal disciplines. * The respondents were allowed to tick off more than one option. What is your role in connection with strategic discussions? I act as a business sounding board to the management I act as a legal sounding board to the management I play an active and direct role in the strategy design I assess risks in connection with new business initiatives I identify potential problems I ensure efficient risk management, prepare contingency plans and assist in crisis management I uncover new business opportunities Not relevant/Other 0% 20% 40% 60% 80% 100% * 6 The changing role of general counsel Besides being better at raising the profile of their department’s value, general counsel particularly demand skills for determining strategic and business targets and KPIs, better communication of legal messages in a clear and simple manner and for linking legal issues with business issues. * The respondents were allowed to tick off more than one option. Would you like to improve your skills with a view to: Higher business understanding and knowledge of what adds value to the company Linking legal issues with business issues Better prioritisation of tasks and resources Raising the profile of the legal work Communicating legal messages more clearly and simply Determining strategic and business targets and KPIs Better risk and crisis management as well as crisis communication Better project management (e.g. in connection with extensive legal cases) Staff management 0% 20% 40% 60% 80% 100% Better financial and accounting control as well as financial understanding Preparation of strategies and business plans Not relevant/Other * The changing role of general counsel 7 Data 2. What is your job title? % Respondents Chief Legal Counsel/Head of Legal/General Counsel 100.00 110 Associate/Lawyer 0.00 0 Project Manager 0.00 0 Other 0.00 0 On 19 August 2015, Bech-Bruun issued an electronic questionnaire regarding general counsel to the recipients of Bech-Bruun Update. The recipients had the option of forwarding the questionnaire to other respondents in their organisations. On 25 August 2015, Bech-Bruun issued a reminder, and the survey was closed on 31 August 2015. Bech-Bruun received a total of 266 replies, of which 110 persons had the job title of chief legal counsel, head of legal or general counsel. Our survey has been based on these 110 respondents. 1. Are you employed in a legal function in a private enterprise, an organisation or a public enterprise? % Respondents Yes 100.00 110 No 0.00 0 3. How many years have you filled your position? % Respondents 0-1 year 16.36 18 2-4 years 32.74 36 5-7 years 17.27 19 8-10 years 16.36 18 +10 years 17.27 19 8 The changing role of general counsel 6. With what type of company are you employed? % Respondents Private 75.45 83 Public 19.10 21 Foundation-/family-owned 5.45 6 4. Do you have any managerial responsibilities? % Respondents Yes 69.09 76 No 10.00 11 Professional management without staff management 20.91 23 Not relevant/Other 0.00 0 5. How many people are employed in your department? % Respondents 1-4 persons 49.09 54 5-10 persons 29.09 32 11-20 persons 10.91 12 +20 persons 10.91 12 The changing role of general counsel 9 8. In which industry does your company operate? % Respondents Wholesale and retail 6.54 7 Manufacturing 13.08 14 Building and construction 3.74 4 Information and communication 0.00 0 IT, telecommunications and media 14.95 16 Banking and financing 21.50 23 Consultancy 4.67 5 Public administration 12.15 13 Health and social services 0.94 1 Energy and environment 4.67 5 Other 17.76 19 7. What is your company’s revenue? % Respondents DKK 0m - DKK 50m 2.33 2 DKK 50m - DKK 100m 1.16 1 DKK 100m - DKK 250m 5.81 5 DKK 250m - DKK 500m 9.30 8 DKK 500m - DKK 1bn 9.30 8 DKK 1bn - DKK 9bn 36.05 31 DKK 10+bn 27.91 24 Not relevant 8.14 7 10 The changing role of general counsel 10. To which extent are you involved in the strategic discussions of the management board and the board of directors? % Respondents To a very high extent 18.87 20 To a high extent 26.41 28 To some extent 37.74 40 To a low extent 11.32 12 To a very low extent 5.66 6 Not relevant 0.00 0 9. What are your primary responsibilities? (More than one tick allowed) % Respondents Advisory services for management board/board of directors 85.05 91 Legal advice and case handling 91.59 98 Business development 29.91 32 Management and resource allocation 53.27 57 Compliance 62.62 67 Risk and crisis management 57.01 61 Project management 28.97 31 Other (please specify) 9.35 10 The changing role of general counsel 11 12. Are you more involved in the strategic discussions than you were two ago? % Respondents Yes 45.28 48 No 41.51 44 Not relevant/Other 13.21 14 11. What is your role in connection with strategic discussions? (More than one tick allowed) % Respondents I act as a business sounding board to management 31.82 28 I act as a legal sounding board to management 94.32 83 I play an active and direct role in the strategy design 28.41 25 I assess risks in connection with new business initiatives 67.05 59 I identify potential problems 73.86 65 I ensure efficient risk management, prepare contingency plans and assist in crisis management 34.09 30 I uncover new business opportunities 6.82 6 Not relevant/Other 1.14 1 12 The changing role of general counsel 13. On which challenges will you and your division be concentrating your focus in the next two years? (More than one tick allowed) % Respondents Regulation and compliance 63.21 67 Anti-corruption and anti-bribery 21.70 23 Crisis management and protection of the organisation’s reputation 23.58 25 Data protection and IT security 51.89 55 Risk management 48.11 51 Controlling legal costs 39.62 42 Management 36.79 39 Creating value for the organisation 71.70 76 Reorganising the legal department with a view to optimising the service 36.79 39 Not relevant/Other 9.43 10 14. How are your and your department’s advisory services perceived in the organisation? (More than one tick allowed) % Respondents We are often perceived as a value-adding and pro-active sounding board 86.79 92 We are often perceived as an essential resource in the minimisation of risk 0.00 0 We are often perceived as an additional burden for the organisation 18.87 20 We are often perceived as sticklers for rules 0.00 0 My organisation rarely pays sufficient heed to legal advice 21.70 23 Not relevant/Other 5.66 6 The changing role of general counsel 13 16. Would you like to improve your skills with a view to: (More than one tick allowed) % Respondents Higher business understanding and knowledge of what adds value to the company 13.59 14 Linking legal issues with business issues 30.10 31 Better prioritisation of tasks and resources 21.36 22 Raising the profile of the legal work 59.22 61 Communicating legal messages more clearly and simply 32.04 33 Determining strategic and business targets and KPIs 37.86 39 Better risk and crisis management as well as crisis communication 20.39 21 Better project management (e.g. in connection with extensive legal tasks) 17.48 18 Staff management 23.30 24 Better financial and accounting control as well as financial understanding 28.16 29 Preparation of strategies and business plans 29.13 30 Not relevant/Other 1.94 2 15. Do you feel equipped to handle your job responsibilities? % Respondents To a very high extent 21.91 23 To a high extent 67.62 71 I nogen grad 9.52 10 To a low extent 0.95 1 To a very low extent 0.00 0 Not relevant/Other 0.00 0 The changing role of general counsel Copenhagen Denmark Aarhus Denmark Shanghai China T +45 72 27 00 00 www.bechbruun.com Bech-Bruun is a market-oriented law firm offering specialist services. With our wide range of products, we serve a large section of the Danish corporate sector, the Danish public sector as well as international enterprises. With the help of more than 500 talented employees and some of the most recognised and experienced experts in the business, we customise solutions to our clients, embracing all of our business areas. Our goal is to strengthen our clients’ businesses and help them outperform their competitors.