The Rise of the Law Firm GC
The legal profession has seen a huge amount of change in the decade since the Legal Services Act was given Royal Assent in 2007. The Act of course had an enormous impact on the fundamental structures of the profession and was also flanked by some extraordinary external factors. The pace of change continues to accelerate with ongoing consolidation, the rise of the boutique, Alternative Business Structures, the introduction of business consultancies to law firms, the use of AI and many law firms run like large PLCs to name just a few examples.
With change, of course, comes opportunity. What it means to be a lawyer in the 21st century has altered, and viable new career paths have emerged.
When the Act came in to force in October 2011 it became mandatory for every firm to have a Compliance Office for the Legal Practice, or COLP. I would like to examine what the introduction of this role has meant for the career paths of senior private practice and in-house lawyers.
An abiding trend of the last twenty years has been the evolving role of the in-house lawyer. The in-house legal community has grown consistently and with it the power and influence of General Counsel and their departments. The 2007 Act made this a trend for law firms as well as their clients; quite simply law firms began to establish their own in-house legal departments.
Many of the larger firms already had a General Counsel in place, often a senior lawyer appointed to focus on issues such as conflicts, claims against the firm, major procurement and commercial arrangements and insurance. Many of those GCs happily took on the COLP role and continued to adapt to the new regulatory regime and challenges facing the profession.
Some firms however had no existing in-house legal function, or one which was not fully equipped to handle the new requirements, risks and demands being placed on all firms. A number of firms decided to recruit externally and I have been instructed on some of these searches. It has been noticeable over the last ten years that the barrier between private practice and in-house has become increasingly porous and the role of law firm General Counsel is certainly one where the two sides of the profession meet. Many more firms have recognised how valuable experience gained in-house can be on the fee-earning side and the value of that experience is also being recognised in the law firm General Counsel.
Often the rationale for appointing a General Counsel externally was to introduce someone with no history with the firm who could bring independence and objectivity at a time of change, when firms were becoming large international businesses operating in a complex trading and regulatory environment. Increasingly run on corporate lines, many firms needed their own independent legal function with an experienced leader. However, many in-house lawyers were initially bemused, if not dismayed, by the idea of being General Counsel to a business almost entirely comprised of other lawyers. Equally, firms were more comfortable with appointing someone who really knew how partnerships and professional services worked. As a result most applicants came from other firms or businesses in professional services sectors such as insurance or accountancy.
Five years on and the role of law firm General Counsel has evolved significantly. It now has genuine appeal to lawyers from a range of backgrounds. Firms are more sophisticated in their management and strategy, and can often offer a significant role in a senior management team akin to a company C-Suite. The issues facing law firms are more challenging and more aligned with those facing companies in commerce & industry and other sectors. Add to the list corporate structure and ABS, mergers and acquisitions, data protection, cyber security, risk and compliance, external capital, international expansion (or contraction) and playing a part in the firm’s strategy and suddenly being a “lawyer to the lawyers” has some added spice. And again, many firms will now actively seek the skills and ideas gained from working in other sectors.
When working on these searches I have found that firms, of course, remain interested in people with existing law firm experience, but candidates from other sectors are being called for interview in greater numbers and are successful in the process because firms actively seek a breadth of legal and business experience. The common themes are good all round commercial skills, leadership and management and a sophisticated understanding of risk and compliance in a regulated sector. In truth a profile for a General Counsel role in a major law firm now closely resembles that of a role in a major corporate with leadership, decisiveness, gravitas and outstanding people skills very much to the fore, as you would expect.
So what do you need to think about if your ambition is to be a GC, whether of a law firm or any other organisation? You, of course, need excellent technical legal skills and knowledge, often be very specific to a sector, as well as broad commercial skills. However, organisations looking to make an appointment at this level will often take your expertise as read and other factors will make you stand out against tough competition. Personal attributes such as leadership, management and people skills are essential and you should be able to demonstrate how you have applied them to practical and commercial benefit. Seize every opportunity to build on a variety of people and “soft skills”. Build internal relationships with key people, grab opportunities to lead teams and projects, to deputise for senior colleagues and build credibility with senior management and the board. If you are looking to move in to a new sector or organisation then seek out the key technical skills you will need. For a law firm regulatory and risk management experience are important, so volunteer to lead compliance programmes or to chair the risk management committee – it will stand you in good stead. The role of the General Counsel is to be a trusted advisor to the business and that is how you should aim to be seen.
If you would like to discuss the changing nature of roles within the profession and the range of options now available within both private practice and in-house, please do get in touch with me or my colleague Sarah Coughtrie at Cayley Coughtrie.