Knowledge

The Battle of the General Counsel: HQ vs. BU

 In large groups with several business units (BU), the relationship between the Group General Counsel and the General Counsel of the different BU is often a delicate one. Basically, the BU General Counsel are very happy on their own. They don't need - or at least don't perceive the need - of an extra layer of management and oversight above them. They are often very experienced lawyers, with a deep knowledge of the BU and good ties with the BU managers, and they are the undisputed boss of the BU legal team. They don't need a Group General Counsel above them. 

The situation is different for the Group General Counsel. The headquarters are the natural territory of the Group General Counsel. But that's only a small part of the legal affairs of the group. So, the Group General Counsel is facing a choice: either to limit himself (no male chauvinistic bias here, but for the sake of readability I will use "he" and "him" and "she" and "her" in my next blog on the same subject) to HQ matters, or trying to expand his reach into BU legal affairs.

A Group General Counsel limiting his attention to HQ matters may soon be out of touch with what goes on in the business, and that can make him gradually irrelevant. To avoid that uncomfortable situation, the Group General Counsel may then decide to expand his authority and oversight to BU legal matters and to the management of the legal departments in the BU. The soft version of this is reporting: the Group General Counsel will request the BU General Counsel to report on important legal risks, on headcount, on budgets,etc. But the Group General Counsel may also try to have a deeper grip into the BU legal affairs. That puts him in a potential conflict with the BU General Counsel. The latter may feel that their authority on their own legal department is being by-passed and undermined by the Group General Counsel. Explicit opposition is dangerous, but in practice the BU General Counsel have many ways to contain and undermine the initiatives of the Group General Counsel (saying "yes" and looking busy, but basically doing nothing or reacting slowly).

In this conflict of authority, the Group General Counsel, although formally in a position of authority, is not necessarily in a favorable position. The BU General Counsel have the formidable advantage of being close to where the real business happens and to have direct access to information. 

So, what are the options of the Group General Counsel? I see three: backing off into HQ; fighting to make his dominance over BU General Counsel prevail; and  entering into a collaborative relationship with the BU General Counsel. The latter two options can be combined.

Backing off into HQ is a failure. It transforms the Group General Counsel into a "courtisan" in a grey suit. Although none dares to ask, none knows precisely what the guy is doing and what is his contribution to the bottom line. 

Fighting to establish dominance is another option. The best way to do this is simply for the Group General Counsel to appoint his own lieutenants as BU General Counsel. If that is not possible, removing a few incumbents may be sufficient. The one with the power to appoint and remove BU General Counsel will be perceived and respected as the real boss. Sometimes it does not require to spill blood to establish dominance: the attributes of natural leadership are clarity of vision and purpose, decisiveness, intelligence, the courage to make choices and take responsibility for them, and cristal-clear communication.

The third option is collaboration. (It can easily come in combination with option 2). The key is to find out in what areas the Group General Counsel and the HQ legal department can be useful to the BU legal departments. The Group General Counsel can then unleash his energy in developing programs that have the genuine buy-in of the BU General Counsel because these programs are useful for the BU General Counsel. They help the BU General Counsel achieve their own objectives. An important question is "What can we do at Group level that cannot be done (as effectively) as BU level?". A few examples: organising lawyers' mobility across business units, setting up a "Legal Corporate University", benchmarking law firms' fees, sharing best practices. In practice, it helps to brainstorm with the Group General Counsel and the BU General Counsel to find out together the areas where coordination and synergies are necessary and desirable. The job of the Group General Counsel is then to make those things happen (brainstorming is not enough...).

At that point, the frustration for the Group General Counsel may be to discover that there is not much that truly needs or that would benefit from centralisation and coordination. Legal work is not like playing football, where playing as a team is intrinsic to the sport. Some Group General Counsel are very keen to seeing all lawyers working as a team (sharing information, setting up shared templates, forming working groups, speaking the same language, etc.), but that may be serving their need to justify their own existence (a team needs a coach, and if there is no team, why should there be a coach?) more than the objective needs of the business (on what matters and to what extent is cooperation among lawyers making their work more productive?). 

This is the real test to which any initiative by the Group General Counsel to extend his authority over BU General Counsel or his involvement in the management of the BU legal affairs should be submitted: are we just in a power game to achieve dominance for the sake of dominance, or does it make a positive difference for the shareholders? 

Antoine Henry de Frahan | 16 December 2009 |