What’s a general counsel and why’s the role so important at many law firms?

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The role of general counsel (GC) has become an increasingly popular appointment at top law firms, mirroring its rise among commercial companies. GCs are in-house lawyers at large companies tasked with overseeing legal issues and advice across their organisations. They’re the most senior lawyer in a company’s internal legal term. To become a GC, you must be a qualified lawyer with an array of legal and business experience. Some of the top skills required for the role include:

• sound commercial awareness;
• the ability to think strategically;
• the ability to negotiate effectively and draft contracts;
• technical legal expertise; and
• strong leadership skills.

GCs in non-legal companies

Traditionally, companies didn’t use GCs as their main source of high-end legal advice, as they preferred to seek external help from law firms while tasking their GCs with less prominent administrative roles. However, GCs have grown in stature over recent decades since taking off in the 1980s.In many cases, they’ve replaced outside counsel as the main legal advisers to their organisations’ boards, making the role of GC a key senior position in companies today.

GCs typically report to the company’s CEO or CFO, depending on the size of the business, with the rest of the in-house legal team reporting directly to them (eg, paralegals and legal counsel).

Big Four accountancy firm Deloitte explains that “as legal and compliance work increasingly attracts the interest of boards and investors, the GC is becoming a more central figure in commerce and industry”. 

As the legal landscape continues to evolve, so too will the role of a GC.

GCs in law firms

While, in the past, law firms were understandably slower to adopt the GC role – you can see why organisations full of lawyers might feel that they’re able to provide themselves with all the legal advice they need – this viewpoint started to change following Clifford Chance’s trailblazing hire of its GC, Chris Perrin, in 2003. Chris is now a partner at the magic circle firm.

Since then, several City law firms now have long-standing GC positions, including: 

• Allen & Overy LLP; 
• Ashurst LLP; 
• CMS; 
• DLA Piper UK LLP; 
• Freshfields Bruckhaus Deringer LLP; 
• Herbert Smith Freehills LLP; 
• Hogan Lovells; 
• Linklaters LLP;
• Norton Rose Fulbright; and 
• Simmons & Simmons LLP.

All firms are required to appoint a compliance officer to take responsibility for risk control, but having a GC in place isn’t compulsory. Many firms still have several people – often fee-earning partners – who cover the different aspects of a GC’s role, which include:

• risk oversight and ethics;
• ensuring that regulatory requirements are met;
• data protection;
• helping to resolve conflicts within the firm; and
• handling claims and complaints.

In contrast, employing a full-time GC to oversee those responsibilities, ensure that litigation is dealt with consistently and quickly respond to clients’ queries about risk and compliance frees up fee-earning partners to focus on billable work and winning new clients. Meanwhile, the firm’s management can concentrate on the firm’s wider commercial objectives and future direction.

GCs can reduce law firms’ costs – a factor that could play a key part in a firm’s decision to create a GC position. In recent years, there’s also been a growing appetite among firms to have a team of dedicated risk and conflict management lawyers reporting to the GC, removing all such responsibilities from fee earners and adding transparency to the way a firm operates. This could mean a whole new career niche for aspiring City lawyers, so be sure to look out for firms making these important hires in the legal press.