updated on 05 June 2018
The role of general counsel (GC) has become an increasingly popular appointment at top law firms, belatedly mirroring its rise among commercial companies. GCs are in-house lawyers at large companies tasked with overseeing legal issues and advice across their organisations.
Traditionally, companies did not 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 and, in many cases, have replaced outside counsel as the main legal advisers to their organisations’ boards, making the role of GC a key and highly senior position in companies today.
Law firms have been understandably slower to adopt the GC role – you can see why organisations full of lawyers might feel that they are able to provide themselves with all the legal advice they need! However, this viewpoint has started changing over the last 10 years and following Clifford Chance’s trailblazing hire of its GC, Chris Perrin in 2003, several City firms have since created GC positions, including Allen & Overy, Ashurst, CMS, DLA Piper, Freshfields Bruckhaus Deringer, Herbert Smith Freehills, Hogan Lovells, Linklaters, Olswang, Norton Rose Fulbright and Simmons & Simmons.
All firms are required to appoint a compliance officer to take responsibility for risk control, but having a GC in place is not compulsory. Many firms still have several people – often fee-earning partners – covering 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 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 firms’ costs, which is the essential explanation for the rise of the role. It is clear why some UK-based firms are adopting a structure that many of their US counterparts have been using for some time. There is also a growing appetite among firms – see Clifford Chance – for having 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.