The revolution, brewing inside corporate legal departments for the past 30 years, has entered a critical new phase as general counsel face new and growing challenges even as their role takes on much greater importance.
Ben W. Heineman, Jr., a senior fellow at Harvard Law School’s Center on the Legal Profession and Program on Corporate Governance, knows that revolution well. “General counsel and corporate law departments in top global companies have become far more sophisticated, capable and influential, transforming both business and law in two important ways,” Heineman said, adding that transformation has occurred both inside and outside the corporation.
Heineman will speak on this new phase of the GC revolution at an event sponsored by Thomson Reuters and the Harvard Law School on April 12 in New York. The event coincides with the public launch of Heineman’s new book, The Inside Counsel Revolution: Resolving the Partner-Guardian Tension, to be published by the American Bar Association’s Ankerwycke Books in April.
The invitation-only event, entitled “The Inside Counsel Revolution — And What It Means for Business Leaders, General Counsel & Law Firms” will not only feature an address by Heineman, but also a panel discussion with several law practice group leaders, including Brad S. Karp, Chair of Paul, Weiss, Rifkind, Wharton & Garrison LLP; Gary G. Lynch, Vice Chair of Bank of America; Laureen E. Seeger, Executive Vice President and General Counsel for American Express Co.; and David B. Wilkins, the Lester Kissel Professor of Law and Faculty Director for the Center on the Legal Profession at Harvard Law School.
Heineman, who previously was Senior Vice President and General Counsel for General Electric from 1987 to 2003, knows well the inner workings of corporate legal departments. “The role of the General Counsel has changed tremendously in two ways,” Heineman explained. “First, the role of the General Counsel inside the corporation has significantly grown in importance, often replacing the senior partner in a law firm as the primary counselor for the CEO and board of directors.”
Now, GCs are a core member of top management, and are participating in decisions and actions not just about risks but also about opportunities, and not just about law but also about business, Heineman said, noting that GCs today often leads units beyond the legal department, like public affairs, taxes and environment groups. “The GC is now often seen as having importance and stature comparable to the Chief Financial Officer.”
Second, he said, the role of General Counsel outside the corporation has also significantly grown in importance with a related, dramatic shift in power toward in-house law departments and away from outside law firms. “Because corporate law departments are increasingly staffed by outstanding specialists and generalists, inside lawyers have taken on matters of day-to-day management and the firm’s strategic direction.” Most notably, GCs and inside lawyers have strongly reasserted control over how much money is spent on outside law firms, he added.
“These two important transformations of in-house legal departments are changing the way the role of the GC is looked at, both inside and outside the firm,” Heineman said. “That is the continuing revolution.”