The terms "general counsel" and "chief legal officer" are frequently used interchangeably, yet differences exist between these roles, particularly in their specific areas of focus. Depending on the size of your company, you may only have a GC, a CLO, or both.
While there is no universally accepted distinction between these 2 titles, in this article we’ll unveil some of the main differences.
Main Differences in Functions Between the GC and the CLO
General Counsel usually focus on legal and compliance affairs, ensuring adherence to applicable laws and regulations, while Chief Legal Officers typically shoulder a more extensive range of responsibilities, including legal, strategic, and executive functions.
The role of Chief Legal Officer (CLO) is a relatively new executive role created by companies addressing the challenges of growth and globalisation. A CLO assumes leadership over all aspects of legal affairs, from encompassing risk management and compliance to dispute resolution.
Key Responsibilities of the General Counsel
The key responsibilities of the General Counsel include offering legal advice and guidance across a broad range of legal issues, managing legal risks, and overseeing compliance. They generally report directly to the CEO and are integral members of the senior leadership team. Engaged in strategic decision-making, they play a pivotal role in shaping an organisation’s legal and business strategies.
Leading and Managing Legal Teams
General Counsels manage the legal compliance and corporate governance of the company. They handle court negotiations, convey legal advice to the executives and manage the legal team. They would have the entire legal team report to them and would be the one managing the day-to-day legal function. In this scenario, the General Counsel is answerable and reports to the Chief Legal Officer.
Regulatory Compliance and Risk Management
The General Counsel often works closely with other departments to ensure legal compliance and mitigate legal risks across the company. They may also advise senior leadership on legal matters such as potential mergers and acquisitions and protecting the company against risk and liability issues, ensuring the business operates smoothly even during times of uncertainty or crisis.
Contract Negotiation and Litigation Management
General Counsels oversee and participate in the negotiation, drafting, and review of contracts and agreements to protect the company’s interests. They manage legal disputes, including litigation and alternative dispute resolution processes to protect the company’s legal rights. In addition, they are responsible for safeguarding and managing their intellectual property assets, including trademarks, copyrights, and patents.
Key Responsibilities of the Chief Legal Officer
The Chief Legal Officer role extends beyond the responsibilities of a General Counsel, often including broader strategic and executive functions. Some companies designate a Chief Legal Officer (CLO) to emphasise the executive-level nature of the position and its involvement in managing and governing the company.
CLOs typically shoulder a more extensive range of responsibilities compared to the General Counsels, supervising areas such as regulatory compliance, government affairs, ethics, risk management, corporate governance, and occasionally, business development and corporate activities.
Strategic Planning for the Organisation
A Chief Legal Officer is not only a strategic thinker but also a senior executive operating at the most influential level within the company. The pandemic has made CLOs central figures in navigating an avalanche of unprecedented business challenges. They bring business judgement and proactive advice to the company, ensuring that they act with the highest ethical standards and maintaining excellent relationships with stakeholders.
Integrating Technology into the Daily Practice
The role of a Chief Legal Officer includes a big focus on technology, particularly in integrating it into the daily operations of the legal team to boost efficiency. One of the most valuable advantages a CLO can offer over a General Counsel lies in their capacity and vision to modernise the legal team through the strategic use of technology, including matter management, contract AI, and workflow tools, aiming for optimal business outcomes.
Nevertheless, this doesn’t come without its challenges, as it requires a shift in mindset and the upskilling of employees who may resist change and be hesitant to embrace new technologies.
Legal Advice to the CEO and Board
The Chief Legal Officer holds a position within the C-Suite, serving as a link between the business and legal teams. Having legal depth, a successful CLO will show business acumen and act as a strategic partner to the executive team, identifying issues before they become legal risks. Given the uniqueness of this role, each CLO’s approach and contributions will differ.
Does a Company Need Both CLO and GC?
Every company is unique, which means every legal department looks different. Not every business needs to have both a CLO and GC and, for smaller companies, having both positions may be unnecessary
Dealing with mergers and acquisitions, intellectual property and licensing and employment law compliance can be challenging. Without timely guidance from an experienced General Counsel familiar with the impact of these issues on your company, mistakes could happen resulting in financial losses or even pose a threat to the business’ existence.
The role of CLO has garnered significant attention in recent years, as companies recognise its pivotal role in effective corporate governance. They can also prove valuable for startups that have plans to grow and develop a culture. This strategic planning can be separated from the role of General Counsel so both positions can run more efficiently.
Experts in Finding Top Candidates for GCs and CLOs Roles
Understanding the different responsibilities associated with each role is crucial in making informed hiring decisions, leading your company in the right direction.
At Morgan Philips, our expert team have extensive and deep experience securing the best senior executives for your critical hires, spanning all industries, including Banking & Financial Services, Life Sciences, Management Consulting, Tech Startups, Private Equity and more.
Our head-hunters have a track record of successful placements to Chief Legal Officers and General Counsel positions nationwide. We’ve secured positions across the C-Suite, including CEOs, Chief Operating Officers, Chief Financial Officers, CMOs, Managing Directors, and other director-level leadership roles.
Learn more about our Specialist Recruitment services to see why Morgan Philips stands out as a top legal search firm in the UK and beyond. Alternatively, get in touch with our recruitment experts to find your next C-Suite candidate.