The Discrete Roles of General Counsel

Abstract

This essay focuses on the position of general counsel within a publicly-held business corporation when the general counsel is an employee-officer of the corporation charged with overall responsibility for how the corporation’s legal matters are handled. So situated, a general counsel’s roles include furnishing legal advice to the corporation’s board of directors, CEO, and other senior executives. But a contemporary general counsel often occupies other roles as well, each complex and additionally interlinked in many ways. These linkages may be beneficial to a corporation and society more generally. Nonetheless, general counsel’s position has often been characterized as ambiguous, a characterization that suggests that not all occupants of the position succeed in balancing its multiple roles in either a professionally or socially satisfactory manner. More generally, general counsel’s dependence on one client may call into question counsel’s capacity to bring an appropriate degree of professional detachment to bear. Indeed, some general counsel appear to have erred in a basic respect by misidentifying their client as individual members of the corporation’s senior management in contrast to the corporate organization, an error shared by members of senior management themselves.\nSeveral incidents over the past few years illustrate circumstances–including tensions among general counsel’s roles–that may undermine the effectiveness with which a general counsel fulfills the reasonable expectations engendered by undertaking such roles. Although the prospect of tensions among general counsel’s roles is not a newly-observed phenomenon, recent events heighten both their significance and the importance of resolving them carefully. By far the most visible events are criminal indictments, guilty pleas, and trials, as well as civil proceedings in which a general counsel is a defendant. While individual foibles may explain some incidents, that possibility does not foreclose the value of broader inquiry into a general counsel’s position.\nThe essay begins with a brief history of the evolution of general counsel’s position within large corporations. This history illustrates sharp fluctuations over time in the organizational power and professional status of general counsel and in the functions that general counsel has performed. Scholars using sophisticated social science methodologies have yet to investigate the situation and work of general counsel to the extent that social scientists have explored law firms and relationships between clients and external counsel. The essay nonetheless argues that implications for general counsel may stem from the more fully-developed body of social science inquiry into law firms and their partners. In particular, this body of work suggests that general counsel’s position has a paradoxical quality: a lawyer who serves as general counsel of a large corporation holds the clearly defined power associated with a hierarchical position in a large bureaucratic organization, while the position itself is ambiguous in many ways that may prove troubling.\nThe essay then specifies four roles typically occupied by general counsel as a prelude to examining tensions among them. These are: (1) legal adviser within the corporation to its constituents in an individual professional capacity; (2) officer of the corporation and member of the senior executive team; (3) administrator of the corporation’s internal (or “in-house”) legal department; and (4) agent of the corporation in dealings with third parties, including external (or “outside”) counsel retained by the corporation. Although earlier accounts of the position of general counsel tend not to single out these latter two roles as distinctive ones, the essay uses a selection of recent events to demonstrate their significance and their interrelationships with general counsel’s other roles.\nThe essay concludes by examining recent developments and prospects for further change that may reshape general counsel’s position. The relationships that underlie general counsel’s power are under stress from a variety of directions, suggesting that further evolution is inevitable.

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