Deep Dive

Chief Legal Officer vs. General Counsel: Distinctions and Responsibilities

September 15, 2023
Streamline AI

When it comes to in-house legal roles, the titles of Chief Legal Officer (CLO) and General Counsel (GC) often appear interchangeably in various organizations, but they can be distinct roles with varying responsibilities. The CLO is a newer title, while GC is a traditional and widely used title. The growing prevalence of the CLO title suggests a shift in the scope of the legal department’s top lawyer to focus on business solutions in addition to legal analysis. According to the 2023 Association of Corporate Counsel 2023 Chief Legal Officers Survey (the “CLO Survey”), the percentage of top lawyers for their company with the title “Chief Legal Officer” increased from 21% to 25%, while the title General Counsel for such top lawyers declined by 4%.  

Chief Legal Officer Overview

The CLO role is a C-suite role that expands upon the GC role. It’s a multi-dimensional role that manages the alignment of legal and business strategies. A CLO’s day often requires balancing immediate, tactical decisions and long-term strategic planning. The CLO will partner with the C-Suite on solving business problems while mitigating risk and ensuring legal efficiency. According to the CLO survey, 81% of CLOs in the US report to the CEO. CLOs spend 36% of their time contributing to business strategy and advising executives (13% on strategy development, 12% on board matters and governance issues, and 11% on advising executives on non-legal issues) while spending just 27% of their time providing legal advice. 

While many types of companies can employ a CLO, it’s generally more common in larger, multinational corporations with diversified operations across various sectors. These companies typically face a complex web of regulatory and legal requirements which demands a specialized focus.

Chief Legal Officer Responsibilities

The responsibilities of a CLO may include:

  • Advising Senior Leadership and the Board. Serving as the primary legal advisor to the CEO, board of directors, and other senior management. This involves interpreting laws, rulings, and regulations for them.
  • Legal Oversight and Risk Management. Ensuring that all company operations are conducted within the confines of the law. This might involve monitoring legal changes that affect the company or the business’s industry and reviewing contracts to ensure compliance with new regulations. This also includes identifying potential legal risks and working with other departments to devise strategies to mitigate them.
  • Team Leadership. Leading the legal department, which may include attorneys, compliance, privacy, ethics, and government affairs professionals, and paralegals. This involves internal and external legal team hiring, ensuring ongoing professional development, and resource management.  
  • Stakeholder Communication. Keeping the board and other stakeholders informed about relevant legal matters, including potential risks and litigation.
  • Regulatory Liaising. Engaging with external regulatory bodies and government agencies, ensuring the company is abreast of the latest rules and policies, and maintaining good relations.
  • Strategic Planning. Collaborating with business leaders to integrate legal considerations into the company’s broader strategic planning.
  • Litigation Management. Managing ongoing litigation, if any, or overseeing outside counsel representing the company in legal proceedings.
  • Environmental, Social, and Governance (ESG) and Corporate Social Responsibility (CSR). According to the CLO Survey, 23% of CLOs oversee ESG and CSR.
  • Continuous Learning. Keeping updated on changes in laws, regulations, and industry best practices that may affect the company, and ensuring the organization adapts accordingly.
  • Budget Management. Overseeing the legal department’s budget, ensuring cost-effective solutions, and potentially negotiating with outside legal firms regarding fees or retainers.

General Counsel Overview

Think of the GC as the go-to legal expert for daily operations. While their role may sound similar to that of a CLO, the GC tends to have a more hands-on approach to specific legal matters. They are deeply involved in drafting and negotiating contracts, ensuring compliance on a day-to-day basis, and might lead a team of other lawyers and paralegals in the legal department. Their expertise might be more specialized than a CLO, having spent years in a particular industry or area of law that aligns with the company’s primary operations.

Regardless of size, any company that deals with legal matters may have a GC. From startups to established enterprises, the presence of a GC can provide invaluable legal insights and protection.

General Counsel Responsibilities

The responsibilities of a GC may include:

  • Representing the Company in Court. A fundamental responsibility of the GC is to act as the face of the company in legal settings. Whether it’s a civil suit, regulatory hearing, or any other judicial proceeding, the GC stands front and center, safeguarding the company’s interests.
  • Advising Leadership. Serving as a legal advisor to the company executives and leadership, including interpreting laws, rulings, and regulations, and advising on strategy and risks.
  • Team leadership. Leading a team of attorneys, paralegals, and other legal professionals. This involves mentoring, delegating tasks, ensuring professional development, and maintaining a cohesive team that efficiently meets the company’s legal needs.
  • Regulatory compliance. Companies must often navigate a maze of regulations and compliance requirements set by various government bodies. The GC is at the helm of these interactions, ensuring the company remains in good standing.
  • Contract Management. The GC oversees the drafting, review, and negotiation of contracts the company enters into, whether with customers, vendors, or partners. This ensures that the company’s interests are protected, and risks are minimized.
  • Intellectual Property Protection. Protecting a company’s intellectual property, including patents, trademarks, copyrights, and trade secrets, is another key responsibility of the GC. They work closely with specialists to ensure the company’s innovations and branding are legally secured.
  • Ethics and Integrity Oversight. Ensuring that the company adheres to ethical standards is a cornerstone of a GC’s role. They provide guidance on ethical considerations, develop company-wide ethical policies, and create training programs to promote a culture of integrity.
  • Crisis Management. In times of corporate crises, such as public relations issues, product recalls, or significant litigation, the GC plays a pivotal role in managing the situation. They advise the leadership on legal implications and potential crisis strategies.
  • Stakeholder Communication. The GC often communicates with various stakeholders, including board members, shareholders, and the public. This includes providing updates on major legal events, regulatory changes, and any potential risks or opportunities.
  • Merger & Acquisition (M&A) Activity. If the company is involved in mergers, acquisitions, or divestitures, the GC will be instrumental in guiding the deal structure, due diligence, regulatory approvals, and integration or divestment processes.
  • Continuous Learning. The legal landscape is continuously evolving. As such, the GC is responsible for ensuring that they and their team stay updated on the latest legal developments, rulings, and trends relevant to the industry and the regions where the company operates.

Why Would a Company Need Both a CLO and a GC?

You might be wondering: if there’s overlap between the two roles, why would a company need both? The answer often lies in the complexity of the organization. Massive corporations operating in various sectors and countries might need a CLO to develop a holistic legal strategy while relying on a GC to handle daily legal intricacies. By splitting these roles, companies can ensure a laser-focused approach to both macro and micro legal concerns.

In some organizations, especially those with larger legal departments comprising at least 30 or more attorneys, the CEO may opt for both a CLO and a GC role. The CLO typically collaborates closely with the board, CEO, and other executive team members, such as the CFO and COO. Their primary focus revolves around managing these crucial relationships and addressing overarching issues like corporate strategy, organizational growth, and shaping the company’s culture. On the other hand, the GC oversees the entire legal team, managing day-to-day legal operations. In such a setup, the GC reports directly to the CLO.

While similar in many aspects, the CLO and GC serve distinct functions. While a CLO typically has a bird’s-eye view strategy, the GC addresses day-to-day legal challenges. Understanding these distinctions can ensure that companies staff their legal departments effectively, securing their operations and future growth.

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