In recent years, in-house legal departments have seen a significant transformation. Among these changes is the rise of the Vice President (VP) of Legal role. Once seen primarily in larger corporations, this position has become more common in mid-sized companies seeking to strengthen their in-house legal capabilities.
What are the Differences Between a General Counsel and a VP of Legal?
The role of in-house counsel has become more integral to business strategy earlier in a company’s lifecycle, reflecting the evolving complexities of the legal and corporate landscapes. At different stages of a company’s growth, the legal leader’s title and role can vary widely, often influenced by the company’s specific needs and stage of development. For instance, early on, a company might hire a Corporate Counsel, Senior Counsel, or Director of Legal to handle basic commercial and technology contracts, reporting to the CFO, COO, or another executive without board interaction.
However, as a company matures or faces significant legal challenges, the need for a more seasoned legal executive emerges. This can lead to the hiring of a General Counsel (GC) or a Vice President (VP) of Legal, often depending on the size and maturity of the company, each with distinct profiles and responsibilities.
Companies usually hire a GC when the company is mature, near a liquidity event, and rapidly scaling. The GC typically has extensive experience (around 15-25+ years), possibly including prior GC roles or senior positions at major companies, and is well-versed in a broad range of legal issues, including corporate governance. Reporting directly to the CEO, the GC oversees all legal matters, domestic and international, often with the authority to build a legal team and participate in board meetings. Compensation for a GC is at the executive level, with stock options representing a not insignificant percentage of the company.
A VP of Legal (sometimes called “GC Light”) is more common at early to mid-stage companies with no near-term liquidity event. Companies at this stage are looking for a more experienced attorney to build the legal function, but also someone who can lead and handle the day-to-day work, such as commercial and technological transactions, creating effective and replicable legal management systems, processes and procedures, setting legal department KPIs and objectives and reporting on legal team metrics and progress toward goals, and driving legal technology adoption.
Some example process and legal technology adoption initiatives for the VP of Legal may include:
- Leading the creation and management of form contracts and other legal templates.
- Creating effective and replicable legal management systems, processes, and procedures.
- Establishing and refining legal workflows and best practices playbooks, such as vendor contract or sales contract review playbooks and risk criteria.
- Coordinating the development of policies and procedures with key business leaders.
- Oversee the management and maintenance of all company legal templates.
- Standardizing legal intake processes, including forms and review and approval workflows.
- Establishing a system for the storage and upkeep of contracts, such as implementing a contract lifecycle management system.
- Setting the legal department’s strategy and roadmap, aligning it with company business objectives and growth plans.
A candidate for the VP of Legal Role usually has not held a GC title before but has served as the No 2. lawyer in an in-house legal department and has broad generalist experience (ideally including experience with commercial contracts, regulatory and compliance, consumer and e-commerce, litigation and risk management, employment, intellectual property, and corporate law). Other titles for this role include “Head of Legal,” “Division General Counsel,”, “Head of Legal Affairs,” and “Director of Legal Affairs.”
Understanding the VP of Legal Role
The VP of Legal acts as a key strategic advisor to an organization, ensuring legal compliance, minimizing risk, and contributing to the overall business strategy. They have a pivotal role in managing the in-house legal team and liaising with external counsel. The VP of Legal often reports directly to the Chief Legal Officer (CLO) or General Counsel (GC). In some organizations, these titles may be used interchangeably, depending on the structure and needs of the business. In organizations without a CLO or GC, the VP of Legal may serve as the top legal executive.
Key Functions of the VP of Legal
- Strategic Leadership: They provide guidance on the legal implications of the company’s strategic initiatives.
- Risk Management: The role involves identifying potential legal issues and developing risk mitigation strategies.
- Compliance Oversight: Ensuring that the company adheres to all laws and regulations applicable to its operations.
- Contract Negotiation: They often take the lead in negotiating significant contracts with customers, suppliers, and partners.
- Intellectual Property Management: They oversee the protection of the company’s IP assets.
- Litigation Management: They coordinate the company’s legal response when disputes arise.
- Transactional Support: They support mergers, acquisitions, and other corporate transactions.
- Team Development: Leading and expanding the in-house legal team to align with the company’s growth.
The Growing Importance of the VP of Legal Function
The VP of Legal role is more than just an in-house counsel. They are a business leader, a part of the executive team with a voice in the boardroom. Their role has evolved due to several factors:
- Complex Regulatory Landscape: As regulations become more intricate, the expertise of a VP of Legal ensures compliance and informed risk-taking.
- Cost Management: With rising legal expenses, companies are expanding in-house capabilities to manage costs better.
- Business Integration: There is a growing recognition of the importance of legal in the business decision-making process.
- Proactive Risk Mitigation: Companies are looking to be more proactive rather than reactive in managing risks.
Sample VP of Legal Job Description
Title: Vice President of Legal
Reports to: Chief Legal Officer/Chief Executive Officer
Position Summary: As the Vice President of Legal, you will serve as a strategic advisor to our organization, ensuring legal conformity and mitigating risks. Your role will include:
- Overseeing the legal aspects of our business.
- Providing legal guidance on company strategies and their implementation.
- Managing the work of external counsel.
- Leading the in-house legal team.
Key Responsibilities of the VP of Legal:
- Oversee the delivery of legal services and resources to accomplish company goals, strategies, and priorities.
- Maintain a deep understanding of the company’s business and industry and provide leadership in strategic business decisions from a legal perspective.
- Manage a team of in-house counsel and support staff and coordinate with external lawyers and advisors.
- Ensure the company’s compliance with all applicable laws, regulations, and standards in the United States and international jurisdictions where the company operates.
- Provide expert and strategic legal advice to management on a variety of legal topics, including contracts, litigation risks, business structure, labor laws, intellectual property, and regulatory matters.
- Draft, review, and negotiate major and critical contracts, including customer agreements, vendor contracts, partnership agreements, and employment contracts.
- Develop and lead corporate legal strategy to promote and protect the company’s matters.
- Implement effective risk management techniques and offer proactive advice on possible legal issues.
- Represent the company in legal proceedings.
- Develop and oversee the budget for the legal department.
Qualifications for the VP of Legal:
- Juris Doctor (JD) from an accredited law school.
- Licensed to practice law in the state of [State] or eligible for in-state licensure.
- A minimum of 10 years of law practice experience is required, with a preference for a combination of law firm and in-house experience.
- Strong leadership and management skills, with a track record of building and leading a team of legal professionals.
- Exceptional negotiation skills with experience in managing complex deals and agreements.
- Proven experience in corporate governance, risk management, and compliance.
- Knowledge of statutes, rules, and regulations pertaining to businesses, particularly within [specify industry if applicable].
- Excellent communication and interpersonal skills, with the ability to interface effectively with all levels of the organization and external parties.
The rise of the VP of Legal function is a testament to legal teams' increasingly strategic role in the modern business environment. By melding legal expertise with business acumen, the VP of Legal can become a cornerstone of executive leadership, crucial to helping the company navigate and grow.