Why general counsel need a seat at the table before a problem arises

More often than not, when a business is facing a legal dispute, the general counsel and his/her team are called in to fight an already raging fire. 

Rather than involving them once the fire has already been lit, your in-house legal team should ideally have a seat at the table before the match has even been struck. 

Whether a start-up or a large international company, a proactive approach to dealing with internal and external disputes can be achieved by involving your in-house legal team sooner, rather than later. 

The role of a modern GC

At a recent event hosted by MinterEllison with ASX200 general counsel, the role of the ‘modern’ general was seen as extending across a broad range of areas such as strategic planning, financial affairs, business process and project management – much like, as I have said on numerous occasions, a ‘jack (or jill) of all trades’. 

Inherently forward thinkers, general counsel and their in-house teams play a crucial role in identifying potential issues before they come to fruition Their involvement at the strategy and planning stage can help iron out potential problems or areas of concern before they arise, as opposed to after the fact. 

Consider if you will the issue of climate change and the growing compliance pressure on companies as an example. The societal pressure on business to not only cut emissions, but to support and take action on climate change policy is growing. While the regulatory burden has yet to hit, proactive companies and decision-makers – like Atlassian – are already implementing strategies that take into consideration how changes might affect their business. 

In this instance, bringing general counsel into the conversation at an early stage increases a company’s chances of a smooth transition into regulatory compliance. Using general counsel in an advisory role before an issue arises should ultimately decrease the risk of needing to enter into dispute resolution, let alone the financial and reputational impact on the business.  

The digital disruption

We can see a similar example with digital transformation. According to the Australian Trade and Investment Commission, Australia’s technology-driven service industries have been growing at an average rate of 3.4 per cent, making it one of the fastest-growing sectors.

It is inevitable that with disruption comes change. The recent Royal Commission into banking highlighted the importance of legal compliance and it is now more critical than ever that CEO’s keep their general counsel close and have them play an active advisory role in the broader business. Calling them in once things have already gone pear shaped fails to appreciate the real value that in-house lawyers can make. 

Back in 2017, a roundtable event hosted by InfoTrack and Lawyers Weekly discussed the changing role of in-house counsel. In that discussion, members of the in-house teams at Uber and McDonalds highlighted the benefits of having lawyers who are both ‘technically minded’ and who play an integral part of business operations, pointing to the positive impact on business efficiency.  

One of the main risk management concerns for general counsel is protecting their client’s risk profile. With over 95 class actions against large companies currently on the Federal Court list in both New South Wales and Victoria, litigation is one of the more costly and time investments for companies in Australia. Your general counsels’ time can be better spent if you bring them into the conversation much earlier so they can help the management team find creative solutions to address and manage the risk landscape.