We believe that many lawyers have the talent to take on the top job. Why then, for those who are called, are so few chosen?
Boris Johnson’s put down of Labour leader, Sir Keir Starmer QC, received plenty of coverage in the media. What this comment may say about the merits of political leadership - why value boring things like honesty and integrity, intellectual rigour and mastery of complex detail when compared to the excitement of vapid slogans, slapstick gaffes and common room cunning – is not our concern. (Lustrum will happily leave that field to those better qualified).
Instead, we set ourselves to the question of why so few lawyers lead our major organisations? Seemingly, the judgement of business is as damning as politics. Always the specialist, rarely the Supremo...
And, before we risk further offending our community, let us say for the record: we are not sick of experts. Indeed, it’s our admiration and awe of the kind of expertise we’ve been privileged enough to see through our legal careers, that has driven us to this subject.
Equally, we recognise that many of us are content to practise law (with all its variety and wonders) and have no wish to lead. Those folk didn’t enter the profession to get distracted by less interesting things.
However, we do believe that many lawyers have the talent to do the top job. Why then, for those who are called, are so few chosen?
Given an era of ever more law and regulation, it should be, to borrow Jane Austen’s words: a “truth universally acknowledged” that the General Counsel (GC) is in a unique position to respond to the challenges of today’s business. Indeed, given their wide perspective, it is perhaps surprising that a company’s top lawyer (at least, in the UK) is rarely considered as a potential CEO. Especially, in highly regulated organisations.
Even prior to the pandemic, our age has been shaped by greater government intervention in business. From the ability to block corporate tie-ups that they don’t like (on wide national security grounds) to requiring companies to explain ever more (from climate risk to workforce pay ratios), states are expanding their reach. Again, this is not a political observation. Simply, a fact.
Data, the new ‘oil’ of the digital economy is another area of huge complexity. Where the EU has led with GDPR, numerous others are following. The US looks certain to have a collection of state-level regimes. China will enact its own set of data privacy rules. And international corporates are subject to laws in so many other places…
Yet, whilst boards credit the lawyer’s ability to identify risk, they seem to have far less belief that the GC will also be able to set aside their inherent caution to move their business forward.
Despite the numerous examples of supposed masterstrokes turning into case studies of the wrong kind, there still appear many organisations (again, perhaps aping politics?) that are attracted to the buccaneering, dice-rolling Chief. Indeed, particular criticism is often levelled at the CEO who shows reluctance to risk shareholder money – sometimes the future of their business – on the oft-cited transformational M&A that statistically, regularly fails to hit the jackpot.
We lawyers – the quintessential ‘half-emptyists’ – are seen as too timid to grab the opportunities that will change the game. You cannot just be smart, you must be bold with it.
We agree that responding to the demands and pace of the modern corporate environment requires adept leadership and the ability to realise opportunities as well as manage risk.
Yet, we’ve seen and worked with plenty of lawyers who do that really well, daily. That surely isn’t the reason they don’t ascend the ‘greasy pole’.
Perhaps the great Sherlock Holmes would look at us with distain and pronounce that the answer is “elementary”? This wouldn’t feature in Watson’s chronicles of brilliant logical deduction.
The simple, unremarkable truth would be that the GC isn’t considered in CEO successions because they lack broad business experience, vision and, beyond that, let’s just say it quietly…charisma. Case closed! Now for that Baskerville family and their canine problem!
Yet the GC is (or should be!) a very capable businessperson with skills and experience honed in many different situations and contexts. They will be used to operating in the boardroom in the same way as other potential leaders. They are highly credible at senior level.
So, where might they been seen to fall down? How can they be said not to possess the same abilities as their peers?
Firstly, we would recognise that the role – requiring independence, hard questions and bestriding the Executive Team and the Board – may not always present the GC with the best opportunities to demonstrate their business credentials. Often, we have to be the constructive critic – curiously, others are very happy for us to shoulder that responsibility! There aren’t many situations where the lawyer is congratulated afterwards for things that didn’t happen.
Then, as Lustrum has said before, is the GC truly operating on a level playing field?
Regardless of intellect, are they able to articulate subjects in the same way, utilising not just words but numbers and data?
Put another way, an annual report has both narrative and financial statements. So, and irrespective of CEO ambitions, we would say that the GC must – like their colleagues – be comfortable with corporate prose as well as displaying their obvious gifts for poetry…
Another angle is the willingness to move into broader business discussions. Although a team member, do we lawyers feel comfortable talking about people and brand? Do we have the confidence to challenge the CFO on the numbers? (As an aside, most executive colleagues are not shy in giving their views on legal matters). For many GCs, there may also be a reluctance to step beyond being the adviser – sometimes, a sense even that they will be straying outside their ‘lane’.
All this said, we think the biggest barrier to the wannabe CEO is likely to be a lack of P&L responsibility. Whilst this isn’t just the case for legal leaders (how many CFOs would similarly have this ‘badge’?), it is a crucial point of difference.
In many instances, those chosen to lead their business can point to having run divisions or indeed organisations before. For GCs, most likely heading a function labelled as a cost centre, the absence of a track record growing the top line can be especially limiting. Again, acknowledging that legal leaders are rarely seen as business builders is a key part of understanding why so few become CEOs.
Perhaps inevitably, the better news for the aspiring lawyer CEOs comes from the United States. There, it is much more accepted for corporate leaders to have a legal background.
And before anyone points to particular characteristics of the US business environment – namely, heightened litigation – have they seen the creeping tide of fines and regulatory penalties this side of the Atlantic? You’ve only to ask a bank about money laundering risk or organisations handling large volumes of personal data. And, how many corporates are beyond the reach of the American courts and regulators? Good luck with that!
So, we would encourage our readers to “go West” and consider the examples of major businesses (from finance to airlines, from tech to pharma) who have chosen lawyers and seemingly thrived under them. We’d further suggest that methodical analysis and, when required, caution in the face of dangers, are characteristics that may well have served these leaders well.
And we’re anyway unsure that you become CEO of an investment banking titan (Lloyd Blankfein who began as a tax lawyer) without having an eye for opportunity.
Given the growing similarities, we’d hope that we're soon to see another successful US import: the legally-trained CEO.
In the words of a song from too long ago: “the only way is up”. We passionately believe that there is talent, leadership and business nous in abundance within the current GC community. Truly, a very diverse mix of skills and wider experience fit to grace the top of any organisation.
We’ve been fortunate enough to see some among us dazzle MPs and excite their colleagues at company jamborees. These individuals know that Inspiration isn’t a CK fragrance. Equally, much has been written about what makes great leaders. Thankfully for those less extrovert, there’s a growing realisation that there’s no single type (“A” or otherwise). We do not pretend to step into that debate here. Instead, our plea is for the qualities that a legal leader can offer to be recognised.
Again, we all need a start and, sometimes, also an element of fortune. There are many situations where the right GC can prove their worth to the board and stake their claim to the top job. Sometimes, adversity allows a lawyer to shine and demonstrate a wider range of skills that may have been hidden beforehand.
Equally, those that want to step up should ask for greater general management responsibility and the chance to move into the business earlier in their careers. A bold move perhaps but you won’t be left wondering if you could have been a contender later on.
It may not be so fashionable these days to talk about Jack Welsh at GE. We at Lustrum would however pick out the support he gave to his lawyers and their careers whilst CEO. Both in terms of investment in people, he never shirked on paying for the best, and the opportunities these amazing folk were given. Suffice to say, that some of the stars of the GE Legal department went on to become CEOs both within the organisation and beyond. (They got the chance to run things…)
Clearly, that kind of sponsorship is priceless. You also have to seize those chances and repay the trust you’ve been shown by the Boss.
As we said at the outset, this is not a prescription for all. Individual lawyers must want to become the CEO. It’s a choice that obviously isn’t for everyone.
Yet, there are enough ex-accountants running companies. Why not us? Doesn’t the GC have a similar purview across the entire organisation? Can CFOs collectively inspire in a way that we cannot?
And finally, this crucially isn’t just about us. Far more importantly, the legal leaders of today owe a duty to those who come after. How are we going to create more opportunities for them? Wouldn’t showing that we can get to the ‘top of the shop’ be a pretty good start?
We’ve said our piece. Lustrum’s gauntlet (maybe, our glove) is lying on the floor. Who will show the next generation of lawyers that they too can lead? Who will show that a different style of leadership most definitely has its place?
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