Less than 10% of GCs play an executive role in their companies, study finds

Less than 10% of GCs play an executive role in their companies, according to a study conducted by Gartner Inc.

According to the findings of a poll taken by the NYSE-listed research and advisory firm, only 8% of GCs truly embraced the role of a corporate executive, even though 46% claimed that it was their ideal role. In fact, over half of the GCs polled (59%) said that they simply served as lead attorneys for the corporations that employ them, advising on legal matters and taking on tactical work.

With only a small percentage handling strategic work, many GCs claim that they are failing to meet executive expectations and to support the board effectively.

Fewer than half of GCs feel they have a considerable impact when it comes to identifying and managing emerging issues, supporting the CEO or playing a role in executive corporate initiatives. Meanwhile, less than 25% believe they contribute significantly to the establishment of company strategy.

However, the COVID-19 pandemic has made executive-level GC advice more important than ever, Gartner said. Otherwise, a company’s performance could decline.

The firm breaks down the definition of personal effectiveness for a GC into three facets: the achievement of personal objectives, sufficient influence with CxOs and significant contribution to firm outcomes.

“Achieving these three components at least means you’ve done your job, have the ability to sway decisions when necessary, and help the company prosper. Unfortunately, only one in five GC meet this standard of effectiveness. This is concerning in an environment where many are looking to the GC for leadership,” said Abbott Martin, vice president of research at Gartner Legal and Compliance.

Behaviours of personally effective GCs

Martin said that personally effective GCs pour 52% more of their time into strategy and 42% more time into business guidance than their peers do. Thus, GCs must aim to avoid being stuck in the mire of day-to-day tactical legal tasks, and manage their time to provide advice to high-level executives.

“They achieve this by having intentional conversations with the CEO and the board about their highest value role and the corporate decisions that most benefit from GC involvement,” Martin said.

With emerging business models and technologies facilitating organisational scale and decision-making processes that do not necessarily mesh with the regulatory and control environment of most companies, Martin said that personally effective GCs “address this challenge head on by ensuring a consensus risk appetite, clarifying the corporate owners of risk and determining the level at which the risk should be addressed.”

“This is about proactively addressing the company’s risk exposures—whether legal or not,” he said.

Moreover, personally effective GCs acknowledge the needs of clients in addition to those of business partners.

“The best GCs ensure that their departments understand the core strategic priorities of business partners and use that to pressure test legal support on projects and force partners to make resource trade-offs,” Martin said. “GCs must understand client goals without relinquishing control of the path to reach them.”

Gartner said that GCs who grasp business partner challenges raise their personal effectiveness levels by 39%, while agreeing on client service plans boosts effectiveness by 21%.

Another big factor in effectiveness lies in how GCs allocate their time in a day. Gartner said that the average GC can waste between a quarter and a third of their time in unnecessary interruptions, like doing someone else’s work or attending meetings where they are not involved.

“Personally effective GCs are ruthless about their time management and as a result have 27 fewer ‘wasted’ days a year,” Martin said. “Simple behaviours can make a dramatic difference in time management. For example, simply announcing your priorities reduces interruptions and empowers staff. GCs should also audit their schedules to make them align with their priorities.”

Finally, personally effective GCs push for investment in legal to boost stagnating productivity. Gartner said that 78% of GCs believed legal speed had either stayed the same or declined in the last two years, while 81% felt that “legal cost as a percent of company revenue increased or stayed the same.”

Personally effective GCs take the initiative to request additional resources for the legal department—allowing them to concentrate on providing executive guidance.