Does a law firm need a General Counsel? While the notion of piling
lawyers on top of lawyers may seem counterintuitive, let’s step back
and play one of my favorite thought experiments: What (if anything)
in the nature of a law firm as a business differentiates it in some critical
way from a normal for-profit corporation operating on a similar scale
and scope?
UK-based
firms are increasingly asking themselves this question and
here in New York, Shearman & Sterling has just appointed its first General
Counsel: John Shutkin, who comes from 16 years at KPMG International
as its G.C. What will keep him busy? Conflicts (internal
and external), risk management and insurance, firm governance and compliance,
and the inevitable litigation and HR issues. Shearman & Sterling
has, wisely I believe, chosen not to make Shutkin an
equity partner, so his compensation will not be tied to the firm’s financial
performance.
According to a recent Altman-Weill
survey, nearly two-thirds of the
top 200 US firms have a designated General Counsel, although it’s typically
a lawyer with a full practice as well who advises part-time; and of the
one-third without such a formal arrangement, many plan to designate
someone in the next year. As the world regulatory environment continues
down the road to ever-increasing complexity, a full-time G.C. makes sense;
lawyers shouldn’t have to stay current on every new governance wrinkle
any more than should corporate executives running similar-sized businesses. It
really is "someone else’s job."
