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Chief Legal Officer vs. General Counsel: Why It Matters for Your Business

Chief Legal Officer vs. General Counsel: Why It Matters for Your Business

Chief Legal Officer vs. General Counsel: Why It Matters for Your BusinessRachel Cottam
Head of Content

What’s the difference between a Chief Legal Officer and General Counsel on in-house teams? While General Counsel (GC) provides support in legal matters like litigation, compliance, and contract negotiation, a Chief Legal Officer (CLO) is a member of the executive team of your business and oversees the legal department on a big-picture level.  

Depending on the size of your team, you may only have a GC, only have a CLO, or maybe both.  Let’s break down the key duties and skills of these roles and talk about when to invest in each. 

Key Duties of a Chief Legal Officer

The Chief Legal Officer is a newer position in the business world. As organizations scale and become more complex, they see the need for a legal services executive who can oversee the legal department while also monitoring matters across the business. 

Some of the primary responsibilities of a CLO include:

Developing a Corporate Strategy

The CLO is an executive and typically part of the C-suite. The CLO often reports directly to the CEO and helps develop a business strategy for the executive and legal teams. 

The goal of the Chief Legal Officer is to protect the organization’s intellectual property and assets as the company continues to grow. This may include having a plan in place for certain risks, mergers and acquisitions, or regulatory compliance, as well as determining the appropriate makeup and roles of the legal department itself.

Providing Legal Advice to the CEO and Board

Chief Legal Officers must have a Juris Doctor (JD) and a relevant state license to practice law. This is what qualifies the CLO to provide sound legal advice to the CEO and board of the organization. Their legal function faces the organization’s decision-makers, rather than the outside world. The advice they offer affects business decisions going forward.

How to be successful as a CLO

To be successful, Chief Legal Officers should be more than just leaders of the legal department. As a CLO, you are a guardian of corporate ethics and a critical advisor in the boardroom. It’s not enough to mitigate risk when it arrives, CLOs must be future-facing problem solvers.  

In a Reuters article about the expanding influence of Chief Legal Officers, Kodwo Ghartey-Tagoe explains: “The board expects me to provide proactive advice on the company, industry, and competitive landscape. They expect me to help identify issues before they become legal risks.” 

Setting strategic goals for your legal team can help you prove your value to the executive team. Watch the recording of our recent goal-setting workshop to learn which goals to set and how to track them.   

Key Duties of General Counsel

When you think of a business’s in-house lawyer or team of lawyers, you are likely thinking of their General Counsel. The General Counsel is also a senior position within the legal department, and one that generally oversees regulatory compliance and meeting the organization’s legal obligations. 

General Counsel responsibilities may overlap with CLO responsibilities—a few priorities include:

Managing Legal Teams

Your General Counsel will head and manage your legal team. While the Chief Legal Officer oversees legal strategies on a higher level, General Counsel offers more hands-on management, making decisions in the moment for legal matters like compliance regulations, contract review and negotiation, asset protection, and litigation. The legal team will look to the GC for guidance, and legal issues needing more immediate attention will be brought to their attention.

Regulatory Compliance and Risk Management

One of the most important roles of General Counsel is managing and mitigating risk for the organization. That can mean protecting intellectual property or defining liability to decrease the risk of lawsuits. One major way to manage risk within the organization is through regulatory compliance.

Compliance with safety regulations, accessibility laws, and data privacy regulations (to name a few) is critical to business success. Failing to comply with relevant regulations can result in hefty fines and penalties, or worse. Your GC is the go-to expert for current regulations, keeping your business compliant.

How to be successful as a GC

Legal leader and influencer, Jessica Nguyen’s #1 piece of advice to new GCs is to be data-minded. She says that most GCs are not equipped to answer questions about contract processing, department renewals, etc. But sharing this data is the fastest way to prove your ROI to your executive team. 

Here’s Jessica’s advice on how to develop a data-first approach to the general counsel role: “First, find out where your contracts live and how they are organized (hint: they’re probably not in a consistent and easy-to-find way). Then, establish a process of capturing what’s in your contracts. Most contract management systems don’t help you to organize your legacy contracts. Lexion does with the power of our AI. 

Businesses expect legal teams to be data-driven. If you don’t have a tool like Lexion that can automate this tracking and reporting process, a spreadsheet is your friend.”

Does a company need both CLO and GC to function?

Every business is different, which means every legal department looks different. Not every company needs to have both a Chief Legal Officer and a General Counsel. In fact, for smaller legal departments, having both positions is likely unnecessary.

A Chief Legal Officer best serves the legal departments of growing and scaling organizations. If the legal department has upwards of 30 lawyers, it can quickly become a too spread out for one General Counsel to handle. This is where a Chief Legal Officer can be brought in to handle big-picture matters like developing strategies and working with the other executives to grow the business.

A Chief Legal Officer can also be a good idea for startups that have plans to grow, even if they’re still relatively small. Part of their role in creating a strategy is making a plan to grow the business and even develop a culture. This, again, can easily be separated from the role of the General Counsel so that both individual positions can run more efficiently.

When companies have both a Chief Legal Officer and a General Counsel, the CLO maintains executive responsibilities while the GC handles more administrative tasks.  

A Solution To Help Legal Executives Streamline Business Operations

Whether you are a legal department of one or 21, a CLM like Lexion will help you scale yourself and your team. Our software works to streamline the process of contract management and regulatory compliance, making your legal team more efficient. 

Download our free playbook for GCs or sign up for a demo to learn more about Lexion.  


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