Key Takeaways
Many organizations approach general counsel succession planning only when a departure is imminent. This article explores why a structured, objective process is essential for selecting legal leadership that aligns with the company's future needs.
- Involving an outgoing general counsel too heavily in selecting a successor can introduce bias, governance concerns and internal political challenges.
- The incumbent's role is most valuable during the planning phase, where they can identify skill gaps, document risks and assess internal talent.
- HR should play a central role in managing the search process and ensuring alignment between candidates, culture and long-term business objectives.
- Organizations should establish a clear decision-making authority to avoid stakeholder deadlock and keep the search moving efficiently.
- Effective succession planning requires early preparation, objective evaluation criteria, ongoing talent development and regular review of leadership needs.
Recently, the departure of several high-profile general counsel — including at Goldman Sachs, the Coca-Cola Co. and Carlsberg Group — has forced leaders at the organizations to consider how they should go about looking for a replacement.
As a former general counsel, I know this can be a difficult position for companies as they weigh up involving their incumbents or excluding them from the process. While it may seem beneficial for general counsel to hire over their own grave, ultimately it can lead to a host of complications that can jeopardize the firm's leadership transition.
Incumbent Dilemma
Handing the keys of the succession process to the outgoing general counsel is a common mistake that boards make. While well-intentioned, involving the incumbent general counsel in choosing or vetting their successor creates significant governance and psychological risks.
Instead, the role of the incumbent should be limited to defining technical gaps and providing historical performance data.
There are many reasons to keep incumbents excluded from interviewing, ranking, vetting or selecting their successor. A key one is that subconsciously, most leaders look for successors who mirror their own strengths and career background.
If the incumbent rose through the ranks as a litigator, they may overvalue litigation skills, failing to recognize that the company's future strategy requires a data privacy or M&A expert. The incumbent's involvement frequently results in cloning the past rather than hiring for the future.
If internal candidates are vying for the role, involving the incumbent general counsel can also introduce severe political friction. It can lead to favoritism, subjective grading or defensive positioning within the legal team.
Internal candidates must be evaluated via an objective, institutional framework, not through the subjective lens of their current boss.
Knowing When to Drop the Reins
The incumbent general counsel's involvement should therefore be strictly limited to the preplanning phase. They should be asked to document current regulatory vulnerabilities, highlight technical skill gaps within the department, and provide historical performance data on internal talent years before succession takes place. Once active benchmarking or search begins, the incumbent must step back entirely.
Human resource teams are crucial for a successful succession process and should be the driving force behind any search for candidates: They are often able to tap into their own professional network.
For ease of transition, there are a couple of key areas that need to be considered before the search begins.
Leading With Bigger Cultural Picture
For selecting a new general counsel, internal human resources teams have an in-depth understanding of the company's culture, values and long-term goals. They can provide essential context to align candidates with the organization's needs.
A clear understanding of both the necessary culture and how a candidate would fit into the organizational culture can be a vital help to all involved in the process.
The core role of internal HR teams should also be managing the logistics of the selection process, including interviews, communications and onboarding procedures, as they are most familiar with the best systems for the organization.
Other roles, including sourcing and evaluating candidates, may also be completed by the internal HR teams, but can be effectively outsourced to any partners helping in the transition process.
Ultimate Decision-Maker
In the complex landscape of leadership transitions, identifying the ultimate decision-maker is paramount. The presence of various stakeholders with differing opinions can lead to a stalemate, complicating the selection process.
From board members to senior executives and legal teams, multiple stakeholders often have vested interests in the choice of a new GC. Their differing perspectives can create friction, especially if they prioritize various attributes in a candidate, e.g., strategy versus operational skills. Without a designated decision-maker, discussions can devolve into debate rather than action, hampering the selection process and potentially delaying critical transitions.
To mitigate these risks, organizations must clearly define who holds ultimate authority in the decision-making process. This can be achieved through appointing a single individual or a small committee with the authority to make final decisions, which ensures a streamlined process. This person should be someone with the experience and insight to navigate the complexities of stakeholder interests effectively.
The appointed decision-maker should facilitate discussions among stakeholders, ensuring that each voice is heard, while guiding the group toward a unified conclusion. This can help alleviate concerns and minimize the potential for conflict.
Ensuring Accountability
By establishing clear criteria for candidate selection and communicating them to all stakeholders, the decision-maker can foster a sense of accountability. Stakeholders will understand the rationale behind the final choice, reducing the likelihood of dissent.
Keeping stakeholders informed throughout the process can help manage expectations and foster a sense of involvement. This transparency breeds trust and can facilitate smoother transitions.
Implementing Effective Succession Planning Strategies
There are a number of strategies that organizations should adopt.
Firms should initiate the search process well in advance of the incumbent's departure to allow for a thorough and thoughtful selection of candidates. Early engagement allows for deeper market insights and a more comprehensive search strategy.
Establishing objective criteria for evaluating candidates has advantages, allowing a focus on skills, experience and cultural fit, rather than personal connections. This involves identifying the core competencies required for the role and how they align with the firm's strategic objectives.
Stakeholders should be encouraged to hold transparent discussions about the transition process, allowing for input from various levels of the organization, without fear of reprisal. This open dialogue can help identify potential internal candidates and ensure alignment on expectations.
Firms should regularly assess succession plans to ensure that they remain aligned with organizational goals and market trends, making adjustments as necessary. This proactive approach allows firms to adapt to changing circumstances and identify emerging talent.
Firms should create a culture of growth, fostering an environment that values innovation and fresh perspectives, helping to attract and retain top talent while preparing for future transitions. This culture should encourage continuous learning and development, ensuring that potential successors are well-equipped for leadership roles.
Organizations should also leverage technology and data analytics to enhance the succession planning process. Tools that track employee performance, career aspirations and training opportunities can provide valuable insights that inform selection decisions.
A Clear Understanding
As firms navigate the intricacies of leadership transitions, the involvement of an incumbent general counsel in selecting their successor poses significant risks. In recognizing these dangers, organizations can ensure a more effective and impartial succession planning process.
By combining objective assessments with an understanding of the firm's culture and needs, organizations can safeguard the integrity of the transition. Furthermore, identifying the ultimate decision-maker and establishing a clear authority structure can prevent a stalemate and facilitate a smoother selection process.
