GeoLegal Weekly #67: GCs are Not Helpless
I painted a picture of empowered GCs at a recent event. One raised their hand and told me to stop dreaming.
Last week I had the chance to speak for Elevate Flex Legal Services at a very tony event which brought together much of the Houston legal and legal technology community. Over fine wine I terrified participants about the unruly world we live in before providing them with techniques to manage the turmoil. Part of this extended to GCs considering whether they should have leadership for political elements of their organizations and whether they should lead AI transformation that could make their legal departments competitive with the services provided by law firms.
After all, corporations have engineers, they can offer equity to fantastic talent, they have access to capital and they generally make multi-year investments. Law firms are not structured to compete on these metrics. Thus, it's conceivable that law departments will outpace their law firms by building or buying software that empowers them.
I like when the audience challenges me so I was keen to listen to a GC who piped up to tell me I had it all wrong. According to this legal leader, I've painted a picture of all powerful GCs when in fact GCs are pretty helpless. GCs, according to them have no ability to demand resources or corporate reorgs. They are effectively takers with no sway. In the discussion, the guest was asked what their posture was on AI and their answer was "let's wait 10 years and see if its any good."
The most interesting thing to me was how striking this sounded when said out loud. Perhaps I spend too much time at legal tech conferences to remember that this is actually the caricature of legal. Throughout history, many legal departments have been known as tech skeptics and have often been starved of resources. They can be ridiculed as the "department of slow and no."
Yet the whole point is that in today's world, there is an efficiency boom to be had for legal as well as a strategic imperative to get legal's view at the board on both geopolitics and AI.
What CEO does not want a strategic legal department amid global turmoil? Perhaps one that is not global or not running a tech-intensive business. Of course, such a posture is a recipe for disruption.
What CFO would not be interested in cutting outside counsel spend through the implementation of efficiency software in legal? I mean sure you can pay what you've always paid while law firms maintain or increase margin by harnessing AI…but why?
What Chief Strategy Officer would not like to hear from the GC about regulatory arbitrage opportunities, whether identified by smart lawyers or smart software the lawyers use?
The list goes on. The point is that in today's world the window is open for ambitious GCs to seize the opportunities of volatility and technology change to throw the caricature out the window.
I know GCs that have greenlit dozens of AI projects in their department. I know GCs that have recently assumed Chief Legal Officer roles, taking over reporting lines for corporate affairs (including government affairs), risk and other main functions. I know GCs who are partnering with the business by taking a positive approach to accepting more risk so the business can safeguard against oncoming AI-powered competition. These legal leaders are evolving to become "business people with law degrees" rather than "lawyers in the business."
No doubt there are organizations who assume their legal leadership will continue to accept the status quo and, thus, are not knocking down legal's door to offer tech budgets or additional responsibilities. But that's why its all the more important for legal leader to be intentional about whether that's best for the business or not.
No doubt the GC who spoke up is relaying true lived experience that other GCs would recognize. But neither me nor that GC has a monopoly on truth in part because the truth is not yet clear.
In fact, the truth is in your hands to decide whether you want to drive change or stand still.
-SW
P.S.