Corporate boards are more frequently expecting that the companies they oversee have general counsel succession plans in place.
Cynthia Dow, who heads the global Legal, Regulatory & Compliance Officers practice at executive leadership advisory firm Russell Reynolds Associates, said GCs would be wise to respond to this dynamic by creating succession plans as soon as they start their jobs.
"If you think about yourself as a talent generator and someone who follows best practices from a governance perspective, thinking about succession on day one is absolutely critical,” Dow said.
She recently shared with Legal Dive several best practices for GCs eager to develop effective succession plans.
Provide exposure to key stakeholders
Once internal candidates are identified, a GC should think through how to give them significant exposure to the board and top executives, Dow said.
She also recommended these candidates be afforded opportunities to develop corporate governance skills, including by serving as corporate secretary or serving as the legal point person for a committee of the board.
Too often these types of opportunities are not provided to legal department personnel who could one day serve as GC.
“One of the pitfalls that we see is a general counsel might feel that they have potential successors but those people don't have sufficient visibility to members of the executive leadership team or to members of the board to the extent that there's a high level of confidence on the part of the board and the executive team that this person is ready for the role,” Dow said.
“So as part of a development plan, getting them opportunities to speak at important meetings and lead on important projects is a really critical piece of the approach,” she continued.
Give personnel diverse experiences
Dow, who is based in Boston, said she also recommends possible future GCs be given a variety of responsibilities and projects that allow them to demonstrate leadership skills.
This could include an in-house lawyer overseeing legal’s engagement with a certain business unit or serving as the legal point person for a region of the world such as EMEA or Asia-Pacific.
These leadership opportunities can prevent against board and C-suite members feeling that the internal candidates for a GC opening have “just been in the shadow of the general counsel, and they haven't yet had the chance to demonstrate their capability,” Dow said.
She also said GCs would be wise to expose their potential replacements to legal practice areas they may not have had exposure to such as M&A, litigation or compliance.
Providing in-house counsel this well-rounded set of experiences can produce retention benefits in addition to aiding with succession planning.
"Often in legal departments they're pretty flat organizations and the way that you engage, retain and develop people is by giving them lateral responsibility and expanded breadth of experience rather than giving them a next title or the next level role in the organization,” Dow said.
Multiple possible successors
She said the companies that most effectively engage in succession planning seek to develop multiple potential successors for the GC role.
This approach ensures that if one of the in-house lawyers considered a likely successor leaves for another job, there are still other candidates gaining experiences that would help them ascend to the top of the legal department.
For example, Russell Reynolds helped the GC of a large global IT company assess the readiness of his six direct reports to potentially become GC. Three of the six candidates were determined to have the potential to ascend to the GC role if they took specific development steps.
“To address these needs and close experience gaps, the client created a rotational program to have the three most promising candidates swap roles,” a 2021 Russell Reynolds report said.
Overall, Dow said one clear indication of successful GC succession planning is when a company “has been able to repeatedly draw from their own internal talent pools in order to appoint their general counsel."
These strong internal candidates are then poised to help the company move forward on a positive trajectory and meet their business goals.
"The internal candidate can ensure a high degree of continuity and a readiness to really hit the ground running,” Dow said.