KPMG employed Meridien West to conduct the study that interviewed 320 in-house General Counsel from 32 countries, and found the perception about General Counsel changing fast in the wake of a growing spate of trade regulations with both national and international implications.
According to the survey, in a significant step forward for General Counsel, 67 percent of respondents agreed that they were now more involved in commercial decision-making than they were five years ago. However, at least 79 percent of respondents held the view that greater involvement of the General Counsel in commercial decision-making could significantly reduce risks and enhance company performance.
When asked about this gap in expectations in demonstrating how business organizations viewed their legal departments, the survey found at least five out of 16 General Counsel responding to the question using the phrase “necessary evil.”
One General Counsel with a more neutral view commented, “we are on a journey from being viewed as a necessary evil to an essential part of the business and I would say that we have made progress.” Another said, “there is a variety of views; for some it's a necessary evil, while for others it's somebody to provide information, legal or otherwise. Some see it as somebody else to make the difficult decisions and some see it very positively as an effective way to help manage risk.”
Surprisingly, the survey notes at least one company president using the same phrase, “a necessary evil” to describe the legal department and holding “we would all like to do away with legal formalities.” However, that seems to be wishful thinking, as more and more General Counsel are being included in company executive boards around the world.
Globally, the survey found that about 38 percent of General Counsel are members of the main Board of business organizations, and about 43 percent General Counsel reporting directly to the Board or participating in Board meetings.
As one General Counsel told the survey interviewer on the changing perceptions of businesses about the role of in-house legal departments, “they understand why they need to have us involved as they have heard plenty of ‘horror stories' of things going wrong when legal teams aren't involved, or are involved too late.”
Besides, other important findings in the 58-page survey report, one struck us as most relevant for General Counsel today:
The survey notes that where GC were already wielding influence in commercial decisions, “they have learned to present their legal and regulatory knowledge in the powerful, practical, commercial terms that their Boards recognize and appreciate.”
The KPMG survey quoted can be found here
http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/general-counsel-survey-2012v2.pdf
