What Is General Counsel and How Does This Role Help Your Board?
The underlying threat of litigation may motivate a board to ask, “What is general counsel, and what can this type of attorney do to help us?”
Ever-changing regulations and the risk of lawsuits mean that nonprofit boards need sound legal advice as critical issues arise. The general counsel (oftentimes abbreviated ‘GC’) is a valuable resource to help boards strategize and make decisions, as well as assist the executive director.
While nonprofits historically consult with attorneys as needed, the litigiousness of our society may prompt some nonprofit boards to hire a general counsel to protect the organization, so they can call on an attorney whenever they need to. As a member of the executive leadership team, the board may allow the general counsel to collaborate with the board and management using their online board management system.
We’ll describe what the general counsel does, how the GC role has been evolving in recent years and why the board’s relationship with the them matters.
What Is General Counsel?
To answer the question, “What is general counsel?” your nonprofit board needs to understand what the role entails. In general terms, this role facilitates transactions, handles compliance matters and provides guidance and advice for the board of directors and the executive director.
GCs are licensed attorneys who have passed their state bar examination. Organizations operating in multiple states may hire a general counsel that has passed the Multistate Bar Examination or has certain state-specific certifications.
As for their roles and responsibilities, the word ‘general’ in general counsel refers to the notion that an attorney filling this role manages a variety of legal matters.
Depending on the general counsel’s job description, the person filling the role may handle matters that involve the following:
- Trademark protection
- Mergers or acquisitions
- Labor disputes
- Employment law
- Marketing issues
- Intellectual property
- Tax laws
- Advocacy for public policy
Typical Traits of a GC
While boards may have specific characteristics in mind when selecting the best general counsel for their organization, the common traits of a corporate GC for a nonprofit or corporation include:
- Sound judgment
- Leadership skills
- Communication skills
- Broad legal subject matter expertise
- Critical thinking
Attorneys who serve in the general counsel role must understand and promote a corporate culture that maintains the highest possible standards of legal and ethical behavior. The position also requires someone who understands and has experience in the industry and uses insight to apply legal knowledge to all parts of the business.
What Does the General Counsel Do?
While the general counsel routinely represents clients in pending legal matters, their job descriptions often encompass much more than that. For example, a they work proactively to mitigate an organization’s potential legal problems.
An individual serving this role may handle any of the following duties as part of their general counsel roles and responsibilities:
- Analyzing transactions
- Reviewing contracts
- Managing or analyzing the cost of legal services
- Researching compliance matters
- Reviewing marketing activities for legal compliance
- Reviewing legal forms and documents
- Reviewing insurance contracts
General Counsel in Nonprofits
In the nonprofit space, a general counsel benefits the board of directors by helping them ensure legal compliance in the day-to-day operations. Moreover, a GC assists boards in their strategic planning efforts as they strive for future progress. Furthermore, as regulations are continually changing in the nonprofit realm, the general counsel is usually responsible for staying current with regulatory compliance and advising the board of changes.
The Role of the GC Is Evolving
While the role of the general counsel has traditionally focused on legal guidance and activities, five new areas have evolved that require their expertise. These areas include:
- Assessing risks
- Strategizing for the future
- Analyzing global trends
- Advocating legislatively
- Representing organizations publicly
The role of general counsel is more prominent than in past years. Some experts today believe that the GC is as important as the CFO.
According to Brian Woram, executive vice president and general counsel of KB Home, “To be effective means being someone who is not only a good attorney, but also someone who has an appropriate influence on the overall activities of the business — someone whose advice is sought out and heeded.”
The Board’s Relationship With the General Counsel
The general counsel is considered a member of the management team. This is because their advice and guidance are fundamental to making everyday business decisions.
Generally, the executive director or CEO is responsible for recruiting and hiring an individual to serve as the organization’s GC. This position typically reports to the CEO or executive director. As a means of checks and balances, executive leaders ask for feedback from the board of directors before deciding who gets hired.
While the executive leaders are responsible for the organization’s day-to-day operations, the board of directors serves as overseers. In their role, the board accepts responsibility for the duty of care for the organization. In addition to supporting the executive leadership of an organization, the general counsel is an advisor to the board on legal matters that affect the board’s fiduciary responsibilities.
Something a general counsel and the board have in common is to serve in the role of guardians over an organization. In that way, they must partner together for the good of the organization. In today’s world, the GCs may collaborate with board members by attending board meetings regularly.
Because the general counsel and board members rely on each other in important ways, they need to work toward establishing a good relationship. An excellent first step toward establishing a good rapport is for the board to invite the GC to at least a few board meetings per year and also other notable events. Regular meetings between the board and the general counsel can also alleviate any concerns about any hidden agendas.
Concluding Thoughts on the Role of General Counsel
The role of general counsel provides various benefits for a board of directors. A qualified GC is committed to supporting the executive leadership and the board of directors in different ways. Their role is equally important to both parties.
As society has grown and evolved, the general counsel role has needed to expand to meet the emerging needs of modern organizations. While the GC’s role is becoming increasingly complex, attorneys are eager to serve because of the multi-faceted experience it can provide them. For this reason, nonprofit boards can pick from the cream of the crop regarding talent.