I don’t think so, despite this sentence in a summary of Corporate Legal Times and Dickstein Shapiro’s Survey of CEOs, “40 percent of CEO’s are ‘very involved’ in their company’s selection of outside counsel, while only 23 percent leave the decision entirely to the company’s head lawyer.” (Oct. 2005 at 50). (See my post of Sept. 13, 2005 about the Board of Carey choosing counsel.)
Almost two thirds of the survey population were CEOs of companies smaller than $500 million. From the small companies dominating the survey, several speculations follow. Those companies mostly have only two or three lawyers, at most, so the CEOs thumb on the scale weighing outside counsel might well be heavier than in larger departments. Second, the lawyer in a smaller firm advising the CEO is likely to be less experienced than the CLOs of major companies.
A third reason for the 40 percent finding could be that the CEOs of smaller companies dominate decisions generally, not just in the legal sphere; they founded it, they made it, and by golly they run it! Too, the CEOs who responded remember the times they were consulted or picked a law firm, but they may not know all the times the CLO chose a lawyer without fuss, bother and CEO consultation. Finally, checking off “very involved” strokes the egos of CEOs.