When the general counsel is promoted to become CEO, the successor general counsel usually reports to that executive, a lawyer (See my post of Jan. 27, 2006 regarding promotions of general counsel; Feb. 10, 2006 #1; March 13, 2006 #2; April 10, 2006 #3; Oct. 2, 2006 #3; April 12, 2006 on UK GC ambitions; Oct. 25, 2006 with more examples and references; and March 1, 2007 on Angela Braly’s promotion.).
An example came to light in InsideCounsel, Sept. 2006 at 76. Marschall Smith, who has the distinction of having been general counsel at three companies before taking that post at Brunswick Corp (See my post of Oct. 2, 2006 #2), reports to the former general counsel.
Smith finds all benefits in reporting to someone who understands his job and its pressures and difficulties, and acknowledges none of the possible disadvantages: second-guessing, dueling interpretations, avoidance, or competition.
It may make a difference that Smith’s legal function is very decentralized. Each of Brunswick’s five autonomous divisions has a general counsel who reports to the president of the division. Smith thinks that structure is appropriate because the person who is most familiar with the business unit makes the legal decisions. True, but how can someone truly be the general counsel of a company if most of the legal work is beyond that person’s direct control?
On his corporate staff Smith has two patent and trademark lawyers, a securities and finance lawyer, a generalist lawyer, and two lawyers in Asia and Europe who report to him (See my post of March 23, 2007 about Raytheon and its decentralized reporting of top lawyers to business units.).