Law Department Management Blog
Smile at the quote that follows, for it crams a lot of misunderstanding into a few lines: “For example, when faced with significant legal challenges, a company will often appoint a lawyer as their CEO. The legal department then has increased stature, power and resources that allow the firm to address its legal challenges.”
The authors of this mishmash, writing in Cal. Mgt. Rev., Vol. 49, Summer 2007 at 55, were trying to give a realistic instance of the “contingent power model.” Briefly, the model posits that when companies face a threat, they promote and support people who can address the threat. The trouble is, those individuals consolidate their power and refuse to surrender it once the threat passes and the need for their particular skills recedes. Hence the made-up example of the lawyer-CEO coming in when legal fires burn brightly.
The problem is that the authors dreamed up a silly illustration. All companies face significant legal challenges, but they do not rush to put a lawyer in the corner office, probably for the reason that other challenges are even more significant or lawyers are not good managers. The exceptions to this are noteworthy (See my post of May 26, 2007 about GCs who become CEO.). It’s even more improbable that a Board of Directors would choose as its CEO a lawyer who was not the general counsel. Even deeper, which department might have been at least partially culpable for the perilous legal situation of the company?
Beyond those points, it is not to be taken for granted that when a lawyer dons the corporate crown, the law department becomes the fortunate beneficiary as the power behind the throne.