Complexities of having both regional general counsel and business unit general counsel

The new company general counsel at Siemens, the engineering and technology giant, significantly restructured the sprawling legal function. As reported in Legal Week, April 3, 2008, Peter Solmssen appointed general counsel for each of the company’s corporate, energy, industry and healthcare groups as well as regional counsel for the Americas, Europe, CIS and cross-sector businesses. The company is recruiting a general counsel for Asia, Australia and the Middle East.

This marks the first time the direct reports to the global general counsel have these responsibilities. It is also a clear example of matrix reporting (See my posts of Aug. 27, 2005: “double solid line matrix”; Feb. 15, 2006: the bane of combining reports; June 24, 2007: Cadbury Schweppes; and May 21, 2006: business lawyers and legal specialists.).

On a different topic, Solmssen issued a statement about the appointments that said “The [new] general counsels will not just give legal advice; they will have a formative role and decision-making function in business operations. Their responsibilities in this key position will go considerably beyond merely identifying risks.”

It is disappointing that in 2008 he even needs to say that a general counsel – a synecdoche for the legal department – should go beyond “merely identifying risks.”