Transforming Legal Departments: The Strategic and Innovative Role of General Counsels in Modern Business

Leaders League: How can legal departments go about creating value for their companies?

Anne De Wolf: The role of the general counsel has evolved into a strategic business partner, involved early in business operations to provide proactive advice, seek alternatives, solve problems, and, most importantly, identify, assess and mitigate legal risks. They act as business enablers and innovators. Their advice is concrete, practical, pragmatic, and creative, always business-oriented (thinking outside the box). This is bespoke legal advice without excessive theory.

The general counsel supports management, considers financial aspects, compliance, and sustainability, and must earn their trust in doing so. To be a strategic partner, the general counsel must have a thorough understanding of the company, its products, market and sector. They need a global vision of the societal context in which their company operates, the resulting challenges, and the ability to detect emerging business risks and opportunities. They have become indispensable, akin to a CFO, CHRO, etc.

How can legal departments contribute to their firm's ability to meet ESG requirements?

The general counsel can add value to sustainability efforts. Numerous upcoming regulations concerning ESG (Corporate Sustainability Reporting Directive) will require companies to communicate clearly and transparently about their efforts, such as diversity in governance. The general counsel proactively considers how these regulations might impact business management. They provide a holistic vision that goes beyond legal aspects.

They must inform management bodies about their responsibilities and numerous obligations and support them by providing the tools needed to meet ESG requirements. There is a shift from compliance-focused governance to purpose-driven governance, more centered on a strategy of sustainable value creation: diversity & inclusion, supply chain, cybersecurity.

How do legal departments provide agility to make the best decisions?

The general counsel must find a balance between legal security and business agility. They must manage risks rather than avoid them, balancing caution and boldness. With increasing regulations, European and international legislation, often very complex, they must conduct risk assessments. Risk management, therefore, has become a lever for performance and innovation. It is crucial for the general counsel to be involved from the beginning of commercial operations and contract conclusion, throughout the contract lifecycle. Timely advice can prevent problems and disputes from arising. Above all, they must be a business enabler.

How can artificial intelligence improve the work of legal departments?

AI impacts legal processes in an evolutionary rather than revolutionary manner. It frees the legal department from repetitive tasks through automation, allowing them to focus on more complex and strategic cases with high added value. AI is data-based, and the challenge is to input the right data into specific systems and always cross-check when working with OpenAI. The general counsel’s role is primarily to develop a policy so that everyone inside and outside the legal department knows what is possible and what is not. However, AI remains an assistive tool and will never replace a lawyer. Law is not an exact science: it requires interpretation, evaluation, creativity, insight, ethics, etc.

What concerns general counsel above all else?

Increasing legislation imposes more responsibilities on management and companies, and this is a real challenge for general counsel. Besides the abundance of regulations and the realization that one cannot know everything, process management is a major concern. They are responsible for managing their team and achieving objectives within a defined timeframe: hence the need to simplify and digitalize.

There are IT solutions to centralize information, contract management, corporate housekeeping, automate repetitive tasks, and secure processes. General counsel often have client portals to work with lawyers, internal and external clients, and share documents where everyone can track the status of their case. These collaborative tools for working together are very useful.

Interview by Pierre Marteel of Leaders League