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How the General Counsel and CFO Should Work Together

By Jonathan R. Tung, Esq. on August 02, 2016 | Last updated on March 21, 2019

These days, being the GC of a company isn't quite the cush job everyone imagined it to be. As commerce has gotten increasingly global, legal teams that operate on the company dime are finding themselves busier than they had ever anticipated. The world waits for no one.

That means that in-house counsel should really leverage power at the top. And since the CEO is often gone or aloof, the next best buddy a general counsel can have is the CFO.

Guardians at the Gate

In today's media-driven culture, it's often the CEO or founder that gets all the press and all the glory. Practically everyone knows the founders of Apple, Gawker, Theranos, etc. Can anyone name those companies' GCs or CFOs?

But the plain truth is that the CFO and GC are the company's best insurance against both legal and financial disaster. If the CEO rallies up his employee troops to take the company in some direction, it's up the GC and to conduct due diligence and communicate his legal concerns to the CFO and CEO. At the very least, the CFO holds the purse strings and nothing big can be executed without proper vetting.

And Valiant Few

Very often, the execution falls just short of "visionary" because of the legal realities that lawyers and financiers must work with. The most painless way for GCs and CFOs to integrate their efforts involves finding those high risk, high value areas, flagging them, and presenting them to the other execs for review and feedback.

Before the executive arms can get too excited, a compliance review should already be underway. On the CFO's side, costs should already be calculated. Truly great companies integrate the legal and finance team together so that costs can be calculated in that scenario when it all "hits the fan."

Dual Hats

The business community knew it was going to happen sooner or later and it looks like that time is now. Over the last few years, the GC has steadily assumed greater and greater influence at the top ranks in many companies, almost all but supplanting the needs for other executives. Not only is the GC now expected to analyze for compliance, she is now also expected to help give input in affirmative business decisions. Sounds really neat, but it raises a host of ethics problems. But in the meantime, it looks like the ABA rules will have to bend to fit the new realities. GCs and other in-house counsel don't look like they're about to revolt against new responsibilities anytime soon. And with rising salaries, why would they?

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