Dive Brief:
- More than six in 10 general counsel appointments at Fortune 500 companies last year were external hires, up from 52% the year prior, according to an analysis.
- The increase in outside hires came amid 66 GCs at Fortune 500 companies who were appointed in recent years leaving their posts in 2023, a figure that was up from 42 such departures two years ago.
- General counsel at the largest companies are also increasingly taking on external facing responsibilities in addition to their significant internal responsibilities, Russell Reynolds Associates’ analysis of Fortune 500 GCs found.
Dive Insight:
The growing remit of general counsel is a key factor driving the increase of external hires at large companies, according to Russell Reynolds Associates. The 61% external hire figure for 2023 was a bump up from the even split between outside and internal appointments in 2020.
The executive search firm’s analysis said that Fortune 500 GCs have six times more responsibility than any of their direct reports, which makes it challenging for internal deputies to step into legal chief roles.
“As such, companies are looking to hire seasoned, sitting GCs — the proportion of newly hired Fortune 500 GCs who already held the title of GC increased from 36% to 44% from 2022 to 2023,” the report said.
In 2022, 45 of the Fortune 500 legal chiefs held responsibilities outside of GC, company secretary and compliance, Russell Reynolds Associates found. More recently, 67 of those GCs reported having additional responsibilities.
The added external-facing responsibilities include communications, policy and public affairs.
“GCs are increasingly seen as true enterprise leaders, trusted to guide companies through the choppy waters of war, politics, inflation, reputational risk, and AI,” the report said. “The GC role is more complex today than ever before, and is certainly not for the faint of heart.”
Fortune 500 legal chiefs are also gaining internal responsibilities, according to Russell Reynolds Associates.
Examples include more GCs overseeing administrative affairs and becoming HR leaders in their companies.
“This jump points to GCs being responsible for building cultures that simultaneously balance the need for growth with compliance and integrity, and to the huge overlap between people and legal issues in many organizations,” the report said.
Additionally, more GCs are gaining oversight of sustainability and corporate and social responsibility matters.
“This is often combined with company secretary or compliance responsibilities, perhaps indicating that these companies view ESG largely as a compliance and reporting issue, which should naturally sit with other administrative and regulatory reporting,” the report said.
