May 25, 2021
Three Keys to Succeeding as Portfolio Company General Counsel
The general counsel plays an often-underappreciated role in helping portfolio companies drive value. Whether navigating complex ownership dynamics, human capital considerations or regulatory hurdles, or executing on acquisitions, divestitures and/or exit strategies, the general counsel can play a strategic role at the leadership table.
Still, in many portfolio companies, the general counsel is not a member of the executive leadership team. Many portfolio companies do not have a general counsel at all, opting instead to leverage junior or adjacent resources, or, more frequently, outsourcing all legal work to outside counsel. Since private equity firms are focused on value creation, often within a compressed time frame, it is unsurprising that sponsors often think of CEOs, CFOs and COOs as more critical recruits than general counsel.
In our first article about the job, we looked at what circumstances are most important for private equity portfolio companies to have a strong general counsel on their leadership teams. In this piece, we look at the attributes of success for portfolio company general counsel.
The Attributes of a Successful Portfolio Company General Counsel
General counsel at a portfolio company is a uniquely challenging role. From our experience, the most successful are change agents with exceptional leadership and executive communication skills — who also possess business acumen and a hands-on orientation focused on value creation and business enablement, whether offensive or defensive.
Below are some of the key attributes:
- Business acumen. Private equity owners are looking for bottom-line results, and they expect the same from their general counsel. Ideas grounded in an understanding of what the business needs, and backed by strong data, will have a much better chance of being heard.
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Executive communication. Private equity firms almost always make important changes to the business, and the general counsel must be adept at managing the often-delicate conversations he/she will be privy to and have the confidence and gravitas to simplify issues and speak in practical, non-political terms.
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Breadth and hands-on orientation. The legal function, like others inside of PE-backed companies, will likely be smaller than you might find in a large public company. The successful general counsel needs to be a quick study and be adept at mastering a broad portfolio, often with minimal resources. A wide range of skills including M&A, litigation, employment, regulatory and IP will often be relevant, depending on the context.
In dozens of assignments with private equity firms over the last few years, Spencer Stuart’s Legal, Compliance & Regulatory Practice — all former practicing attorneys, with firsthand understanding of the demands of legal roles today — has helped find strong general counsel to address portfolio companies’ unique needs. And as private equity continues to expand its impact across the globe, these general counsel will be key players in creating value and the best outcomes for portfolio companies and their private equity owners.