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From general counsel to corporate boss?

Straits Times
17 May 2018
Grace Leong

They were once the heads of the 'back-room' legal community of a private company's operations. Now, amid widening skill sets, some in-house lawyers are eyeing a seat at the boardroom table.

Corruption scandals. Growing anxiety over fake news. The frequency and severity of data breaches and cybercrime.

When it comes to reputation and risk management, the boards of local corporates have much to worry about these days.

And in turn, their teams of in-house lawyers have a lot more on their plate than used to be the case.

Working in-house for a corporate organisation used to be seen as an option for those who couldn't quite make the grade as partner in a private legal practice.

But with the growing emphasis on compliance and ethics, as well as the ongoing push to promote Singapore as a leading legal and financial hub, the role of local corporate counsel is changing and taking on new significance in the legal industry.

Rather than merely acting as a call centre for handling a company's legal and compliance-related matters, the type of legal work they handle has become more complex and now includes risk management, public policy and mergers and acquisitions (M&A).

As a result, efforts to "right-size" their skill sets have intensified.

In late December last year, a new competency framework was launched to raise the standards of some 2,000 local corporate or in-house counsel here. It included a beefed-up code of conduct and prescribed various technical, business and future-ready skills required to enable them to progress within the organisation.

But as the role of in-house counsel evolves, is there room at the boardroom table for the more business-savvy among them?


Today, general counsel - who typically head the firm's corporate legal department - are more likely to have management qualifications compared with their predecessors.

In addition to legal skills, they must also have acquired financial acumen and other skill sets required in senior management roles, noted G&L Chartered Business Consultants' executive director & head of legal Roy Goh. He listed these as including proficiency in risk mitigation, corporate governance, and marketing and business development. How they use that knowledge to provide practical advice for their organisation will be critical to them making the leap to business partner.

A new study released last month by the Singapore Corporate Counsel Association and global law firm CMS found that general counsel are more ambitious than ever to take on senior leadership roles in their organisations. At least one in five aspires to become chief executive or chief operating officer, the study found.


But while a number of senior in-house counsel in Singapore are already members of their firm's senior management teams, making the cut to become a member of the board of directors, or chief executive officer (CEO) or chief operating officer is a separate matter.

RGE head of legal Rose Kong believes it is difficult for many of them to get to the corner office because there is a "strongly held view by management that legal is just a support function, and therefore a cost centre and back office".

Many corporate counsel here typically get involved only after the commercial terms of a deal are worked out. This is in contrast to the practice in many multinational companies in the United States and Europe, where "there is better realisation that having in-house lawyers help structure the deal from the outset can save a fair bit of pain later", veteran lawyer Tan Cheng Han noted.

That is why more in-house lawyers there make it to the C-suite, "as they are seen as integral members of the company rather than a distinct cost centre", said Professor Tan, chairman of the Centre for Law and Business at the National University of Singapore Faculty of Law.

The US market is more mature than any other in terms of its acceptance of lawyers in the C-suite, Singapore Corporate Counsel Association (SCCA) president Wong Taur Jiun noted.

"A common situation in which a legal counsel becomes CEO is where the company is embroiled in a major regulatory issue or a major lawsuit - one on which the fate of the company hangs. That is when the value of the lawyer becomes most apparent to the board of directors," he explained.

Still, there is a growing number of able and ambitious corporate counsel moving up the career ladder in Singapore, and the biggest boost to the status of the general counsel has been the rapid pace of innovation across industries.

As compliance and risk management become greater corporate priorities, the general counsel's skill set and experience become more directly relevant to the CEO's job, said Mr Jonathan Warne, CMS' head of litigation and arbitration.

The legal complexities being introduced by new technologies are having the same effect. The more the general counsel becomes focused on enterprise risk management, the closer he or she gets to the C-suite, he said.

For instance, the concept of "fake news" law never existed until five years ago, and now countries are passing anti-fake news laws. These remain untested, and businesses still expect their corporate counsel to navigate the maze, said Mr Andrew Ong, head of legal & compliance, Asia-Pacific, for Finnish elevator company Kone.

He also noted how a growing number of general counsel are given dual roles as country manager - responsible for the firm's balance sheet in a particular country - in addition to legal responsibilities. "In-house lawyers who can read financials have an edge to get to the corner office," he said.

Firms that are listed, or have to work with major regulatory or reputational risk, also tend to be more receptive to having the general counsel as senior executive. Take Hong Kong-listed Razer Inc, a maker of computer accessories for games - co-founded by Singaporean CEO Tan Min-Liang - which is dual-headquartered in Singapore and San Francisco.

Being a key member of a senior management team that builds a global business can be highly satisfying and offers opportunities that are difficult for a lawyer in private practice to find, said Mr Choo Wei Pin, Razer's senior vice-president of corporate development, and general counsel.

Mr Choo, who heads M&A execution and zVentures, Razer's corporate ventures arm, believes it is just a matter of time before more general counsel make the board as a growing number of them are taking on additional non-legal responsibilities.

"Razer's CEO worked as a lawyer before founding Razer, and is hugely supportive of corporate counsel taking on additional roles and responsibilities," he added.

At Amazon, the legal team is encouraged to advocate for customers and facilitate resolution of any issue by working with other departments company-wide, said Ms Lynette Ooi, corporate counsel for Amazon Asia-Pacific Resources.

"We've found that this approach builds trust between the legal and business teams, and in-house counsel who perform in this way will be in a better position to transition to a senior management role if they wish," she said.


The greatest challenge facing corporate counsel may be that of reconciling the "dual and at times conflicting" roles of being gatekeeper and strategic adviser to the company, Judge of Appeal Steven Chong pointed out at the launch of the SCCA's study last month. "And whenever the two are in seeming conflict, the former must prevail," he said.

He pointed to the collapse of corporate giants Enron and Worldcom as largely precipitated by "a tendency among general counsel during that period to give undue priority to business objectives rather than legal imperatives".

The gatekeeper role has taken on greater importance in the wake of the corruption scandal involving Singapore-listed Keppel Corp's offshore marine unit.

Keppel Offshore & Marine was fined US$422.2 million (S$566 million) late last year over US$55 million in bribes given between 2001 and 2014 to officials of a Brazilian state-run oil company to secure contracts there.

A former corporate lawyer with Keppel Offshore's legal department pleaded guilty in August last year to drafting contracts used to make bribe payments.

Jeffery Shiu Chow, a senior lawyer with the firm for over 25 years, said he drafted contracts used to pay bribes to Brazilian officials after "discussing the economic terms" with his seniors at Keppel and "acting in agreement" with them and others.

Many corporate counsel see the Keppel episode as a reminder to be vigilant to signs that their own company may be drifting into questionable territory, and to be effective gatekeepers.

"If no one else is willing to shut the gate, it is up to the general counsel to do it, even if it means losing his job," Mr Ong said.

As the number of corporate lawyers grows, ensuring that a meaningful and rewarding career progression remains possible for them is a key issue.

In order to have the standing to make a claim for bigger roles in senior management, their skill sets must be right-sized first. Having a senior management role means they have to be competent in areas of business such as operations and project management, finance budgeting and business strategy.

The challenge is whether corporate counsel can themselves lead the charge in changing the mindset that their role is not just that of a cost centre, and that they can take on a strategic management role, if they so choose.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.