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The four faces of the chief legal officer, second edition

The role of today’s CLO

An encouraging shift in chief legal officer (CLO) priorities seems to suggest an evolution in the CLO’s focus from reactive to proactive, from manager to executive leader. To be successful, a CLO may seek to master and strike the right balance between “four faces”: catalyst, strategist, guardian, and operator.

Author: Carlo Gagliardi - Managing Partner, Milano - cagagliardi@deloitte.it

Today’s chief legal officer (CLO) is multi-dimensional. In addition to being a legal tactician, today’s CLO is also a strategic thinker and a senior executive, operating at one of the highest and most impactful levels of an organization. In a 2023 survey, 81% of CLOs in the US, and 66% of CLOs globally, reported directly to the CEO.

More than half also have the corporate secretary role, 78% were responsible for compliance, 51% were responsible for risk, and more than a third were responsible for ethics (47%) and risk (44%). Increasingly, CLOs are also taking on more non-traditional areas of responsibility, including cyber and ESG/sustainability.

Thus, as their role widens, CLOs may find themselves considering how best to focus their time and efforts to navigate the increasingly complex role across an increasingly diverse set of responsibilities. To be successful, a CLO can divide their time between “four faces”: catalyst, strategist, guardian, and operator.

In this second edition of “The four faces of the chief legal officer,” we provide an update from the first edition on surveyed CLOs’ priorities, as well as how new and experienced CLOs currently spend their time and wish to spend their time.

The four faces

Catalyst

A catalyst enables competitive advantage by bringing a legal lens and the critical guidance needed to facilitate the executive leadership team’s ability to select the right path forward and set the tone at the top for the business.

Some responsibilities that may be associated with the catalyst role include:

  • Assess whether business is carried out in the right way; develop the corporate risk profile and a strong companywide compliance framework;
  • Empower the legal team to serve as trusted business advisers who are sought out to proactively help the business develop solutions;
  • Take the lead in building a strong corporate culture that is aligned with the company’s values around compliance and integrity;
  • Challenge the status quo as a change agent; and
  • Drive client satisfaction and experience with legal as a value-added service.

Strategist

As a strategist, the CLO is positioned to bring clear legal strategy which supports and enables business strategy. The CLO provides the senior executive team with legal guidance that enables achievement of growth objectives.

Some responsibilities that may be associated with the strategist role include:

  • Build strong relationships with leadership teams;
  • Build strong relationships with board members;
  • Understand the strategy and value creation levers for the business and reflect them in your legal strategy;
  • Serve as a trusted business adviser that proactively engages management and the board around strategic business issues; and
  • Anticipate and proactively develop a strategy to address changes in regulatory requirements and public policy.

Guardian

In guardian mode, the CLO guides legal and regulatory matters for the business, navigating complexity while mitigating risk. This is often the foundational responsibility for the in-house legal team.

Some responsibilities that may be associated with the guardian role include:

  • Guard corporate integrity and embody tone at the top within the legal department;
  • Understand business and compliance risk;
  • Maintain clarity between the role of the board and management;
  • Identify and remediate exposure to brand and reputation risk; and
  • Manage governance approach on regulatory and legal issues.

Operator

An operator spends time focusing on how to optimize the capabilities, talent, service levels, costs, and legal structure required to serve their business partners in an optimal manner.

Some responsibilities that may be associated with the operator role include:

  • Create leadership development and succession plans for the legal function;
  • Develop and implement key performance metrics for the legal organization and its outside counsel;
  • Identify skill and subject matter expertise gaps and develop plans to fill them; identify and implement technology solutions for the legal department;
  • Refine the legal operating model to increase effectiveness of legal services; and
  • Develop accurate forecasting and reporting of legal spend.

Final thoughts

The role of the CLO continues to grow in importance with increasing influence at the most senior levels of leadership. To be successful in the role, a CLO should learn to skillfully navigate the four faces of the CLO, focusing most of their time and effort in the catalyst and strategist roles.

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