Lawyers can become very powerful people within technology corporations. Most CEOs won’t make a move without first consulting their general counsel or other legal adviser. But the general counsel seldom rises to the CEO spot. Why is that? What’s preventing it? How can corporate attorneys overcome these obstacles and rise to the center of power? By gaining practical line experience?
As specialists with specific responsibility for safeguarding the legal interests of the enterprise, some corporate attorneys feel they suffer from pigeonholing. In addition, real and perceived vertical silos within which they function may prevent them from amassing necessary cross-functional experience.
“General counsels focus on risk mitigation and, therefore, are rarely in position to provide ideas or advice with regard to areas that potential CEOs are judged on like sales, market strategy or product development,” says Alex Zapesochny, president and CEO, iCardiac Technologies, a medical technology company, and former general counsel at a midsize tech company. “Typecasting occurs with attorneys. Many corporate counsels work in large companies where each department—including legal—has very specific responsibilities and boundaries. Therefore, it’s harder for attorneys to get involved with key business, non-legal, initiatives that could demonstrate C-level potential.”
Getting Training for Business
While many practicing corporate attorneys may not find significant opportunities inside the companies where they work now, some lawyers feel that the training landscape is changing. And the formal education that law students receive augurs well for the future.
“The path from general counsel to CEO is becoming a lot more common, and with good reason,” says Sarah Rathke, partner, Squire Patton Boggs (US) LLP. “As regulations, operations and international trends increasingly intersect, business lawyers often find they have the right training to lead their companies.”
For example, Rathke points out that in 2012, fintech giant Fannie Mae named its general counsel, Timothy Mayopoulos, CEO. According to his bio, Mayopoulos served in numerous management capacities at Deutsche Bank, Credit Suisse and Donaldson, Lufkin & Jenrette before becoming general counsel at Bank of America. In addition, she cites an ABA Journal article from 2010, that some law schools—most notably Southern Methodist University—have become known for their business law curriculum, which has produced CEOs at Kroger, State Farm and other Fortune 50 companies.
Mentoring and Prepping for Opportunity
As the apocryphal Seneca saying goes, “Luck is what happens when preparation meets opportunity.” While the origin of that sentiment remains dubious, its sagacity exists immutable down the centuries. So it goes without saying that an attorney desiring a more general management oriented career should seek out the right mentor to get ready for the chance when—and if—it comes.
“The main issue that most corporate lawyers face is combining business leadership with legal prowess,” says Wendi Weiner, attorney, certified executive resume writer and career transition coach. “The company has to be willing to expand and offer executive partnership to the attorney. But not all attorneys have capacity for executive leadership, which requires skills beyond savvy legal knowledge about business entities.”
For example, Weiner relates that she recently worked with general counsel of a multi-million dollar hotel chain. Over a decade-plus, this attorney rose from assistant counsel to deputy general counsel to the joint role of vice president.
“This only occurred because there was a restructuring of the company’s executive leadership, and the deputy general counsel had already handled many of the business structures involved during the restructuring,” Weiner says. “Through proven experience, the expansion was made. Most of the time, however, companies see executive leadership as vastly different from legal advisory.”
Venture Capitalists and the Lawyer CEO
While operational experience remains important for attorneys aspiring to the corner office, that’s not the only attribute for successfully moving up the corporate ladder. Especially, in the technology sector where venture capitalists (VCs) and their term-sheet startup investments seem to exist around every corner. An attorney well versed in the intricacies of VCs can quickly find herself on the inside of the boardroom glass looking out.
“I was brought into a CEO position of a VC-funded and founded technology startup after having been the director of legal and public affairs at a previous company in the same industry,” says Anne Mitchell, attorney-at-law and CEO and president, SuretyMail, an email reputation certification and inbox delivery solution. “Lawyers generally have a very different set of business philosophies—how things should be done—than what a board or other decision makers are looking for in the C-suite.”
For example, typically the board has to satisfy investors and others who have a financial stake in the company, according to Mitchell. “This often means balancing those interests against risk and liability factors against which a lawyer would caution,” she says.
Indeed, it is not unheard of for boards to work with counsel and then bring her or him into the CEO slot. Especially outside counsel, who may have experience within the industry which the technology company conducts itself. For example, in February 2016, Alkemy X, a creative media company, appointed as CEO its outside counsel Justin Wineburgh, who had served in that function since 2005.
“With my breadth of experience in the entertainment industry and my deep understanding of Alkemy X, the company board selected me to steward the company’s transformation and growth,” Wineburgh says. “My trusted relationship with the board and key employees has enabled us to seamlessly and cohesively establish a strategic vision for Alkemy X and its plan for growth—with disciplined execution and results.”
In order to make it to the CEO space, Wineburgh feels that corporate counsels need to shed their inculcated risk averseness and embrace their visionary sides. Evolving media and technology companies will need these qualities in abundance as they seek to balance risk and manage a changing industry landscape, summarizing Wineburgh. If an attorney can provide not only legal analysis but also practical solutions to real business problems, a board will search her out for the chief executive position, he says.
Mastering the Technology
In the final analysis, technology companies differ from corporations in highly regulated industries such as financial services. Companies like Goldman Sachs and American Express have more potential to elevate a general counsel to CEO than IP router maker Cisco or other companies with many patents and trade secrets, according to a former general counsel.
“Managers and executives in (financial services) companies need to understand and integrate regulations and laws to develop strategy, create and develop markets and manage risk,” says Steven Shapiro, partner, Krasnow Saunders Kaplan & Beninati LLP. “In contrast, technology companies are less regulated. Their growth is driven by product development, which is technology driven.”
For example, software and hardware developers of new or add-on technologies are less likely lawyers than technologists, he says.
“To progress from lawyer to CEO you would have to master the technology and be able to talk about it with those who developed it,” Shapiro says, “and have a much better marketing sense than most lawyers and less of a risk-averse mentality.”
And it might help if the tech company was either more mature or in a more mature sector of technology, according to Shapiro.