Roles & Relationships
Former General Counsel (GC) and Senior Vice President (SVP) of Illinois Tool Works (ITW) and current GC and SVP of Ingersoll Rand, Maria Green has invested a lot in understanding the most effective way for a GC to fulfill the role of business partner as well as act as legal counsel. “They don’t call you a General Counsel for nothing,” Green says. “You’re truly a generalist.” What that means is that you must draw on the areas of expertise that you developed earlier in your career, but you must also expand beyond that.
“You don’t need to be an expert in everything, but you need to know enough about everything to give a high-level response to a CEO or senior executive [who has approached you for advice].”
Business Knowledge Critical for Role
Green initially joined the team at ITW as an M&A lawyer. She felt that helped prepare her to make the transition to being a part of the Executive Leadership Team because of her exposure to the business world that came from negotiating deals. “ITW was very interested in internal succession,” Green says, and so she was the beneficiary of company-specific on-the-job training. To be successful as a GC, Green says you have to have a “good grounding in the financial aspects of the business. You need to know how to read a P&L report, a statement of earnings report [and so on], and understand operating and variable margins [for example].”
That’s one reason why she believes that it’s imperative for a GC to cultivate a good relationship with the CFO. “And, with the CFO, there are so many disclosure issues, financial statement issues, reputation and risk issues…which makes it really important that the GC and the CFO are aligned. The CFO’s issues overlap into legal areas,” Green says. “You need to have the ear of the CFO and the ability to have a good dialogue, so when you give advice, the CFO will listen.”
Metrics Can Help Strategy, but Aren’t Conclusive
When Green made the shift from ITW to Ingersoll Rand a year ago, there were significant differences in market caps and the number of lawyers in her departments.
“Initially I thought, ‘Oh, there are more lawyers here, and there’s an opportunity for consolidation,’” Green says. But she had to look beyond those metrics and came to understand that Ingersoll Rand’s business model was significantly different. For example, at Ingersoll Rand, “we have lawyers who are embedded in the business,” which was not the case at ITW. “You have to understand the business model before you make assumptions about how a legal department should operate,” she says.
“I’m always looking for ways to be more efficient. Looking at metrics, [such as] understanding contracts we reviewed, how many pieces of litigation we had and the results—that’s all useful, but it doesn’t necessarily guide where your focus should be going forward,” Green says. Instead, she says that you must “understand what the enterprise is trying to accomplish and make decisions around how to allocate resources” based on that. “Look at the things that will be most accretive in terms of raising revenue and expanding margins, then focus resources there.”
Crusade for Efficiency
“Like every GC, I’m on a crusade to not so much cut our outside counsel costs, but to ensure we’re getting the most efficient service,” Green says. The key to that is effective communication. “You need to partner with outside counsel to understand what you’re up against and what it’s going to take to get to the desired result.”
Though it’s impossible to definitively forecast the outcome and strategy, Green says that past experience should act as a predictor for most matters. “Don’t get surprised,” she says. “Do an early case assessment when you assign counsel. Determine if it’s a case of principle where we’ll fight to the end or a distraction that requires expediency. What’s our goal and how do we get there?” Often, litigators immediately “start taking discovery and thinking about what they’re going to do at trial—and maybe that’s not where we want to be.” Communication to understand the end goal will eliminate unnecessary costs.
Experience comes into play for billing, too. “If you’re the expert, you should be able to tell me, based on your experience, the likelihood of one outcome or another and what it is going to cost for each phase of litigation to get to that outcome,” she says. Staying in “constant contact with outside counsel and viewing the relationship as a partnership with shared risks” helps minimize billing surprises.
Business Advice vs. Legal Advice
Green says that GCs act in an advisory capacity in two ways and that there “really needs to be a clear distinction in a GC’s mind when giving business advice versus legal advice.” She prefaces her advice by labeling it—literally saying “Here’s my business advice,” or “Here’s my legal advice,” so there’s no confusion. “It’s important for us to ensure that when it’s not purely legal advice that we’re giving, business people understand that.” That way, when a lawyer in her department gives legal advice, business people understand that they need to follow it.
She cites the example of the Foreign Corrupt Practices Act (FCPA) as something that is imperative for business people to understand as critical legal advice. “You can’t get down to zero risk on FCPA because if someone goes off the rails and violates it, the actions of a bad actor will be attributed to the company.” She says that it’s important to set the tone at the top. “You can mitigate the risk by creating an environment where people understand that kickbacks, bribes, illegal or unethical activity won’t be tolerated.”
Green’s experience has helped her to understand that communication and clarity are of the utmost importance when it comes to a great many issues a GC might face. Her analysis and thoughtful approach allows her to be an effective advisor—whether she’s dispensing business or legal advice.
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