Becoming the Calm Risk Taker: Attributes for Success in Today's New Legal Environment
The role of the legal executive has changed dramatically over the last decade. Once exclusively responsible for core tasks such as managing outside counsel, responding to business requests for legal support and preparing board materials, today’s legal leaders also must take an enterprise view of risk and work with the business to evaluate commercial decisions and advance corporate strategy.
As a result of these advancements, academics, consultants and other experts have expounded upon the skills and knowledge required for success in this new environment. For example, legal executives must better understand the business, be more globally minded, and play a stronger general business leadership role.
To help legal executives understand which requirements truly matter most, Russell Reynolds Associates analyzed our database of 3,000 executive assessments. (These tests measure a number of competencies, such as relationship skills, communication skills, decision-making approaches, etc.). Based on our knowledge of which assessed legal executives have performed successfully in their roles—and those who have fared less favorably—we were able to isolate the factors that link to effectiveness and compare the top legal leaders with the rest. The results likely will surprise you.
- Legal executives differ little from their non-legal counterparts. This finding challenges many of the common misperceptions surrounding corporate lawyers—i.e., that they are limited to their technical expertise, fail to fully understand the business, are not proactive, etc. On the contrary, our findings show that the average legal executive is on par with his or her peers on most attributes such as being decisive, setting strategy, executing for results, leading teams, building relationships and using influence, learning and thinking and motivating. Organizations looking to hire legal talent should keep these factors in mind lest they set the quality bar too low (Figure 1, Letter A).
- The most successful legal executives exhibit what we call low “excitability.” In other words, they are calm under pressure, especially during a crisis. They think on their feet, and their guidance is measured and balanced. The best legal executives are 18% less excitable than the average legal executive and 20% less excitable than the average business executive (Figure 1, Letter B).
- The most successful legal executives exhibit what we call high “mischievousness.” Far from allowing legal to be the department of “no,” these leaders consider and devise unconventional solutions and are able to act on partial information to make strategic decisions. In other words, contrary to conventional wisdom (and lawyer jokes) the best legal executives go well beyond spotting legal issues to helping the business actually take risks and find creative solutions. The best legal executives are 11% more willing to take risks than the average legal executive, and they are almost as likely to take risks as the typical business executive (Figure 1, Letter C).
Legal Executive Profiles
- Taken together, our findings suggest that legal executives should strive to become what we call the “calm risk taker.” These individuals keep a cool head under pressure and proactively push the business to take (informed) chances. Legal leaders who effectively espouse these competencies deliver significant value to the business—well beyond the returns provided by high-quality legal advice and risk mitigation. Calm risk takers are collected, keen strategists, hungry for opportunities to help drive the business forward.
To help lawyers become calm risk takers, we have identified below a sampling of on-the-job experiences for decreasing excitability and increasing mischievousness (Figure 2). This information should be useful for designing and implementing individual development plans and managing succession for the general counsel.
As legal executives face increasing expectations and changing business requirements, these professionals must determine which skills and abilities will best carry them forward. We hope that the findings from this study provide a useful guide for identifying and building the capabilities required to succeed in the new era of corporate law.