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Corporate Counsel Connect collection

June 2015 edition

Knowledge of the business is an essential trait for effective law department leadership

Alan S. Gutterman, Gutterman Law & Business

Alan S. Gutterman, Responding to the dramatic changes in both business and legal markets over the last several decades, attorneys who run corporate legal departments of any significant size have become fairly proficient at basic management skills. Today, most law departments are reasonably well managed. Yet, many general counsel have come to realize that good management alone is not enough. In an increasingly complex world where the competitive environment can change very quickly, where key attorneys can easily move to other companies or into private practice, and where internal clients are more demanding than ever before, being well managed is essential but not sufficient. Corporate law departments must also be well led. They must have leaders who can identify and drive strategies for long-term success, who can spot opportunities and take advantage of them, and who can develop and inspire others to help guide where the department and the company as a whole need to go.

Leadership theories

There is no doubt that extensive resources have been devoted to the search for "traits" and "attributes" of effective leaders, as well as characteristics of dysfunctional leaders. In fact, one of the earliest and most popular conceptions of leadership that flourished in the 19th and early 20th centuries, often referred to as the "great man" theory, assumed that certain individual characteristics, or "traits," could be found in leaders but not in nonleaders, and that those characteristics could not be developed but must be inherited. Much of the work based on this theory was conducted under the umbrella of settling debates about whether leaders were "born or made" and, to the extent that genes were not totally responsible for leadership success, what strategies could be used to teach people how to execute the behaviors thought to be associated with effective leadership.

Eventually the "great man" theory was discredited in the face of a continuous stream of new theories that had as one of their core principles the democratization of leadership opportunities. However, the "great man" theory did leave behind a keen interest in attempting to identify those individual traits that could be most tightly linked to leadership and laid the foundation for the "trait school of leadership" which held that the traits of leaders – assumed to include their capacities, motives and patterns of behavior – were different from those of nonleaders. In contrast to the "great man" theory, trait theories did not particularly care whether the leadership traits were inherited or acquired and, in fact, early suggestions about optimal traits included items that were inherited (e.g., height, weight and physique) as well as items that were dependent on experience and training (e.g., industry knowledge).

Leadership traits

Many leadership scholars lacked confidence in the research findings relating to leadership traits and, in fact, trait theories were largely abandoned for a significant period. However, Kirkpatrick and Locke argued that new research using a variety of methods had provided support for the general proposition that effective and successful leaders were "different" and that there were a handful of core traits that were extremely important contributors to, albeit not guarantors of, the success of leaders in the business world. According to Kirkpatrick and Locke, there are six traits on which leaders differ from nonleaders: drive, the desire to lead, honesty/integrity, self-confidence, cognitive ability and knowledge of the business.

Theories, traits, and GCs

All of the traits mentioned by Kirkpatrick and Locke would presumably be important for leaders of corporate law departments; however, particularly intriguing and relevant is the admonition of the researchers that effective leaders demonstrate a "high degree of knowledge about the company, industry and technical matters." Effective general counsel are privy to extensive information about their company and the industry and overall economy in which they are operating, and this specific information is invaluable to their ability to make intelligent decisions regarding strategy and operational matters within the law department. Another important benefit of relevant technical expertise is that it enables the general counsel to have a clear understanding of the concerns of other attorneys in the department and gives them credibility when they are offering advice on potential solutions to technical issues that may arise within the department. The power of expertise can be enhanced by appropriate behaviors, such as "leading by example."

For additional information and commentary relating to leadership, see the author’s materials in Business Transactions Solutions, Chapters 315-317, and contact the author directly at

About the author

Alan S. Gutterman is the founder and principal of Gutterman Law & Business, a leading provider of timely and practical legal and business information for attorneys, other professionals and executives in the form of books, online content, newsletters, programs, and training and consulting services. Mr. Gutterman has three decades of experience as a partner and senior counsel with internationally recognized law firms counseling small and large business enterprises in the areas of general corporate and securities matters, venture capital, mergers and acquisitions, international law and transactions, strategic business alliances, technology transfers and intellectual property. He has also held senior management positions with several technology-based businesses, including service as the chief legal officer of a leading international distributor of IT products headquartered in Silicon Valley and as the chief operating officer of an emerging broadband media company. His publications are available on the Legal Solutions website or at Westlaw at Business Counselor. Mr. Gutterman can be reached at