Today’s general counsel performs many roles – counsellor, information gatekeeper during a crisis, business strategist and others at different times, writes Preeti Balwani
Abusy airport, a bustling waiting lounge and an emergency. A large client has just issued a press statement recalling certain inferior-quality products and terminating its business relationship with the product manufacturer. It was 5 pm on a Friday in New York and 2.30 am on a Saturday in Mumbai. A concerned promoter called his general counsel (GC) for help.
The words “general counsel” usually conjure up images of a modern-day Chanakya, a trusted adviser who can be relied upon when there is a crisis. Pop-culture characters like Lord Varys from Game of Thrones might have been influenced by the modern-day GC, or perhaps life mimics art?
This, then, begs the question: What is the role of a GC? Historically, a GC may have been somewhat of a maverick who advised on a wide variety of risks not only related to regulatory compliance and legal issues. A GC was meant to be an adviser and their primary role was to protect the interests of the kingdom/corporation. In current times, when data and privacy breaches are par for the course, the role of the GC goes much beyond the lawyer on a payroll.
CRISIS COMMUNICATIONS MANAGER
During a crisis, the GC must get into the driver’s seat. They are not only responsible for internal communication, but what is presented externally to regulators, media and other stakeholders. They must ensure that there is no rumour-mongering or leakage of confidential information in difficult times.
Section 126 of the Indian Evidence Act, 1872, protects professional communications to barristers, pleaders or vakils (lawyers) from being disclosed. While in the US, the Federal Rules of Evidence cover lawyer-client privilege, however, the specific state law would prevail in the matter. In some cases, the privilege would extend to communications between the GC and the organization. To retain privilege in litigation-related work product, an in-house counsel should inform all relevant stakeholders to make work product requests in writing to the GC, and clearly state the purpose of the request.
In the above-mentioned case involving the product recall, the litigation involved multiple jurisdictions, various legislation and different regulators. The parent was a listed entity in one jurisdiction doing business in another, and sued by complainants in a third jurisdiction. The key lesson from this crisis was to maintain consistency in all disclosures. What would be disclosed to the Securities and Exchange Board of India would also be public information in a class action lawsuit in various states in the US, which the GC should be mindful of.
Unlike in the past, when a lawyer was only called to clean up a mess, a GC is today part of the executive leadership team and weighs in on every business decision. There is a significant shift in perception of what an in-house counsel can contribute to the decision-making process of a business. The GC needs to understand the company strategy or business plan to effectively deliver in the role. As a business leader, they must bear in mind that their every decision will have a financial impact. The more GCs act as a key strategist, the higher their perceived value will be.
PREETI BALWANI is the general counsel of Kraft Heinz in India and heads the legal, compliance and regulatory affairs department for the company’s Indian business unit. The views expressed in this article are personal and those of the author.