Are general counsel a "necessary evil"?

GCs have had a tough few days. Hewlett-Packard's GC, Ann Baskins, resigned last week in the middle of the company's "pretexting" scandal. (See last week's post on H-P's conduct.) And in today's Wall Street Journal, Ashby Jones writes about the lack of respect some companies — and outside counsel — have for GCs. Jones quotes an Orrick Herrington partner as saying that other executives often regard GCs "as a necessary evil," and that some outside counsel ignore them. The article points out that because the GC's office generates no revenue, it is frequently viewed "as a mere cost center."

I was surprised by the pie chart accompanying the article that revealed that 26% of GCs report to someone other than the CEO. Even more surprising is the number of Silicon Valley companies that have no general counsel at all.

As outside employment counsel for companies, I've worked closely with many inside counsel. I'm constantly amazed at how many different balls they can juggle at once. Where I only need to know about employment law, they're constantly handling issues from all kinds of practice areas — not an easy task. The best general counsel I know are those who put their company's business goals first, and look for a way to reach them in the context of the law. They work with their outside specialists to solve a particular business problem. They are not just cost centers, or a "necessary evil." A good general counsel can save his or her company from ruin.