Sunday, March 28, 2010
The Difference Between Being a GC and a CEO
Posted by Jeff Lipshaw
Unfortunately, I can't provide a link because the online version of today's New York Times doesn't seem to include it, but the second page of Sunday Business is the "Corner Office" interview with Debra L. Lee, the chairwoman and CEO of BET (and successor to Bob Johnson, who founded the network before it got sold to Viacom). Buried in the interview are a couple observations I found interesting, given that Ms. Lee was BET's general counsel before being appointed as the chief operating officer.
Q. Looking back, it sounds as if it was a big leap to go from general counsel to C.O.O.
A. As a general counsel, you're taught research, research, find out every case, find out every opinion, think about it. It's almost like you are a judge.
So when I went from being general counsel to C.O.O., that's the way I first approached it. Well, it doesn't work. I had to learn to make decisions quicker and follow my gut. You're not going to be able to run the numbers and come up with perfect answers.
I certainly agree with her observation about being a COO or a CEO, but I think that most COOs and CEOs would get very, very frustrated with a general counsel who couldn't either translate all of the legal stuff into something that could factor into an executive's gut-based decision, or couldn't make quick and gut-based business decisions herself that placed the legal concerns alongside the non-legal ones.
The example I give in The Venn Diagram of Business Lawyering Judgments (forthcoming, 46 Seton Hall L. Rev., Issue 1 (2011)) is the decision whether to proceed with an acquisition in which there is significant competitive overlap. The synergies arising from that overlap may well be part of the purely business decision whether the acquisition is attractive, and the analysis whether a Hart-Scott-Rodino pre-merger filing is necessary, and whether there are substantive Section 7 concerns is almost purely legal, but the decision whether the acquisition is attractive enough to merit the risk and cost of the antitrust review is one of mixed law and judgment that I believe only a "well-attuned to the business" GC is in a position to make.