Being a CEO isn't as cushy a job as it used to be. According to a recent study by Booz Allen Hamilton, the rate of CEO dismissals has increased 170 percent since 1995, and the average CEO tenure has dropped to only 7.6 years. The situation is unlikely to change any time soon; the shaky economy, public skepticism of corporate America and increased regulatory scrutiny are bound to keep top executives in heightened peril of dismissal for months, or years, to come.
With memories of Jeff Skilling and his ilk still fresh in their minds, CEOs are relying more than ever on the advice and guidance of their general counsel.
One goal that most panelists agreed was top of mind for the CEOs at their companies was controlling costs. The results of the Corporate Legal Times/Dickstein Shapiro Morin & Oshinsky Survey of CEOs ["Back To Business" p.38, October 2004] confirm that belief. Thirty-two percent of CEOs indicated that reducing costs was the most important way the general counsel could improve the legal department, and 83 percent said it was important for their GC to have a firm grasp of financial issues.
Each year, she created a presentation for upper management that measured her department's work against benchmarks--for example, how much other companies in the energy industry spent on regulatory issues that year, or how much companies with similar revenues spent on litigation. She also highlighted specific opportunities the legal department identified and acted on--such as a strategic acquisition or winning a potentially costly case on summary judgment. She says top executives responded favorably to the presentations because they offered quantifiable examples of the savings the company realized as a direct result of the legal department's work.
"This gives executives a sound bite to take away," she said. "We give specific examples of when legal brought real value to the bottom line."