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General Counsel as Business Advisors in the Balkans

General Counsel as Business Advisors in the Balkans

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In addition to their traditional role guiding companies through legal and regulatory waters and managing disputes, General Counsels are increasingly called upon to provide input on strategic matters. An expert panel at the second annual Balkan GC Summit considered how this change in the nature of the General Counsel role is manifesting itself in the countries of the former Yugoslavia.

The Changing Role of the GC

Milica Milekic, Director Legal Affairs Non-EU at Swixx Biopharma, described a slow but a steady shift over the past ten years in the way people approach her department. According to her, there is now a proactive element to the legal function. “The question we’re getting asked,” she said, “is ‘can we do X so that we are protected legally,’” as opposed to thinking about lawyer involvement as an afterthought. Although she described herself as being “quite happy about this shift,” she noted that it means senior in-house counsel are now required to know a great deal more about their company’s business than before to be able to provide the necessary feedback.

Iva Miscevic Leskovec, Head of Legal & Human Resources at Fructal, agreed that “for the past three years GCs have been bringing more to the table than just legal expertise,” and that being a good “risk manager” is now a critical part of the GC role. As a result, she said, “the first thing a GC needs to learn is ‘how to say ‘no’  to management; how to speak the language of the executives.”

Milekic also suggested that this change meant that soft skills, including the ability to communicate critical legal considerations to non-legal colleagues effectively, were often under-valued. “With many of your colleagues in a big company not coming from a legal background, you need to be able to translate legal to them and communicate clearly,” she said, noting that one benefit of the skill is encouraging non-legal team members to feel comfortable approaching the GC for consultation and advice.

Sonja Kovac, Head of Legal at Heineken Serbia, agreed that “the landscape we’re working in is changing, and changing fast.” According to her, the next generations of legal professionals will be more “spread out, and more fast-paced.” For the time being, however, the fact that new responsibilities are being added to the GC role reflects a lack of consensus about what exactly that role is in the first place. She said that, especially in larger companies, lawyers are “mostly left to themselves to define their own role,” describing that as a particularly challenging element of the job.

Thus, Kovac added, a GC is, properly understood, “by definition much more than a lawyer,” and that professionals in the role need to be both competent and organizationally savvy. “The legal function is being pushed out of the comfort zone, and your role needs to shift to handle both the external counsel and the manager.” 

Are These Changes Welcome?

Miljan Mimic, the General Counsel of Meridian Balkans, insisted that the multi-faceted nature of the GC role is one of its most attractive aspects. “When working in a big law firm you don’t see the business side of it,” he said. “You just focus on the issue at hand and try to find a solution for it.” Working in-house – especially in a smaller company – lawyers can sit down with managers almost daily, he explained, allowing them to provide input on important business decisions ab initio . “You understand way better the drive behind certain business decisions and transactions,” he said, adding that, as it means the company can avoid bringing the lawyers up to speed later and correcting mistakes, ultimately saves significant amounts of both money and time.

Of course, there may be a downside to this expansion as well. “It’s easy to lose perspective because business goals can get ahead of you,” explained Mimic, “which is why credit must be given to external counsel as well for sometimes keeping companies in check.” Still, he insisted that full immersion in the company’s business allows a GC to “better understand a deal or a transaction and guide it in the right direction.”

One of the most difficult elements of the newly-expanded General Counsel role is the occasional need referred to by Leskovic to say “no” to a management board proposal. Sonja Kovac noted that doing this isn’t simple, and is best done by “following up that ‘no’ with a ‘but’ – and providing some reasons and explanations to the board.” Providing sound reasons for your positions adds to the lawyer’s credibility, she said, describing it as a crucial part of “stakeholder management.” 

“From my experience, people don’t always ask the right questions, so you have to understand the reasoning behind their inquiries in order to be able to give them the right answer,” Kovac continued. In this way, she said, a GC is able to “speak the same language as his or her colleagues.”

And while few challenge the idea that lawyers need to be business advisors as well, there should be sensitivity to the occasions where those two come into conflict. Miljan Mimic insisted that “one needs to draw a line between the position of a GC and an advisor.” According to him, “some ethical standards are needed to help you see this line – and you must not cross it,” but he conceded that “finding this line is a difficult task.” 

Milica Milekic noted that “colleagues seem less willing to challenge the opinion of external counsel,” which is why communication skills are so valuable. “It’s a two-way exchange between us and the business, so it’s very important to know how to talk to our colleagues,” she said. 

How the Changes to the GC Role are Felt in the Former Yugoslavia

Of course, with all the regional similarities between ex-Yugoslav countries, the region itself is, in some ways, different from the rest of Europe. Still, Simic Nenezic insisted, while “the transformation of GCs from pure lawyers to business partners happened much earlier in Western countries, in our Adriatic region the role of GC has changed very fast in recent years, especially because there is a need on the market and demand from business in all industries to have agile GCs.”

Miscevic Leskovec agreed that “the role of the GC in the corporate world has become increasingly more important and complex,” and she reported that she “recognized this in the ex-YU countries as well.” The countries in the region, she insisted, “have been strategically focused on the development of a sound legal framework, as well as on the implementation of business standards and best practices,” and said that, rather than focusing simply on one task, “a GC has become a principal member of the management team and helps with broader business issues.” She conceded that the traditional role of the GC may be changing “a bit slower in the ex-YU countries compared to the EU,” but that this does not mean that the region views the role as being any less important.

Sonja Kovac disagreed, insisting that “the position of a GC does not differ in the region, as compared to the EU.” Instead, she said, all  GCs “share the same fate – which could be an advantage when sharing experiences and best practices, as well as tackling the challenges ahead together.” Mimic agreed that the market in the region is very similar to elsewhere in broader SEE, at least, and that any change in the former Yugoslavia is “more or less reflected in all SEE countries.” 

Whatever its pace, there appears little doubt that the role of the General Counsel is changing in the former Yugoslavia as elsewhere in Europe.

This Article was originally published in Issue 6.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.