Is It Time to Hire a Chief Legal Strategist?
Could your company use its legal environment to look for strategic opportunities?
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The Walt Disney Company has used sophisticated and creative legal strategies to manage its intellectual property, including the Mickey Mouse character.
Image courtesy of The Walt Disney Company.
Here’s a strategic angle that most businesses don’t think about: how they can use the law to secure strategic business goals.
“The processes through which corporate legal departments provide competitive advantage remain poorly understood,” write Robert C. Bird and David Orozco. “All too often executives still view the law as a constraint on managerial decisions, primarily perceiving it as an issue of cost and compliance.”
That misses some opportunities, Bird and Orozco point out, in “Finding the Right Corporate Legal Strategy” in the Fall 2014 issue of MIT Sloan Management Review.
“Some leading companies have managed to deploy their legal departments to shape the legal environment in order to secure long-term competitive advantage,” write Bird, an associate professor of business law and the Northeast Utilities Chair in Business Ethics at the University of Connecticut School of Business, and Orozco, an associate professor of legal studies and MBA program director at the Florida State University College of Business.
One of the highest profile examples is the Walt Disney Company, which has “deployed sophisticated legal strategies to capture the profits of innovation-related activities, particularly in the field of intellectual property management,” the authors write. Facing the expiration of copyrights on characters from Mickey Mouse to Snow White, the company transferred the value of that intellectual property into thousands of newly registered trademarks for various characters, names and images. That move “facilitated the expansion of name and character merchandise licensing, which now accounts for a global, multibillion-dollar, high-profit-margin business.”
But approaching legal issues in sophisticated and creative ways isn’t generally a specialty of most C-suite executives. That’s where a “chief legal strategist” comes in.
To think strategically about how to position a company for the future within the rules of the law, Bird and Orozco recommend that a company’s CEO and general counsel authorize and delegate someone to conceptualize and lead legal strategies that generate business opportunities.
This person, often referred to as a chief legal strategist, “should be empowered and provided with the support and resources necessary to champion high-level strategic efforts within the organization.” In a small or medium-sized company, this person could be the top legal officer or the general counsel.