The Chief Legal Officer (CLO) is the person with the highest authority who is involved in the legal affairs of a publicly traded company. Legal director is perhaps a relatively new title. What is CLO? Why do businesses need a legal director? What responsibilities will the legal director take on? You can find the answer in the article below that Giaiphapdonggoi.net shares!
1. What is CLO?
CLO stands for Chief Legal Officer. The CLO is the head of the legal department in an organization and is part of the top management. They tend to all legal matters internally as well as externally. Every organization should have a legal head with a team to avoid potential liabilities.
What is CLO?
This role includes providing legal advice to the board of directors, chairman of the board, executives and other senior management. CLOs must have strong initiative, as well as excellent leadership and management skills and business acumen.
2. Basic responsibilities of CLO
The CLO role and the number of members on their team depends on the size of the organization. The larger the organization and the larger the number of employees, the more external risks the organization has regarding issues. One of their main responsibilities is to make sure the company is filing in accordance with the law and is also filing its taxes correctly. They must ensure that the company is not liable for any lawsuits. The CLO must provide accurate and up-to-date advice to board members regarding filing and taxes.
Basic responsibilities of the CLO
The CLO must ensure that the contracts signed by employees or customers are free from loopholes and can't harm the organization later on. They tend to translate legal jargon into lay language for the board and staff. Since the CLO is in charge of the legal documents, that means they take care of a lot of the paperwork. Usually, it's done by their team; however, it falls on the CLO itself in smaller organizations.
Every organization has to take risks to expand, which means that before any such decision occurs, the CLO must conduct research into the plans and identify the risks to save the company from large losses. Liabilities. They give legal advice and draft documents related to new business ventures.
The CLO is authorized to conduct training to keep employees checked on legal procedures and up to date to avoid any internal or external misconduct. In the event the company encounters legal problems, the CLO represents the company in court or in settlements. In a way, it can be said that the CLO represents the legal face of the company.
3. Importance of CLO
The importance of CLO
There are rules and regulations in place for companies to follow, laws they need to follow. A proper CLO ensures that the company does not face any customer litigation or faces any tax-related risks. Having a CLO among senior management is crucial as they draw up contracts as attorneys and other legal documents.
4. How to become a CLO?
To be a CEO or COO, the degree doesn't matter. To become a CLO, however, requires a law degree and a few years of corporate law experience as not many organizations want a fresh graduate lawyer to head their department. The CLO must have complete knowledge of the possible lawsuits a company may face in different situations and deal with legal issues.
A CLO must also have good communication skills and an aptitude for research and document preservation. And last but not least, it must be a good negotiator, mainly when the company deals with external customers.
5. Distinguishing between Chief Legal Officer (CLO) and General Counsel (GC)
Distinguishing between Chief Legal Officer (CLO) and General Counsel (GC)
In a word, the GC is responsible for the legal affairs of the organization while the CLO has a much broader scope of activities, integrating the legal team and matters with the broader organization, its purpose is to improve corporate performance, of which legal is only one part.
GC is considered a traditional executive role, managing a company's legal compliance and corporate governance. General Counsel handles court negotiations, imparts legal advice to executives, manages the legal team, and oversees regulatory compliance.
The CLO is a C-Suite position that acts as a liaison between the business and legal teams. In addition to possessing legal expertise, an effective CLO will also have business acumen and act as a strategic partner for the executive team. Since everyone is different, what does each individual take on?
