A General Counsel for the Counsellors?

Does a law firm need a General Counsel?  While the notion of piling lawyers on top of lawyers may seem counterintuitive, let's step back and play one of my favorite thought experiments:  What (if anything) in the nature of a law firm as a business differentiates it in some critical way from a normal for-profit corporation operating on a similar scale and scope?

UK-based firms are increasingly asking themselves this question and here in New York, Shearman & Sterling has just appointed its first General Counsel:  John Shutkin, who comes from 16 years at KPMG International as its G.C.  What will keep him busy?  Conflicts (internal and external), risk management and insurance, firm governance and compliance, and the inevitable litigation and HR issues.  Shearman & Sterling has, wisely I believe, chosen not to make Shutkin an equity partner, so his compensation will not be tied to the firm's financial performance.

According to a recent Altman-Weill survey, nearly two-thirds of the top 200 US firms have a designated General Counsel, although it's typically a lawyer with a full practice as well who advises part-time; and of the one-third without such a formal arrangement, many plan to designate someone in the next year.  As the world regulatory environment continues down the road to ever-increasing complexity, a full-time G.C. makes sense; lawyers shouldn't have to stay current on every new governance wrinkle any more than should corporate executives running similar-sized businesses.  It really is "someone else's job."