Should you hire a GC, CLO, or Head of Legal for your PE-backed business?

Whether you’re hiring your first in-house legal expert, or hiring above an existing team ahead of a specific exit event, choosing the right legal leader for your PE-backed business is critical. As someone who helps private equity-backed companies navigate this challenge, I’ve seen first hand how critical it is to align role scope and expectations early in the hiring process. A misstep here can lead to wasted resources, missed opportunities and a hire who doesn’t fit your company’s needs now or in the future.

Many businesses want to hire a ‚General Counsel‘ but often the role remit, leadership level, budget or reporting line just doesn’t fit and needs to be addressed. Without a clear mandate and shared expectations, you might hire someone brilliant but ill-suited for the scope you need, leading to a legal leader who struggles to deliver the impact required or outgrows the position too quickly. Hiring too conservatively can mean replacing your General Counsel (GC) sooner than planned, while over-hiring risks bringing in someone whose skills exceed your current needs, leading to frustration or disengagement.

I always look to understand what impact you need from the position on a short-term basis vs long-term, and talk through the most common options before making a recommendation. Key to this is understanding the key differences between Head of Legal, General Counsel (GC) and Chief Legal Officer (CLO).

You may also be interested in: What’s the difference between a General Counsel and a Chief Legal Officer?

Three key senior legal roles

Senior, permanent legal hires typically fall into three categories: Head of Legal, General Counsel (GC) and Chief Legal Officer (CLO). Each role serves a distinct purpose, and understanding their differences is essential to making the right choice for your business.

For salary breakdowns of these roles, download our global in-house legal market report and salary guide.

Head of Legal (HOL)/VP Legal/Legal Director

This is often the first in-house lawyer for a growing company, sometimes given the GC title prematurely which can end up attracting the wrong profile of Lawyer. The Head of Legal is a hands-on role, focused on establishing the legal foundations of the business.

The Head of Legal typically sits on the leadership team but not the Executive Committee (ExCo) and will report to a member of C-Suite team. They’re tactical, ensuring the business runs smoothly from a legal perspective without necessarily shaping high-level strategy. Over time, this role can evolve into a General Counsel position as the company grows and legal needs become more complex.

When to hire a Head of Legal

Choose this role if your business is in its early stages and isn’t yet ready for an experienced, strategic legal leader. You might have been relying on fractional or external support to date and still have limited budget given your stage of growth.

General Counsel (GC)

A GC steps into a more strategic role, leading a legal team and moving beyond reactive risk management. The GC integrates legal considerations into broader business decisions, ensuring the company is prepared for challenges before they arise. A true GC role will have responsibility for legal as well as other areas such as risk and compliance across the organisation.

The GC is a bridge between legal expertise and business strategy, ensuring the company’s legal function supports its growth objectives. Typically, they will report to the CEO but can report to the CFO as long as there is a clear communication line with the CEO, which is paramount to maximising their impact and mitigating risk.

When to hire a GC

Opt for a GC if your business is scaling, managing a growing legal team, or facing increasingly complex legal and regulatory demands. This role suits companies that need a leader to align legal strategy with business goals.

Chief Legal Officer (CLO)

While „General Counsel“ historically described the top in-house Lawyer responsible for legal affairs, the CLO title was coined to highlight a broader mandate. The term gained prominence in the U.S. and later spread to other markets, including the UK.

The CLO’s impact extends beyond the legal department, making them a critical partner in achieving the company’s vision. This role requires a leader with deep legal expertise, business acumen, and the ability to navigate high-stakes environments.

In PE-backed firms, where exits, IPOs or M&A are common, the CLO title reflects the need for a legal leader who can drive value creation and align legal strategy with financial goals. The CLO title elevates the role to a true C-suite position, ensuring legal leaders have a seat at the table alongside CEOs and CFOs, especially in board-level discussions.

When to hire a CLO

Hire a CLO if your business is preparing for a major transaction, such as an exit, IPO, or significant M&A activity. This role is essential for large, mature companies with complex legal needs and a clear focus on strategic growth.

How to choose the right role for your business

Hiring the right legal leader starts with aligning the role with your company’s current needs and future goals.

Assess your needs

Early-stage companies or those with lean budgets should start with a Head of Legal to build a solid legal foundation. Scaling businesses with growing legal teams or complex regulatory needs benefit from a General Counsel. Mature companies preparing for exits, IPOs, or major transactions need a CLO’s strategic expertise. Discuss long-term goals with stakeholders to ensure the hire’s skills align with future milestones too.

Define the role clearly

Outline specific responsibilities, reporting structures, and expectations. Will the hire focus on compliance, lead M&A deals, or shape corporate strategy? Clarify whether the role requires leadership team or ExCo participation. Consider how the role might evolve as the company grows and the type of skills that will be required. Don’t hire a Head of Legal, give them GC responsibilities and not follow up with suitable pay structure, leadership level and title.

Prioritise cultural and strategic alignment

A great legal mind won’t succeed if they don’t align with your company’s culture or leadership style. Look for candidates who understand your business and can collaborate effectively with other executives.

Avoiding common mistakes

To ensure your legal hire is a success, steer clear of these common mistakes:

Hiring too senior, too soon

A CLO in a company that needs a Head of Legal may feel underutilised and leave quickly.

Hiring too junior for the role

An inexperienced lawyer in a GC or CLO role may lack the strategic vision or experience to deliver.

Unclear expectations

Without a defined scope, the hire may focus on the wrong priorities, leading to frustration for both sides.

Hiring a Head of Legal, General Counsel or Chief Legal Officer is a pivotal decision that can shape your company’s success. By understanding the differences between these roles and aligning the hire with your current needs and future goals, you can bring in a legal leader who not only mitigates risks but also drives growth and strategic outcomes.

Take the time to define the role clearly, align expectations with stakeholders, and partner with a specialist legal recruiter to find the right fit. Whether you’re laying the legal foundations for a growing business or positioning for an exit, the right legal leader will be a catalyst for your success.

First published on Georgia’s LinkedIn profile here.