A good understanding of financial statements is a vital part of an in-house lawyer’s knowledge, but it has become a critical skill set for any general counsel with boardroom aspirations.
Whether you are helping your organisation stay compliant in its accounting obligations or part of a team looking into a potential merger or acquisition, the board is responsible for making decisions that impact the financial performance of a company, and understanding the numbers is key. A lawyer who understands financial statements and accounting principles can help board members interpret financial data, identify potential financial risks and opportunities, and evaluate the financial impact of various decisions. This can be particularly valuable in situations where the board is considering major strategic initiatives, such as mergers and acquisitions, or when the company is facing financial challenges.
In addition, lawyers with strong financial skills may be better equipped to communicate effectively with other board members and stakeholders, such as investors and financial analysts. They can help translate complex financial information into understandable terms and provide meaningful analysis and recommendations.
There are several ways for lawyers to gain financial experience and develop the skills necessary to make it to the board room:
- Take finance and accounting courses: Lawyers can take courses in finance and accounting at law school, business school, or other continuing education programs. These courses can provide a solid foundation in financial concepts and principles.
- Lawyers can seek out financial-related assignments within their organizations. This may include reviewing financial statements, drafting financial agreements, or analyzing financial data.
- Network with finance professionals: Lawyers can network with finance professionals such as CFOs, investment bankers, and financial analysts. This can help them gain exposure to financial trends, insights, and best practices.
Overall, gaining financial experience as a lawyer takes time and effort, but it is an essential step towards developing the skills necessary to make it to the board room. By building a solid foundation in financial concepts and seeking out opportunities to apply those skills, lawyers can position themselves for leadership roles within their organizations.
For more information or for a confidential discussion on building your team or your next steps in your career, please reach out to your local Taylor Root In-house team.