The GC-CFO relationship is a cornerstone of effective corporate governance. As the adage goes, “he who holds the purse strings holds the power.” To maximize this partnership, legal teams must understand the CFO’s priorities. In this C-suite conversation with Kevin Rubin, CFO of BetterUp, discover how in-house counsel can deliver tangible value to the finance function. Learn to position legal as a strategic partner, effectively communicate complex risk landscapes, and build a compelling case for increased legal resources. Rubin underscores the CFO’s desire for legal counsel who provides sound advice and offers strategic insights and decisive recommendations.
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C-Suite Series: What The CFO Wants In The Legal Department Kevin Rubin, CFO BetterUp
My name is Kevin Rubin. I’m the Chief Financial Officer at BetterUp. A quick fun fact about me is I am a huge diehard Laker fan.
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On this episode, I’m excited to welcome Kevin Rubin, the Chief Financial Officer of BetterUp. He’s a longtime CFO. This is part of our C-Suite series, where we’re trying to get behind the business and get some real concrete suggestions for being a good partner from the folks that you work with every day. Kevin, thanks for being in The Legal Department.
You’re welcome. It’s my pleasure. Thanks for having me.
I appreciate you being here because the CFO is such a core part of the relationship for the in-house counsel. You fund our budgets. Many times, I feel like we share this structural support for the organization. We have a similar role. Sometimes, there’s even a reporting relationship, but lawyers don’t always know what the CFO is dealing with other than those times that we’re working on hard issues together. Can you talk about the core accountabilities for a chief financial officer?
The Core Accountability Of A CFO
At the highest level, we’re accountable for the company’s financial model. That includes strategic planning, investment decisions, how we think about risk management, capital structure management, budgeting, and forecast reporting. We tend to be strategic leaders around the C-Suite, being able to collaborate with the executive team and translate the strategies into an implementable, long-term financial model. Operational efficiencies, compliance, governance, stakeholder management, and more. We’re seeing a lot of CFOs being held accountable for technology and innovation. Digital transformation has been a hot topic for the last several years. Data and analytics are things in the sphere of all of the information. We, as CFOs, are responsible for this.
I’m assuming, for my own career, lawyers slot into many of these different functions. We’ll be both peers in certain projects. I don’t want to say adversaries, but we may be struggling on others, depending on risk management. Not all CFOs and growth companies tend to be more aggressive.
I feel a lot of these things are personal responsibility for my companies, but I can’t take action on some of these or necessarily understand all of the elements without partnering with my legal team. There are elements of this that cut across all aspects of both of our responsibilities.
I view the CFO a lot of times as your partner, one of the adults in the room, when business development gets a little edgy. What are the core competencies that you, as a CFO, look for in your general counsel or in-house counsel colleagues?
Going back to your lead-in, the CFO and the GC relationship is critical. It’s one of the closest relationships that I have formed in the companies that I’ve been at. As we talked about, we depend on each other for success. For me, I want a partner who is incredibly competent when it comes to understanding legal risk and all of the aspects of legal expertise but is able to translate that into practical business decisions.
The CFO and GC relationship is critical. It's one of the closest relationships in the companies. They depend on each other for success. Share on XIt’s being able to understand the legal dynamics of whatever the topic is. It could be contracts, employee relations, or dealing with the board or customers. They understand the risks the company is taking or being asked to take and can come up with a practical solution. Number one is understanding how to translate what I learned in the law firm into practice in a business, which often is academic and not. It goes without saying integrity and ethics, as well as all else.
I’ve been in situations where that has been important and not taken for granted. My last chief legal officer was incredibly strong from a strategic vision perspective in how he approached the business. He was a forward thinker and innovative in how he approached things. I thought that was incredibly helpful to the business. For all executives, GCs, or chief legal officers included, you have to be a problem solver. It’s easy to have issues arise, but how you address those issues, how you think about whether it’s solving for yes or solving for the best of the worst, and being able to partner and problem-solve are critical.
You mentioned coming from the law firm. Those are not necessarily the skills that you learn there. You learn to spot a lot of issues and tell people how it’s hard or scary to do what they want to do. What about coaching or feedback you’ve given to your GC colleagues over the years about how to be that problem solver?
I’ve had GCs across the spectrum who view their role and department as effectively the outside counsel bit working inside. I’ve had legal departments and GCs who have been on the other end of the perspective that says, “I am a critical piece of the executive team who happens to have expertise in legal.”
The latter is more effective in running and being a participant in the business. My coaching tends to focus on how you always take risks in business. There’s no decision that you make in business without risk. How do we get our hands around the magnitude and likelihood of the risk and come up with an appropriate balance between them?
I’m looking for my general counsel to take a position, not offer a legal view and say that the business can make those decisions, but take a position and say, “This is my recommendation.” The more experienced general counsels understand that the latter part and the earlier in career general counsels may struggle to be a lawyer and to make a business decision in my experience.
How frustrating is it to have your in-house counsel say, “That’s a business decision?”
It’s frustrating because the whole point of having an in-house counsel and having that function in-house is that you get to be part of those business decisions. I encourage my general counsels to take that position and be part of that conversation.
On men are from Mars, and women are from Venus perspective, we are trained that it’s not our job to make the business decisions. Our job is to support the business. It can be scary and feel like you’re stepping out of your lane. There’s also a feeling of like, “Am I going to get blamed if this doesn’t work?” Sometimes, it’s nice to hide or feel like, “I’m giving you the legal advice here.”
The Value Of In-House Legal Counsel
I’ve experienced that. As you build that rapport and relationship with your partner, whether it’s GC, chief legal officer, or head of legal, you have to push your comfort zone. The value that you bring internally is not doing a bunch of legal work at a lower cost because you’re in-house and you’re not at higher rates. That has nothing to do with factoring into the value that a legal department brings to a company. It’s the experience. It’s the know-how. It’s an understanding of the business. That can be product, workforce, and regulatory environment.
Being in-house is like being in a different position to understand your business than being at a law firm. For those that focus on simply the cost arbitrage, you’re missing the actual value of having in-house legal. They can understand your business to a level that nobody outside can. That means they’re giving better advice, and they can make better recommendations. They can influence decision-making. You are taking less risk, or at least you understand the magnitude of the risk. There is tremendous value in having that in-house competency. It is a function no different than your sales organization, product organization, and finance organization. We all have seats at the table. We’re all expected to give an opinion and make decisions.
That’s a great reassurance, Kevin, for people reading this. Sometimes, as lawyers, we get to be like the armchair quarterback because we’re not responsible for delivering on the business, but we could say, “If I was running the world, I wouldn’t do this. Can you believe the business wanted to do this and that?” That’s a coward’s approach. It’s helpful to hear from someone in the C-Suite that you want people and lawyers who are there in the trenches helping you make those decisions and not telling you where the minefield is.
You’re a better executive for it. I would think of it in this context. If you’re sitting around the C-Suite table, your job number one is to be a leader of the company. Your job number two is your functional responsibility. If you can keep that in perspective, you become incredibly valuable to your company.
Your job is to be a leader, and your functionalist responsibility is incredibly valuable to your company. Share on XYou did mention the cost arbitrage. We feel like a way to measure our value to the company is to show, “With my headcount, I have saved the company X dollars.” One of the challenges in legal is demonstrating your value, being around the table, and showing your strategic thinking. It’s hard as opposed to sales or something else. It’s hard to show concrete metrics of what the value is.
The Cost Arbitrage In The Value Proposition
Yes and no, I completely understand that part of the value proposition is the cost arbitrage. Every function has that. You could completely outsource many of your business processes or stuff them inside. You can measure the cost delta of doing those. I recognize, and especially within legal, that this is significant. I don’t want to dismiss it. I don’t think that’s the number one value proposition.
I approach this differently than others. I believe that legal is one of the hardest budgets to manage because you’re not in control of the legal spending required to support. You can get sued by anybody for any reason. It may or may not have any validity, and you have to defend your company. I can put a budget in place for my legal group.
At the end of the day, it does not matter because I have responsibilities to defend the business regardless of whether it’s in or out of budget. That’s a way to understand. Am I in or out of expectations? I do recognize that, at some point, you have to defend your business. It may or may not align with your expectations for the year. As a legal department, it does come down to the more information that you can provide to the company as to what you’re doing.
My last chief legal officer did a brilliant job in creating a dashboard of effort. He was able to report on a weekly basis all the contract volume that his team was supporting. From customers to vendors to employees, he was able to communicate the value that legal was surrounding itself in the business. Being able to quantify effort and where time is spent on what is incredibly helpful as you’re having conversations with your CEO, CFO, or others in the C-Suite around legal expenses. I would be remiss if I didn’t point out that budget doesn’t matter. You have to be responsible.
I’ve done a few episodes on what we call legal operations or law department operations. It’s an area that some GCs can overlook. Don’t they know that we’re busy? Don’t they know they see me in all these meetings? They see my team, don’t they know? Having systems to track what you do is helpful, as it’s helpful to hear from you that you look at it and you care.
It’s no different than when your CIO presents an activity for IT tickets or infrastructure work. Legal is similar in that respect. I would encourage you to think about how you can put systems and processes in place that capture the volume of effort your team is working on. You can communicate that back. Everybody knows that everybody is busy. You can look at your colleagues and see heads are down. They’re working on work.
Think about how you can put systems and processes in place that capture the volume of effort that your team is working on so that you can communicate that back. Share on XIf it’s not your function, and you’re not the one having the weekly staff meeting and understanding deeply what’s happening, it’s hard for your colleagues in other functions to translate that effort. You have to give them the breadcrumbs to say, “This is how we support the business. This is where our time and effort are going.”
It makes it more tangible for the others. It goes vice versa. You don’t know what your sales team is doing in and out day to day. You can assume and try to guess what they’re doing based on your involvement with them. At the end of the day, you’re not sitting there managing them each and every day. Don’t take for granted that because you look busy, people appreciate that you’re busy.
Let me ask this because I tell people, “It’s a tidal wave of work all the time.” There are lots of inbound requests, and you have your big rocks, cases, deals, and governance. Tracking the work can be a job in and of itself. One solution is technology. There are a lot of law office management tools out there, but I have found it difficult to get budget approval to get those sorts of resources because it’s hard to tell the CFO, “I need $50,000 to buy this tracker, so I can show you all the work I’m doing.” What would be persuasive if a GC was coming to you trying to build out their legal department operations?
I go back to one of my earlier comments, which is that CFOs have been held responsible for digital transformation and innovation with the idea that you want to digitally transform in every other area of the business. When it comes to legal, CFOs don’t want to spend money on operational systems. If you’re giving enough opportunity, general value, and better-systematized work, it will be more efficient. It will provide you with greater insights into how you can deploy resources.
There is a topical wave of digital transformation and innovation with generative AI and how that can impact legal and many other functions. There are some tailwinds to helping those conversations. If the CFO is not willing to consider innovating across the business, and that’s inclusive of legal, they’re missing a massive opportunity.
I have a great CFO. I don’t want to say that. I love your views and perspectives on this. I feel like you’re a supportive leader of the legal function. Whoever your GC is at BetterUp, they are lucky.
It’s an important relationship. I feel lucky when that relationship works, and I have a like-minded leader in that role.
Let me ask this because I know you’ve done this as CEO. Do you feel that relationship is different with the GC when you are a CFO versus a CEO?
I was an interim CEO only for a relatively short period of time. I relied on my chief legal officer more to help me navigate in that role than I did as more of a partner in the CFO seat. It was 90 days at most. It’s hard for me to say, but I do think as a CEO, if you’re not leveraging your CLO or GC for advice and guidance, you’re missing out on a key constituent that can be helpful.
They’re similar. I find a lot of what I do, regardless of which executive I’m talking to. It is that role of advisor and being a sounding board a lot of times. We haven’t talked about this before, and I don’t know if this is me, but I describe the GC role as being lonely because you have a lot of confidential information. You can’t always share it with all of your colleagues. You have this ethical obligation for your license and the board in many cases. Is that similar for the CFO? I wonder if there’s a feeling of being like it’s all on your shoulders.
The Isolation In C-Suite Position
It is in different ways. I view the CFO role as having two masters. I have a fiduciary responsibility to my board and my shareholders, while I also have a responsibility to my CEO and the business. I communicate that clearly when I take on a new CFO role because I feel like I have in that respect. I feel like the CFO will often take the bad guy role. I’m fine with that. If my sales team wants to throw me under the bus in front of a customer and say, “I’m sorry. I can’t do that. My CFO won’t approve it.” That’s fine if people want to do that internally and say, “We’re not going to be able to do this because my CFO won’t approve it.”
I never thought about it in the sense of loneliness. The CFO and the GC tend to have to play a role that isn’t always popular or fun, but it’s important. It does come down to integrity and ethical responsibility. I always tell my teams, “What you do when nobody is looking is the most important thing you do.” That’s what I look for when I hire team members. You have to do the right thing. In some respects, we’re aligned in that way. We have confidential information. We can’t always share, which may be why my GC has always been a close partner to me. We can generally share some of those things, but not all of those things.
The CFO and GC play a role that isn't always popular. It isn't always fun, but it's important and comes down to integrity and ethical responsibility. Share on XI appreciate you calling out the bad guy role because it bugs me, and I want to always be that partner to the business. I want to be in the department of yes-ifs or yes-and. When people say, “Legal won’t let us do this,” I get touchy.
In truth, they usually only get half of a story. Legal won’t let me do this for some reason. When you explain to them why they can’t do it, that’s not what I meant. As much for legal as it is finance, how you communicate, how clearly and transparent that communication is helps because when you’re talking to others across the aisle, and all they hear is no, they may miss the, we can do this if, and you spell out the criteria or the conditions, but what they heard was, “I can’t do what I wanted to do.”
There’s a level of accountability on the other side of the aisle. I don’t think it’s fair to necessarily have a jump to judgment that legal or finance said no for something when what we said was, “If you structure it in a particular manner, it’s yes. You can’t do it in the manner that you put forth, but here’s an alternative.” There’s an element of accountability to the rest of the business.
With all those criteria and problem-solving, it’s hard to do those things. It’s easier to say, “Legal and finance won’t get on board with this.” We touched on this. You’ve worked with several different GCs. That’s lucky for you because you can see different strengths and weaknesses. You’ve talked about integrity, strategic thinking, and being willing to make those business decisions or have given opinions about business decisions. When you think back on those 3, 4, or however many GCs you’ve worked with, what have been the standout characteristics?
The Spectrum Of Risk
In addition to the table stakes of having expertise, competency, and legal integrity, the difference is in that qualitative aspect. Understanding and being able to communicate the spectrum of risk, but being able to take a decision or make a recommendation. The GCs that have been able to offer solutions most pragmatically tend to be better for the business and partner for me.
I know all the reasons why things can’t happen, and I can throw up as many objections from my side as why things can’t happen, but the difference is how do you find the path through to make 80% or 90% of it happen? It’s not 0 and 100, but how do you get as much benefit out of a decision as you can with all of the understanding you have? That is that superpower that your GC can bring. We understand there’s a bunch of risk here. I’m making stuff up at this point, but the practical reality is no one is going to sue us for that or the time and effort for somebody to bring action against us for something like that. The juice isn’t worth the squeeze.
Understanding where the practical risk resides is incredibly valuable. I can go to my outside counsel and say, “Tell me the risks of this business decision.” They will paint a bleak picture. What I need is for somebody to say, “That decision isn’t without some risk, but here’s the real practical reality of that decision and where most of your risk resides.” That’s the difference.
That’s the secret sauce, but it goes back to what you said earlier, knowing the business helps you. It’s core that the GC knows the business. You can look at that landscape and say, “It might happen, but it’s unlikely.” It’s worth the risk to move forward with our business decision. I want to take a pivot. I get this question a lot from in-house lawyers who are aspiring to be the GC chair.
If you’re looking at candidates for a GC position and somebody has not had the primary responsibility, they’re not a general counsel, they’re a deputy, they’re an associate general counsel, or they’re even at a law firm because you’ve been in the hiring position there, is having held the GC chair a requirement for that role, do you think?
The General Counsel
The practical answer is no. It’s not a be-all-end-all requirement. Different companies and stages require different levels of experience and skill sets. If you are deputy GC of a large division of a Fortune 100, you are overqualified for most GC positions at your typical technology company. I don’t have one answer. It’s circumstantial, and depending on the nature of your role and experience, I don’t know that being a GC matters. It’s what the experience is. What was your area of responsibility? What are you bringing to the company you’re interviewing for?
When people are looking to weed out candidates because there are great people everywhere, they tend to look for easy ways to say yes or no. If you haven’t had it, you could get looked over. My opinion is, if that’s what you’re seeking, develop relationships in the community so people understand what you do and what you bring, irrespective of your title. You can overcome any objections that would exist if you didn’t have the seat.
It’s important people know your elevator pitch and what you’re good at. Having people who can vouch for you as that business partner and problem solver is important because if you don’t have the credentials, you need somebody to show you can do the job.
Sometimes, you don’t even get an opportunity to pitch yourself. It’s the same in the finance space. If you’re a head of finance, a chief accounting officer, or a head of accounting, you have the same challenges. If you want to aspire to be a CFO, your title alone would suggest that you have part of the skill, not all of the skill. It’s a similar thing. If you are fortunate enough to be able to make your case, having those around you, especially those in other functional leadership roles, who can talk about the value you brought to the business is incredibly helpful.
Thanks for that. That’s not necessarily the core of what the CFO does, but I have a lot of readers who are eager to build relationships with CFOs and eager to get the next step on their career journey. It’s helpful to hear what you might be looking for. Back on budget for one second because for right or wrong, we think of the CFO as holding the treasure chest. I took good notes on what information I should be gathering if I’m not already to show the value of my department. I feel like technology is almost easier to get approved versus headcount. I wonder about suggestions for how to make a pitch to the CFO at budget time or throughout the year about why we should hire a new FTE in the legal department.
I go back to the data. Being able to communicate how many contract administrators it takes to support a certain volume of contracts by way of example is helpful. We processed 4,000 customer contracts. I’m probably going to get laughed at this, but let’s say we had ten contract administrators. I don’t know if that’s the right relationship. That depends on the nature of the company and how involved the contracts are. Let’s say you had ten, and you were able to process 3,000. We think our business is going to grow 30% to 40%.
Appreciating the relationship between changes in the business and the downstream impacts on the legal group is important. If it’s the relationship between the number of contracts to legal resources, it’s the relationship to procurement spending to certain relationships for legal resources, it’s employee size to employment law, and if it’s changing in the product that requires a different type of legal support from a privacy and data perspective, or it’s simply becoming more important given the nature of the world.
Understanding the relationship between the business’s operation and the need for legal resources is table stakes. I’ve generally set out a framework. If your business and sales organization are growing at a certain level, there are natural relationships across many different functions. It affects sales operations, deal desks, collectors, and payments. Understanding those relationships is important. It becomes a much easier conversation.
We’re going to grow our business by 30%. We’re doing it in a new market where we don’t have any resources. We need resources to support that market. We’re seeing trends in our business that are forcing us to have more resources in a certain area. Being able to communicate the relationships between what’s happening in the business and how it impacts legal and in another position, for that matter, and having an awareness of remediation steps that you can take is important. I’m picking on customer contracts because they are easy.
If you’re spending a lot of resources on customer contracts, how have we considered educating the sales team that these three things are showstoppers and stop bringing them to us so that can ease some of the burden from the legal group or looking at our contracting vehicles and deciding, “We’re spending a bunch of company resources negotiating a particular position that we’re giving on and is not something that’s going to significantly change the risk profile of our customer relationship? How have we thought about changing our contracting vehicles to eliminate the need to negotiate this every time? How do we empower other functions to have these conversations that may be already in the loop and lower-cost resources?”
Being clear on how your resources are impacted by changes in the business, but also showing openness and willingness to continuously improve to reduce the need for resources because, at the end of the day, we are all cost centers, and it’s never been more important than it is to drive profitability. Showing that level of responsibility means saying, “These are the things I’ve done to try to alleviate the burden of my team.” You’re taking a lot of objections away.
Legal is what it is. If you have a lot of litigation, you’re going to have a lot of legal expenses. If you’ve been proactive and put policies and controls in place to try to mitigate some of those, you’re in a better spot. With any functional leader, you are being able to clearly communicate why you need more resources and what you’ve done.
That’s helpful. I’m going to use that as my playbook as I go forward in this budget cycle. Kevin, I can’t thank you enough for this conversation. I feel like I learned a lot. I hope our audience did well in terms of dealing and building that partnership with the CFO. I close all interviews with the same question. It’s more fun. I assume even in the finance department, you’re having fun. What is your pump-up song?
Mine is Metallica, Enter Sandman. It’s got the best introduction and riff of any other song.
Thank you so much for being in The Legal Department. I appreciate it.
My pleasure. Thanks for having me.
