Does the presence of GC in the top management team affect debt financing choices?

This paper examines whether the presence of a General Counsel (GC) in the top management team affects a firm's debt financing choices. We argue and find that GCs help reduce information asymmetry and enhance creditor coordination, resulting in higher public debt. Additionally, we observe that firms with a GC in top management exhibit greater heterogeneity within public debt compared to non-GC firms. However, we do not find a significant association between the presence of a GC and the use of private debt. Further analysis reveals that firms are more likely to use unsecured debt when a GC is part of the top management team. The impact of the GC is particularly pronounced in firms with high information asymmetry and those experiencing financial distress. Our findings remain robust across alternative measures, various model specifications, and different research design choices. Overall, our findings suggest that the role of a general counsel extends beyond legal affairs and influences financing choices.