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The transformation that the role of in-house lawyers has undergone is plain to see in the 2014 FT ranking of North America’s most innovative corporate counsels.
The legal departments represented include some of the continent’s blue-chip companies as well as smaller, up-and-coming businesses. They represent a wide range of industries from technology to transport, banking and insurance to pharmaceuticals and airlines.
However, legal teams from technology companies – both new and longer-established ones – make up nearly half the list. This is no coincidence.
These companies have an overtly innovative culture and the emphasis on doing things differently permeates every function, including that of the legal department.
Technology companies must also deal with the challenges of protecting their intellectual property and handling rapidly changing or even inappropriate regulation – two areas in which lawyers are essential. The combination of culture and legally-orientated business challenges gives lawyers in technology companies critical and evolving roles.
There are two well-established technology names at the top of the list: Microsoft and Intel. Each has gone through a renaissance recently and is attempting to retrieve the cutting-edge, image of its beginnings. In each case, legal teams appear to be in the vanguard of this reinvention.
At Microsoft, Brad Smith, the general counsel, embodies the change to the role of in-house lawyers. As with other general counsels in Fortune 100 companies, Mr Smith has responsibility for government affairs and public policy. His remit also includes corporate philanthropy. He says that the broadening of the role gives the general counsel “the tools and the ability to think more creatively about how to service the company”.
The Microsoft legal team has lawyers in 55 countries and sees its role as far more than keeping the company out of trouble. It is a broad, strategic resource and one that includes public relations professionals, academics and legislative experts.
With the advent of cloud computing, the legal team has seen its role as one of restoring users’ trust in the safety of their data. It has sued the US government three times, but also worked with it on legislative reform. Microsoft has played an active role in bringing together industry coalitions to influence the development of privacy security laws.
The team at Intel is also in a process of evolution. With a new general counsel, Steve Rodgers, the team has innovated in virtually all aspects of the legal function.
Encouraged by Brian Krzanich, the chief executive, to “think outside the box”, the lawyers have streamlined their processes, for example reducing the time it takes to conclude non-disclosure agreements from 17 days to six minutes.
Another evolution for in-house lawyers, in cases such as Microsoft, is adopting the role of corporate conscience. After the financial crisis shook the world, many in-house teams in the US and Europe were asked by their chief executives to look after ethics and compliance.
One general counsel who understands more than most the dangers that corporations can face is Thomas Russo, now general counsel at insurance company AIG, but previously at Lehman Brothers, the financial services group whose bankruptcy was one of the first flash points of the financial crisis.
Mr Russo’s role in helping turn AIG around from being $180bn in debt to a healthy company again has secured the legal department’s reputation internally as a profit centre rather than a cost centre.
And he has also made a significant contribution to the company’s pro bono work. One such programme helps gain special immigrant status for Iraqi refugees who have helped the US government, but are now in danger from anti-American violence.
One of the research components used to compile the FT ranking involves extensive references from chief executives and other high-ranking colleagues for their general counsel.
It seems that the highest accolade given is to describe their legal teams as “not really being lawyers”.
The team that stands out in this regard is that of Geoff Brigham at the Wikimedia Foundation, which hosts the online encyclopedia Wikipedia. Lila Tretikov, his executive director, describes him as a “true leader” who thinks and strategises about the big issues that face the Wikipedia movement.
Mr Brigham says that his team of six handles all the legal issues that face the world’s fifth most popular website. But he says that he also has the help of “one hundred thousand others” such as the editors, writers and other volunteer contributors who care about the issues of copyright, privacy and freedom of information.
“The skill set is not just running an internal legal department,” says Mr Brigham, but also tapping into the power of a global online community.
General counsel, Wikimedia Foundation
Geoff Brigham leads a team of six lawyers at the Wikipedia website and is driving several initiatives to protect freedom of speech and shape the legal landscape of the internet. Mr Brigham is guiding development of the Wikipedia Zero project, to give free access to the online encyclopedia on mobile phones in developing countries in Asia, Africa and South America.
Senior vice-president and general counsel, PulteGroup
Steven Cook has a record of building relationships, both internally and beyond, through initiatives such as an annual outside counsel summit. He transformed Pulte’s approach to enterprise risk management by creating a tool that tracks risks comprehensively, and also gives a higher profile to the value added by the legal function.
Senior vice-president and general counsel, NetApp
Matthew Fawcett, who has been described as a courageous counsel, has transformed the global legal team at NetApp so that it is run as a business. By adopting new technology such as automated non-disclosure agreements and benchmarking external legal spending against market data, Mr Fawcett has driven down costs as well as raised efficiency.
Senior vice-president and general counsel, eBay
Since joining as the company’s 96th employee 16 years ago, Mike Jacobson has built the legal framework for eBay’s business model to thrive globally. He advised on the establishment of the European Union’s e-money directive and has created a model for how company legal departments can play a role in the development of public policy.
Executive vice-president, corporate affairs, American Airlines
Stephen Johnson has extensive aviation industry experience in both company legal and private equity roles. In his current position, he plays a strategic and creative role helping the company manage commercial risk. Most recently, Mr Johnson guided US Airways through its complex and industry-changing merger with American Airlines.
Executive vice-president and general counsel with responsibility for legal, compliance, regulatory and government affairs, AIG
Over the past three years, Thomas Russo has helped to bring AIG back from the brink of bankruptcy to significant financial success, and has established an award-winning pro bono network. Mr Russo is widely regarded as an industry leader and an authority on the financial crisis.