In-House Counsel

Really, VW? Part One.

The big question of the Volkswagen scandal: where were the lawyers?

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Long before 9/11, when I began practicing at a now-defunct firm, I had a South facing office on the 42d floor of the Grace building. I shared the office with a co-worker, but I was fortunate enough to have the window seat, as it were. I never tired of the view; ever. It was always changing, always beautiful and always “there.” I could depend on that view to give me peace from the turmoil of large firm litigation practice. Now my view is to the South of Rochester, New York, and while often pretty, especially heading into Fall, I sometimes take that view for granted. Until something unusual catches my eye — a particularly nasty traffic back-up, the Blue Angels’ annual warm up preceding the local airshow, etc. It is often the same with scandals — political or otherwise. I take them for granted, viewed through jaded eyes, and sometimes with a bit of schadenfreude. Until something unusual happens, as it appears to be with Volkswagen.

Before you inundate me with links to stories detailing common practice in the auto industry, let me be clear; I am not shocked that shenanigans go on in the business world. I am shocked that such shenanigans often go to the highest offices in the business world, in this case the former CEO of VW Europe. He apparently knew that his company rigged emissions testing equipment on their diesel automobiles. He knew it, and either didn’t care to stop it, or was frightened of the implications. There lies the rub for us as counsel, being frightened of implications. We, as inside counsel, have the duty to our clients (the corporations for which we work) to recommend against, avoid, and sometimes report — shenanigans. These usually appear before me as small potatoes type stuff, someone wants me to play wordsmith with some term or condition in order to achieve a sales goal. They also usually smell like day old fish, and I can root them out for what they are, and inform the requestor that such and such may not be a good idea. Luckily, we have sufficient controls in place, so that even if the person were to go ahead an attempt to pass off changes without my approval, they’d be caught somewhere in our processes. And our GC has the same role on a much larger and more important scale in the C-suite. If my smaller issue comes to light in an audit, we have rather simple ways of handling the situation. Sometimes it results in termination, but generally a simple fix is all that is required. At the other end of the spectrum, when a major corporate player is at the heart of the issue, it can be the most harrowing and difficult time in a GC’s life. (Yes, unless they’re complicit, but that would definitely be tl;dr material.)

I know it has been out for years, but I am currently listening to “Crash of the Titans” the story of how major banks almost crashed the world economy due to lax controls in their business dealings. And I suppose that is what surprises me the most; how relatively simple it is for two titans of mega-banks to sit in an apartment and discuss mergers involving many billions of dollars as though they were ordering toast. I admit to a bit of Pollyannishness, but such numbers still make me dizzy. Just as my own involvement in deals where mere millions of dollars flow in or out of a corporate treasury can seem large, I am similarly amazed that the head of major corporations can be so stupid as to think they, like so many others, just won’t get caught. And you know, it’s true, so many don’t. Being passed on the Thruway by so many travelers far exceeding my own tolerances for speeding, it makes me wonder how fast the poor schmuck who does get pulled over must have been going.

David Mowry is Senior Counsel to a large technology company. The views expressed do not necessarily reflect the company’s position or opinion on issues raised herein.

David is a former litigator, two time federal clerk, and former President of the Association of Corporate Counsel’s New to In House Committee, and is available for speaking engagements. If interested, you may reach him at dmowry00@gmail.com.

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