General Counsel

Inside Straight: Kvetching About Comp

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I worked for twenty years at the darkest of the black-box compensation law firms: No one knew what anyone else was being paid, and the firm forbade talking about compensation. Here’s the curious part: We obeyed.

I saw the raised eyebrows of partners considering moving laterally to my firm: “Right — no one talks about compensation. You guys must talk about it all the time, just like we do at my firm. It can’t be a secret.”

Wrong. We really, honest-to-God did not talk about compensation. The subject just didn’t come up.

I’ve heard second-hand that this is true for other black-box firms, too. The managing partner of a different large, black-box comp firm recently told one of my colleagues: “Once you take compensation out of the limelight and forbid people from talking about it, then people stop talking about it. The subject drops off the table.”

That sets the stage: At firms where lawyers are permitted to talk about each other’s compensation, they do. And at firms where lawyers are prohibited from talking about compensation, they don’t.

Riddle me this: In corporate law departments, we are not prohibited from discussing each other’s compensation, but we don’t do it anyway. Why is that?

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Inside Straight: On Clients Who Can’t Tell Good Work From Bad

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I recently got a lift to the airport from a lawyer at a mid-sized firm who I’d met only earlier in the day. “It must be a pleasure to work for you,” he said.

On the one hand, that seemed strange, since I work so hard to establish a public persona that I’m a pain in the neck. (Frankly, that’s not much of a charade.) On the other hand, this seemed not at all strange, since I’ve now grown accustomed to lawyers at firms sucking up to me.

But I figured I’d play along: “Why would it be a pleasure to work for me?” I asked, innocently. “I’m pretty tough on our outside counsel.”

“Because you can tell good from bad. You worked in private practice for 25 years, and you’ve labored in my field. I suspect that, back when you were playing the game, you could write a pretty good brief. When an outside lawyer sends a bad brief to you, you may criticize it, but at least when a lawyer sends a good brief to you, you’ll recognize that it’s good. I work with an awful lot of clients who can’t distinguish good work from bad.”

Ha! Here’s an issue that I’d noticed when I was in private practice, but never really thought about. And it’s an issue that arises frequently in-house, because an in-house lawyer’s clients typically are not lawyers. My chauffeur may have thought that he was currying my favor by flattering me, but in fact he was doing something much, much better — he’d given me fodder for a blog post.

What should lawyers do when their clients can’t tell good legal work from bad?

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Village Voice GC Stands Up for Everyone’s Favorite Online Prostitution Ads

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If you’ve ever wandered over to Backpage.com and spent a few minutes reviewing the classified ads there, you probably realized that you had just discovered the seedy underbelly of the internet. Rife with ads for adult services — which is arguably just an elegant way of saying prostitution — the website, owned by Village Voice Media, has come under fire for its association with human trafficking.

Leave it to the company’s general counsel, Elizabeth McDougall, to take a stand for these scandalous online ads. After all, it’s great business! Backpage reportedly has a 70% market share for prostitution ads in the United States, generating millions in revenue.

This week, McDougall is taking additional heat from state attorneys general for her statements in an off-color op-ed column published in the Seattle Times. What could she have said that was so controversial?

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Morning Docket: 05.18.12

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* Rob me once, shame on you; rob me twice, shame on me? Supreme Court Justice Stephen Breyer was robbed for a second time, but this time as the victim of a burglary on May 4. [Thomson Reuters News & Insight]

* Dewey know when this ship is finally going to capsize (so we can stop making these puns)? Two of D&L’s Hong Kong partners have decided to defect to DLA Piper, and more may be joining them soon. [Asian Lawyer]

* He might’ve been a “bad husband,” but that doesn’t mean he’s guilty. The jury in John Edwards’s campaign finance trial will begin deliberating today. Let’s see if they convict him of being more than an adulterer. [CNN]

* After his citizenship stunt, Eduardo Saverin can look forward to being defriended by the United States — not like that’s a bad thing, because to be honest, the movie version of him is much cuter. [New York Daily News]

* And this is why lawyers shouldn’t try to be funny. Safeway’s General Counsel, Robert Gordon, is being branded a sexist for telling a recycled joke about pigs and D.C.’s most powerful women. [Corporate Counsel]

* A three month suspension has been recommended for a former Treasury Department attorney who attempted to steal ties from Nordstrom. What, he couldn’t spring for a Neiman’s run? [National Law Journal]

* If you bought those stupid ass Skechers Shape-Up shoes in the hope that your booty would look like Kim Kardashian’s, you can get a piece of the $40M settlement. Not bitter, not at all. [Los Angeles Times]

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Inside Straight: How Do You Displace A Competent Incumbent?

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I gave my “book talk” about The Curmudgeon’s Guide to Practicing Law at Schnader Harrison’s annual retreat last Saturday and then had the opportunity to moderate a panel of six (counting me) in-house lawyers. Three of the gang were from QVC, one from Endo Pharmaceuticals, and one from the Graham Company. Being a rabble-rouser at heart, I started the discussion by posing the question that I often considered during my time as an outside lawyer: How can a law firm that wants new business displace a competent incumbent firm?

My co-panelists were quite good, but I must say that their natural instinct when confronted with this question was to evade. Each panelist started by saying something that was not quite responsive to the question. Only after some follow-up questions did our panel finally tell the audience how to displace a competent incumbent.

Let me start with the evasions, saving the real answers for the end . . .

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Inside Straight: Creating A Unifying Mind

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For every matter that we handle, we need one “unifying mind.” We need one person at the helm; that person must either personally know everything that’s happening in the matter or, at a minimum, know where the knowledge lies. (Extraordinary cases may be beyond the capacity of a single unifying mind and may require two or more. But those situations are exceptional, and they pose challenges beyond what I’m thinking about today.)

The unifying mind might be found anywhere in the hierarchy, depending on the type of matter involved. At a law firm, the unifying mind can be a partner, if the matter is large and the partner a hands-on type. Or the unifying mind can be an associate charged with monitoring and tracking all events. But everyone on the team should know who’s at the helm, so everyone knows the person who should receive copies of correspondence, alerts about upcoming events, and reports about how things are going.

At an in-house law department, we, too, must have a unifying mind for every matter. In the litigation world, a corporation may have several line lawyers whose job is to supervise cases on a day-to-day basis. The line lawyer primarily responsible for overseeing a particular case should typically serve as the unifying mind for that matter. Outside counsel should communicate with that person, and everyone in-house should know that’s the lawyer to call if they need detailed information about a lawsuit.

That’s all fine in theory, but two things often screw this up in practice. What two things?

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Morning Docket: 04.09.12

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* The billable hour may be far from dead, but last year, 61% of general counsel worked out alternative fee arrangements with outside counsel, including counsel from elite (read: Biglaw) firms. [Wall Street Journal]

* Dewey need to take lessons on revenge from this firm? John Altorelli, the D&L defector who spilled all the beans to the Am Law Daily, was blasted on Page Six this weekend. More on this to come later today. [New York Post]

* CHECK YOU LATERALS: recent Quinn Emanuel hires William Burck, Paul Brinkman, and Andrew Schapiro, as well as name partner John Quinn, have entered appearances on behalf of Megaupload. [Am Law Daily]

* Copyright infringement suits over porn downloading involving some 3,500 defendants were dismissed because the plaintiffs’ attorney, Terik Hasmi, couldn’t get it in legally in Florida. [National Law Journal]

* In England, there’s no such thing as a no-fault divorce, but instead, you can get one for “unreasonable behavior” — behavior like malicious service of tuna casserole, and speaking only in Klingon. [New York Times]

* This gives “I’m a Slave 4 U” some new meaning. Britney Spears’s fiancé, Jason Trawick, is trying to start their impending rocky marriage off on the right foot. He’ll soon be her co-conservator. [New York Daily News]

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Inside Straight: If Law Don’t Get No Respect

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I recently heard a horror story from an in-house lawyer at another corporation. This may not sound like a horror story to someone who works at a law firm, but if you reflect for a minute, you’ll see the birds gathering on the monkey bars in the background.

Three people — one from finance; one from a business unit; and our hero, the lawyer — were speaking on a panel to a couple hundred people in a business unit. The business-unit panelist said something outrageous and brazenly illegal to the assembled group. Assume it was something like, “As you know, we simply ignore that law,” or, “It’s easier to raise prices if we just conspire with the competition.” You get my drift.

Our hero, the lawyer, involuntarily gasped into his (or her) microphone, “My God, Smith, you can’t say that! How many times do I have to tell you?”

Smith looked over, thought for a minute, and said to the assembled crowd: “That’s just Legal.”

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Inside Straight: ‘Flattery’ or ‘Lies’?

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When does permissible “flattery” become impermissible “lies”?

I’ll use three real-life hypos — situations that I’ve lived — to explore the question.

First: I was a partner at a law firm. The client had just hired a new, junior in-house lawyer to oversee (among other things) the set of cases we were defending. The client called an all-hands meeting. Four or five of us from the firm attended, as did the general counsel of the company, a couple of deputy general counsel, the global head of litigation, and the month-old, new in-house guy, who we didn’t yet know from Adam.

My senior partner spoke first: “Before we get started, I just want to say that [the new, junior in-house guy] is a great addition to your law department. It’s not often that you work with someone for just a few weeks and immediately know that you’ll be able to do better work, more efficiently, with the new person on board. But you did just that with this hire. Congratulations! What a great lawyer!”

The junior in-house guy was beaming ear-to-ear. Later, in private, your senior partner says to you: “That’s how you cement a client relationship.”

So, what do you say: Permissible (intelligent, praiseworthy) flattery? Or unethical lies?

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Inside Straight: On Being ‘Light’

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How do you keep a client (or a boss) happy? Be “light.”

Everyone has worked with people who are heavy, and everyone has worked with people who are light. Light is better.

You ask a heavy to do a job, and he says that he will. But you’re not at all sure that the job will actually get done. You call two weeks later to ask for a status report, and you receive back an ambiguous response about what’s happening. As the deadline passes, you ask for the finished product. It finally arrives, a couple of days late.

That’s a heavy load for you, the supervisor, to bear. Multiply that by eight direct reports (in a corporate law department) or 20 associates (working under your supervision at a law firm), and the burden is unbearable. All that heaviness crushes you, and, next time around, you go in search of light people.

What does it mean to be light?

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