General Counsel

Inside Straight: Managing People

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s column for in-house counsel, written by Mark Herrmann.

Managing people at big law firms is easy: You don’t!

First, you don’t have anyone to manage. As an associate, you have a secretary. That’s it. And you share your secretary with other people, so you have only limited responsibility for giving annual reviews.

As a typical partner, you also don’t have to manage anyone. You still have a shared secretary. And you’re asked to complete associate evaluation forms once every year, which you dutifully do. Some other poor clown is stuck with the job of reading to associates the results of the review forms and saying, “I can’t really answer your follow-up questions, because none of these comments are mine.” Unless you’re responsible for some unusual duty — evaluating contract attorneys, or legal assistants, or some such thing — a partner at a law firm doesn’t manage people at all. (Chatting with an associate about an upcoming meeting or event, or discussing the contents of a brief, constitutes either doing work or being human. It doesn’t count as personnel management.)

Second, “career paths” at law firms are no secret. The “career path” (such as it is) for a secretary at a law firm is fairly obvious, so your secretary won’t ask much about it. And the career paths for lawyers are obvious, too. If you’re an associate, work hard and do good work, and you’ll be a partner some day. (I’m not passing judgment on whether this path is realistic or not; I’m saying only that, to the extent that it exists, everyone knows what the path is.) If you’re a partner, your career path is equally obvious: Work harder, and do better work, and bring in clients, and you’ll be even richer and more important some day.

Nothing to it. Everyone knows the game, so managing people is a no-brainer. No muss, no fuss, and (if you’re like me) you don’t even notice that you’re not managing people. You might even deceive yourself into thinking that you are.

Would that it were so easy in-house….

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I, For One, DO NOT Welcome Our New Computer Overlords

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I should have written about this days ago, but the pain was still too near to me. The humans have lost to the machines. We might as well start digging towards the Earth’s core, where it’s still warm, and start building our own Zion.

Unless you’ve been living under a rock, you know the terrifying story of “Watson.” It’s a computer built by IBM that just kicked Ken Jennings’s ass on Jeopardy. If you are not particularly scientifically inclined, I can see how that might not sound like a big deal. You probably remember Deep Blue beating chess grandmaster Garry Kasparov and think that this kind of thing has been happening for a while.

That’s just what the machines want you to think. Teaching a computer to understand the subtle nuances of trivia — the puns, the innuendos, the ordering of information — is frightening. It’s a lot different than writing an algorithm that allows a machine to work through all possible chess moves and pick the correct one.

It makes you wonder: “What else could a computer be taught to do?” Over at the WSJ Law Blog, Ashby Jones wonders if the answer might be, “Your job”….

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The Highest-Paid General Counsel (Kind of)

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Russell Deyo has a big Johnson & Johnson salary

Corporate Counsel has released its annual list of the highest-paid general counsel in the land. The trend this year is a leveling-off, says Corporate Counsel, thanks to the recession and the belt-tightening that results from a greater transparency for executive compensation. The party slows down when the lights come on.

These GCs still managed to do well for themselves. At the top of the list is Russell Deyo, of Johnson & Johnson. The Georgetown ’75 grad has been with the company for 25 years, having joined in 1985 as a regular old staff attorney. His salary is a mere $831K, but he rakes in millions in bonus money.

Who topped the list, and how much are they making?

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Salary Scale and Recession Survival Tactics for In-House Counsel

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The appeal of working in-house is two-fold: decent hours and decent $$$ enough money to live on. How much money exactly? A new survey out from legal recruiter Laurence Simons (gavel bang: WSJ Law Blog) has the median salary ranges for those in-house, with experience ranging from zero to 21+ years. It’s six figures throughout, but barely in those baby years.

As we’ve noted before, salaries in-house remained flat in 2009. The Global Salary and Benefits survey [PDF] included responses from 1900 in-house lawyers world-wide, and breaks its results down by country.

Corporate Counsel reports that bonuses were uncommon in-house in the U.S. last year, so base salary reflects fairly reliably what these folks actually made last year. So what do those base salaries in-house look like?

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Musical Chairs: Frank Barron Leaves Cravath for Morgan Stanley

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It’s not every day that a partner leaves the storied firm of Cravath, Swaine & Moore. But it’s not every day that a suitor with comparable prestige, wealth, and WASPiness comes calling. Dealbook reports:

Morgan Stanley said on Thursday that it has hired Francis P. Barron, a partner at the law firm Cravath, Swaine & Moore, as its chief legal officer. Mr. Barron will replace Gary G. Lynch, who will remain with Morgan Stanley as a vice chairman in London…. The hiring is the latest management shake-up under James P. Gorman, Morgan Stanley’s chief executive since the beginning of the year.

At Cravath, where he has worked for 32 years, Mr. Barron specialized in litigation, corporate matters and advising boards. Among his clients are financial firms like Morgan Stanley, Citigroup, UBS and Goldman Sachs, as well as General Electric.

Moving from a law firm to Wall Street isn’t uncommon. On New York magazine’s recent list of hottest Wall Street bachelors — co-authored by Bess Levin, of our sister site Dealbreaker, and Jessica Pressler — two out of the 15 “foxes of finance” have law degrees (one from Harvard and one from Seton Hall).

A move at this high a level, from a Cravath partnership to an investment bank, is less common. But such moves happen — and, interestingly enough, Frank Barron isn’t even the first ex-Cravath partner to wind up in a top position at Morgan Stanley….

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In-House Counsel v. ‘Outhouse’ Attorneys

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If the professional world were a zoo, Biglaw attorneys and in-house counsel would be kept in separate cages. They live in distinct environments and, according to a group of general counsel at the InsideCounsel SuperConference, have very different characteristics.

GCs from Kaplan Higher Education, Navistar, and Johnson Controls got together for a panel about building great in-house teams. It started with some general advice: Ask for writing samples from applicants, don’t hire applicants who use “I” during their interviews, and help to develop your workforce.

“Attorneys don’t tend to be precise and concise when they talk,” said Janice Block of Kaplan Higher Education. She has training sessions to help new hires improve their communication skills, so they can explain what they do for the company if they get stuck in the elevator with the CEO, for example.

Not surprisingly, companies are getting tons of applications for in-house positions these days. “In a market like now, we have lots and lots of people interested in joining the company,” said Jerry Okarma of Johnson Controls, a technology company based in Wisconsin. Attention, diverse candidates: “We have a hard time finding African–Americans in Milwaukee,” said Okarma.

People at the conference told me they’re seeing some amazing résumés cross their desks. People with 20 years of experience are applying for the lowest-level in-house jobs, said one in-houser.

But note well, law firm types: your experience might be a strike against you. The GCs in this session said they look at candidates with in-house experience first, and then to those with law-firm experience. One GC referred to law firms as the “outhouse.” The session included a fair amount of harping about how the animals are trained in the Biglaw outhouse…

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So You Wanna Be a General Counsel?

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The last day of the InsideCounsel SuperConference started with a Supreme Court star, hot cars, drugs and, um, insurance. On Wednesday morning, superstar litigator Ted Olson interviewed three of the nation’s premier general counsel: David G. Leitch of Ford Motor Company, Deborah Platt Majoras of Procter & Gamble, and Michele Coleman Mayes of Allstate Insurance.

(The session also functioned as a kind of George W. Bush administration mini-reunion, given Olson’s service as Solicitor General, Majoras being the former chairman of the Federal Trade Commission, and Leitch’s experience as White House deputy counsel.)

Olson asked the right questions, and these three gave candid answers. A partner at Gibson Dunn, Olson asked a question near and dear to many of our readers’ hearts: “What do you look for from outside counsel?” Olson asked them to talk about other factors than the oft-discussed “low rates and alternative fees.”

  • Good communication. “Tell us how we can help solve a problem and not exacerbate it. Tell us like it is. Too often, I feel like firms are managing me like a client. Firms never tell us, ‘I’m not as good at this – someone else might be better,’” said Mayes.
  • A point of view. “Give me the advice. Firms think they do this. But actually, firms want to explain the law, give some legal thoughts, and then let you decide. I want you to understand our business enough, that when you give me legal advice, and we discuss it – it’s not usually yes or no, if it were that simple, we’d do it ourselves – but I want you to have a point of view. Too often, outside lawyers don’t have that,” said Majoras.
  • Candor. “Just be candid about what we’re doing, what your limitations are, what your advice is,” said Leitch.
  • Appreciation for how their business operates. (Though this actually got into the forbidden topic of $$$.) Leitch knows he has a target on his back as a GC with a big litigation budget, but he’s cut his legal staff by 40% and is watching life-long Ford workers get laid off. “When I’m seeing people who have been at Ford for 40 years be laid off, and you’re going to call me that day and argue about whether your fee is $500 or $550, I just can’t deal with that,” said Leitch. “Know my business; know that our lawyers have gone without bonuses for the last two years.”

What if you don’t want to work for a GC, and you’d rather be one yourself?

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Many In-House Counsel Are Social Media Savvy. But Biglaw Firms? Not So Much.

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There are a number of firms that aren’t up to speed with this whole “social media thing.” But they should be, because their clients are.

American Lawyer Media, Zeughauser Group and communications firm Greentarget surveyed 164 in-house counsel about their social media habits. Lo and behold, they are making use of blogs, Twitter, LinkedIn and Facebook to get their legal information… and, perhaps more interestingly, to judge law firms.

In-house counsel still primarily rely on “referrals from trusted sources and credentialing activity (i.e., demonstrations of thought leadership)” to choose outside lawyers, but they are increasingly taking brilliant tweets and blog posts into consideration…

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Career Alternatives for Attorneys: CEO

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Good news for general counsel who dream of one day sitting in the king’s seat: the ABA Magazine says there is a new trend of corporations tapping lawyers to become top executives:

Nine of the Fortune 50 companies now have a lawyer as chief executive, up from three just a decade ago. In December, Bank of America and Continental Airlines became the two most recent publicly traded corporations to do so. Also in 2009, Citigroup named Richard Parsons, another lawyer, as its chairman, which is separate from the CEO.

Business leaders and corporate headhunters agree that the JD is once again an alternative to the MBA as the degree of choice for CEO candidates, and that the trend is very likely to increase over the next decade.

Woo-hoo. Maybe law school grads will start kicking biz school grads to the curb. Vanderbilt’s management school dean goes so far as to call the J.D. a “renaissance degree.”

According to the ABA Magazine, one law school is particularly successful in sending its grads off to lead a company instead of doing bet-the-company work….

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General Counsel Flex Their Muscles

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Biglaw needs to take a page out of the Burger King playbook and adopt a “Have It Your Way” attitude with its general counsel clients, according to a new study. In the words of the ABA Journal:

The recession has driven a power shift that now favors in-house counsel over the law firms they hire, a new report [PDF] has found.

About 75 percent of general counsel and law firm partners said the balance of power now lies with law firm clients, according to the report (PDF). A majority of both groups believe the power shift will be permanent.

We’re hearing more and more often from general counsels about the hot new trend of cutting back drastically on the number of outside firms they work with. The most dramatic example of this came from Levi Strauss, which slimmed its outside legal counsel down to size two.

The report says that 73% of GCs surveyed “admitted to either changing or reducing the number of their external legal advisers as a result of the recession.”

The 13-page report was commissioned by UK-based law firm Eversheds, but looks like it was designed by Barbie — lots of bubbles, and generous use of the color pink. It promises the death of the pyramid law firm structure and the move to “value billing.” It’s pretty, but is it substantive?

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