In-House Counsel

Not The Droid You’re Looking For: Embracing Your In-House Counsel Limitations

You may not be not the droid your business partner is looking for, but at least you can direct him to the right planet.

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Alright, friends. Confession time. I’m not a securities lawyer.

For those of you who read this column regularly (first off, thank you. You’re awesome. And intelligent. Did I say intelligent? I meant genius.), this will not come as a shocker. I blissfully gave up public company counseling when I left Bigaw without so much as a backwards glance. Because despite being half-way decent at it, I despised it. To this day, the mere mention of an SEC comment letter makes me want to yark.

Serendipitous then, that I’ve always had the privilege to work at a place with a securities lawyer who does all of the annual and quarterly filings and handles those mind-boggling “does it require an 8-K” questions. Oh, and the proxy. Shudder, proxy season.

She and I get on famously, although I’ve always suspected she views my day-to-day in much the same way I think about hers: I’d rather clean up after a petting zoo on a hot July day with nothing but my bare hands. How could anyone do such a crappy, thankless job and still be a relatively cheerful person?

Alas, with our corporate transformation, we are now flush with business partners who are new to public company life and don’t quite understand the whole insider trading or material non-public information thing and are freaking out. In fact, we rolled out our code of conduct in January with the new insider trading training certification and it’s still Defcon 5 around here.

And because the securities lawyer doesn’t sit in the office I do, I field a lot of public company questions. Sure, I’m good for the talking points on what constitutes material non-public information and how to avoid being led away in handcuffs. I can even give several helpful examples with minimal hand gestures. But once we get into the bar-exam-level twists, I’m useless. For example, a business partner, who is always on the restricted list because of the nature of his work, recently asked if his twin brother, who lives in the adjoining apartment of a duplex owned in its entirety by both brothers, could still buy our company stock on the open market. I bet some of you reading this column know the answer to this off the top of your head. You smug people are not my people. But I’m adult enough to admit that I have no freaking idea. So, after a few facial contortions and a non-committal “something about this just doesn’t feel right, Carl,” I refer him to the securities lawyer.

My next public company crisis comes three days later when the securities lawyer is traveling for work. This guy, let’s call him RJ, needs assistance with a form 4 filing. Back in my Biglaw days, I seem to remember there were these three forms for employees who held more than 10 percent of the company’s stock. And I seemed to remember that filing these things was an enormous pain in the ass because of the two-day deadline to file them.

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RJ unfurls this incredibly complicated story involving a trust, a guarantor, and several beneficiaries whose name all start with J. This is no ordinary form 4. This is one of those ones that’s going to require a footnote to a table. Shudder. That realization immediately sets off alarm bells in my head as my thoughts harken back to Section16.net, this incredibly helpful website that helped associates figure this stuff out, and that I no longer have a subscription to. I politely shoo RJ out of my office so I can dig through Section 16 myself and after about 40 minutes, I determine I am in no way qualified to competently fill out RJ’s form 4.

Luckily, RJ insists on returning to my office so I can give him the good news in person. He’s going to have to wait for the securities lawyer to respond. Like any reasonable adult, RJ takes the news well. No, I’m kidding. RJ immediately turns red in the face and demands to know why I can’t help him with his legal problem. I tell him the truth (probably a mistake given that my explanation makes him turn the color of an eggplant): in terms of form 4s, this is over my head and it could result in a serious mistake that would likely have repercussions for him.

RJ’s response is classic. “I thought you were a lawyer,” he snorts.

And my tip of the tongue response is equally classic. “I assume you wouldn’t go see a foot doctor when it’s your ass that’s on fire, right? This is just like that. This is not my area of expertise. You need an ass doctor.” Of course, I don’t say this aloud because I’m a consummate professional.

While I covertly text the securities lawyer to see if this is indeed an emergency that needs her immediate attention, I fight down that creeping guilt and insecurity bubbling in my stomach. RJ is one of my business partners and he’s in need of assistance. I want to be the person to solve his problem. I’m not one of those lawyers who passes the buck. It stops right here in this office. But I also know this isn’t one of those situations where I don’t know the answer and can punt it until I have more information with a suave, “That certainly sounds like an intriguing proposition. We’ll need to circle up on internally before we can respond,” or something of the equally clever ilk. Section 16 filings have never been my thing and RJ’s situation is miles from cut and dry. In short, I’m annoyed and frustrated because I’m not the droid that RJ is looking for. At best, I can direct him to the right planet.

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But at least I know that, and I’m confident enough in my own practice to own that. Because I may not be the all-knowing droid that every in-house counsel aspires to be, but at least I’m not the droid that blows smoke up your Millennium Falcon’s thrusters. And that’s gotta count for something.

Kay Thrace (not her real name) is a harried in-house counsel at a well-known company that everyone loves to hate. When not scuffing dirt on the sacrosanct line between business and the law, Kay enjoys pub trivia domination and eradicating incorrect usage of the Oxford comma. You can contact her by email at KayThraceATL@gmail.com or follow her on Twitter @KayThrace.

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