The First General Counsel of a Company

This Wisdom of the Crowd, compiled from responses posted on various ACC Committee eGroups,* addresses the "Dos and Don'ts" for a company's first general counsel.

*(Permission was received from the ACC members quoted below prior to publishing their eGroup comments in this Wisdom of the Crowd resource.)

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DOS AND DON'TS FOR NEW GENERAL COUNSEL

Question:

I am new to in-house, and the small company I work for has never had [an] in-house attorney, so I'm kind–of feeling my way around in the dark. Other than the obvious do's and don'ts - does anyone have a checklist of sorts that I could share with my employer regarding those things I'm allowed to do as in-house vs. those that are prohibited or even frowned upon?

Wisdom of the Crowd:

Response #1: ACC just put this out a couple of weeks ago – InfoPAK: "Establishing the In-House Law Department: A Guide for an Organization's First General Counsel" (2012).

It's full of good advice and things to talk to your management about now before you get in a routine that may not be optimal. I've been the first in-house counsel twice now and it's definitely a different animal than coming into an established role. ¹

Response #2: I believe the critical issue is to make certain everyone understands "who is the client" and understand ABA Model Rule 1.13 (and its application in your state).

Chapter 3 of John Villa's Book "Corporate Counsel Guidelines" is a good summary of this and other issues.

The ACC Virtual Library has a wealth of other resources. Check out the July 2012 InfoPAK on establishing the in-house law dept. I also suggest looking at the presentations from ACC's Corporate Counsel University programs--they are geared to the new in-house attorney.

Also consider this ACC resource:

Quick Reference: "Counsel for Closely-Held Corporations: Top Ten Ways to Juggle Your Many Roles without Dropping the Ball" (2009) ²

Response #3: If your question is about ethical dos and don'ts as in-house counsel, you should probably consult ethics counsel at your bar association.

If your question is about integrating yourself into company processes, consider issuing new policies, such as: (1) signed contracts must be in place before transactions can be implemented, (2) the extent to which the business teams may (or may not) modify standard-form contracts without your prior approval; (3) no use of outside counsel unless it goes through your office. ³

Response #4: Management by walking around. Walk the halls and introduce yourself. Ask what kinds of projects people are working on, try to arrange to have lunch with department heads, director-levels—the people who will be calling you and the people you will need when you need the facts. If the company has an internal phone book with names and titles (I'm showing my seniority here) look at it from time to time to see who does what. And find out what people do for fun outside the office. You want to be able to establish a comfort level with people that will enable you to provide advice and guidance, which may not be pleasant for them to hear (you know sometimes we actually are the 'No' people) without them thinking ill of you personally. ⁴

Response #5: How long have you been practicing? The reason I ask is that it would seem if you've been practicing for quite a while as, e.g., a law firm associate or (better yet) a partner, then you know the practice of law was all about client relations and rain-making. It's no different in-house. You need to make yourself open and available so that the business people WANT to come to you for advice. Advice about the business, yes, but advice about anything. So "don't" send them a list of "dos and don'ts" that says "don't come talk to me about your personal legal problems." Because, frankly, you "don't" want to create that kind of barrier. If one of the guys at work happens to be well-known for being handy with fixing cars, for example, I'm sure he takes the five minutes every so often to listen to the co-workers ask "hey, my car is making this flubbledy whoop whoop sound" and he helps them try to figure out whether they can wait for the next oil change or whether (OMG!) call a tow truck and don't even attempt to drive any further than you did to get here this morning. Being the legal "shade tree mechanic" is no different. If the executives and staff trust you with their personal legal questions, then they obviously trust you (or are testing whether they can trust you) with the company's legal questions.⁵

Response #6: Adding on, although you don't have to worry about bringing in clients off the street, you still need to market yourself internally. I always say that my clients - whom I consider to be every other employee in the company (from a practical standpoint, not from a legal standpoint - remember, as lawyers, we are in the service industry) - have to know me, like me and trust me, otherwise they won't send me business (in which case I won't have a job very long).

I would also strongly encourage you to [view, once they are available online, materials from] the [2012] ACC Annual Meeting "bootcamp" session for new to in-house lawyers. (Full disclosure – I [spoke] on the panel with two other outstanding and experienced in-house attorneys.) ⁶

Response #7: I understand your feelings. Like you, I am the first in-house lawyer for my company's ownership group (they ran other companies without in-house counsel).

First and foremost, remember the two goals of in-house counsel:

1. Keep the company out of trouble.
2. Help the business succeed without running afoul of goal #1.

It is also important to develop relationships with your peers (i.e., us). Get involved in both ACC committees as well as your local chapters. If you can make it to Annual Meeting...GO! You will learn a lot (lots of MCLE opportunities) and develop a nice set of contacts that can be immensely helpful. There are some great ACC resources in the form of Docket Articles, Top 10's, and InfoPaks that are very useful. Take a look through them as there is a lot of wisdom in those documents! ⁷

Response #8: You might also want to read the article by D.C. Toedt, III, Robert Robinson, and Randy Segal: "G.C. Rules: Over 350 Things I Wish I'd Known My First Year as General Counsel." This article [is]on the ACC site …. ⁸

Response #9: I made a similar post a few months ago and received some great ACC resources. You can find the responses at: http://community.acc.com/ACC/eGroups/ViewThread/?GroupId=115&MID=27482 or if that does not work use the advanced search for my postings (under the name Stephanie Vincent, employer being Voith) and view the full thread.

Regarding what is prohibited or frowned upon, I would think for the most part it is similar to private practice's (law firms) rules and considerations, but with greater concerns on who you are really representing (Upjohn warnings, etc.). I would take the approach that you are the company's lawyer only and not the lawyer of any individuals within the company. Employees will come to you for advice (often on issues outside of your expertise) so I would recommend a clear rule now that you should not ever get involved or give any advice (other than referrals) so you do not run into any conflicts or malpractice issues later. The other legal issue I would mention is privilege. In the in-house role, you often become a combination of a lawyer and a business partner so you might want to start reading up on (or attending a CLE on) how to protect privilege and separate those 2 roles.

Those are the main legal topics that I can think of off the top of my head but if you want to discuss further or are looking for further non- just legal advice (setting up processes, defining your role, managing expectations, etc.), feel free to reach out to me. ⁹

Response #10: The articles on the ACC site contain good information, but I don't think they address one of the biggest challenges of being in-house: the sheer volume of work, from multiple business partners with competing priorities, covering a variety of substantive legal issues (many/most of which you will not be expert in), which you will be expected to address in a timely and economical fashion.

When I was a law firm associate I was trained to be right, every time, on every issue. That model doesn't work at my current company and, I suspect, would not work at most companies (in fact, it's not always the model I want to pay outside counsel for). My business partners operate every day in a world of incomplete knowledge, making decisions based on their expertise and experience; they expect me to do the same.

There is certainly some risk here. You have to know enough not to commit malpractice. But assuming you're clearing the malpractice bar, one key to success is to make sure you're not seen as a bottleneck. If you're a bottleneck, your business partners will simply bypass you, even if that's a violation of company policy. And your company will probably face greater legal exposure from you being out of the loop than from you seeking to be good (and responsive) rather than perfect (and slow). I once worked for a GC who said "it's more important that you're involved in 100% of the decisions and 80% right than that you're involved in 5% of the decisions and 100% right." It comes down to judgment. In my experience, you get better at it over time. And it's a tough balance: ultimately, you have to be willing to provide advice based on the information, time and resources available, without ever being seriously wrong. ¹⁰

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¹ Tanya Avila, General Counsel, Volusion, Inc. (July 25, 2012).
² Frederick Krebs, Senior Advisor, Association of Corporate Counsel (July 25, 2012).
³ Michael Stone, Attorney, In-Transition (July 25, 2012).
⁴ Stuart Senescu, Attorney, In-Transition (July 25, 2012).
⁵ Laura Vogel, Assistant General Counsel, The Auto Club Group (July 25, 2012).
⁶ David Susler, Associate General Counsel, National Material L.P. (July 25, 2012).
⁷ David S. Cohen, Director, Legal Affairs and Risk Management, Angels Baseball LP (July 25, 2012).
⁸ Isham Jones, General Counsel, American Veterinary Medical Association (July 25, 2012).
⁹ Stephanie Vincent, Associate Regional Counsel- North America, Voith Holding, Inc. (July 25, 2012).
¹⁰ Brendan McKeough, Assistant General Counsel, United Stationers Supply Co. (July 26, 2012).