The General Counsel In Residence: A Law Firm Addresses Change In The Corporate Counsel Arena

Sunday, April 1, 2007 - 00:00

Editor: Mr. Garrett, would you tell our readers something about your background and professional experience?

Garrett: After earning my B.A., M.B.A., and J.D. degrees at Columbia, I received my basic training in corporate and securities practice at Donovan Leisure and two smaller law firms in New York City. Thereafter, I went in-house, serving for 22 years as Associate General Counsel of Coopers & Lybrand, followed by three years as General Counsel of a global division of Swiss Reinsurance Company. In the wake of the September 11th terrorist attacks, I changed course and created and managed one of the most successful nonprofit initiatives for the benefit of the survivors of the victims of the attacks, The Gift of New York. When The Gift completed its planned two-year life, I changed again by joining a boutique management consulting firm advising large organizations in the areas of strategic planning, cultural integration, and organizational alignment and effectiveness. In addition, for many years I have been a member of the governing board of the Greater New York Chapter of the Association of Corporate Counsel. I have also been very active in Columbia alumni affairs, and, among other things, I am currently serving as an executive mentor at the Business School and as President of the Society of Columbia Graduates.

Editor: How did you come to Nixon Peabody?

Garrett: I was introduced to a partner at Nixon Peabody by a fellow ACC board member. The general idea was to implant the viewpoint of a seasoned general counsel into Nixon Peabody's client relationships, client service, and marketing. Nixon Peabody was immediately attracted to the concept. While the legacy firms that comprise Nixon Peabody enjoy long histories, the combined firm has a new, confident and cohesive culture that embraces change in the legal environment - and with clients - as a constant. With about 700 lawyers in 16 offices, the firm is large enough to play in any arena, but not so large as to lose the human touch. Accordingly, the firm has just been named, for the second year in a row, one of the 100 Best Places to Work by Fortune magazine - one of only five law firms on the list.

Editor: The position of general counsel at a law firm is relatively new. Would you tell us about the origin of this position? Why would a law firm - which is, after all, a repository of vast legal talent - look to have an in-house legal presence?

Garrett: The general counsel of a law firm addresses a variety of issues that arise in the firm's practice, including conflicts of interest, scope of practice and ethical issues. As law firms have grown, and the issues they handle have become more complex, these types of matters have been directed to their general counsel.

"General Counsel in Residence" is entirely different: it refers to the presence in a law firm of someone with a strong general counsel background for the purpose of providing a resource for the firm's general counsel communications and relationships, its marketing strategies and its client service generally, with an eye to being responsive to the needs of the firm's most important audience: the post-Sarbanes-Oxley corporate counsel. While other firms have expressed concern about general counsel relations, to my knowledge the General Counsel in Residence position is unique to Nixon Peabody. The firm created this position on the basis of three important observations:

With the onset of Sarbanes-Oxley in 2002, and the increase of prosecutors' and regulators' use of the Federal Sentencing Guidelines as an offensive weapon, the organizational authority, responsibilities, and potential liability of general counsel have been transformed.

Over the same period, surveys and anecdotal evidence from in-house counsel uniformly show marked year-to-year increases in dissatisfaction and frustration with outside counsel.

While generally aware of what is underway, many outside law firm practitioners are still preparing for, and speaking and listening to, the general counsel they knew in the past. As a consequence, they often miss crucial messages. All too often the client concludes that outside counsel "just don't get it," that "their speaking and listening is out of synch with mine, and therefore I cannot fully rely on them."

Understanding the issues that flow from these observations is the province of people with extensive general counsel experience. As my old boss used to say, "Practicing for ten years in a law firm doesn't make you a general counsel any more than spending ten years in a garage would make you a Porsche." The law firm world and the general counsel world are farther apart then they were in the past. A General Counsel in Residence is meant to bridge between those worlds lest a chasm of misunderstanding develop.

Editor: What are your responsibilities as General Counsel in Residence at Nixon Peabody?

Garrett: The position of General Counsel in Residence at Nixon Peabody is a work in progress, so I cannot describe its final form. I am fairly confident, however, that it will encompass the following:

Mentor, coach, and train partners, associates, practice groups, client service teams, and practice offices with respect to the current thinking of post-Sarbanes-Oxley general counsel.

Participate in strategizing, creating and presenting proposals to both new and existing clients.

Consult with particular partners concerning their service to the general counsel of particular clients, with an eye to expanding the depth and scope of the firm's service to these clients.

Confer, as requested by partners, with the general counsel of the clients of the firm.

Take on assignments for client general counsel that may be particularly appropriate for someone with an extensive general counsel background.

Present the General Counsel in Residence concept, premised upon the commitment of Nixon Peabody to optimize communication with its clients' general counsel, to appropriate audiences.

Editor: Why is this concept so important? What has occurred in the world of in-house counsel that makes this an idea whose time has come?

Garrett: I believe that the general counsel's role as the consigliere of the CEO in the overall interests of the shareholders is a distant memory. Today general counsel reports - and certifies the efficacy of the company's legal posture - to the board of directors, to the audit and other committees of the board and, indeed, to the courts, the SEC and the Department of Justice as well. In addition, in most companies the general counsel has substantial responsibility for the compliance and regulatory structure of the company and for the processes by which it operates. If you add to this job description a substantial degree of responsibility for enterprise risk management, the result is a position - that of general counsel - that has been transformed from a collegial member of the senior management team who provides privileged advice and supervises a few litigations and transactions to a position charged with enormous responsibility for legal risk and with little help in terms of staff and perhaps less in the way of the esteem of his or her colleagues for shouldering that responsibility. A somewhat emasculated attorney-client privilege and a similarly diminished work-product doctrine contribute to the distress of general counsel today.

Editor: What are the implications of these changes for law firm lawyers?

Garrett: If general counsel at the firm's clients have been through this transformation, law firm lawyers cannot continue to act as if it had not taken place. They must relate to general counsel as he or she is now, and if general counsel is not as user-friendly as in the past, the response ought to be supportive and sympathetic, not defensive. It is essential for law firm lawyers to convince general counsel that they constitute a practical and well-informed extension of general counsel's priorities, whether business, organizational or political. That includes supporting general counsel by providing clear, well-reasoned and concise alternatives and by challenging general counsel, when necessary, if his or her thinking appears to be heading in the wrong direction.

Editor: One of the principal themes of our publication is partnering between law firms and the corporate law departments of the clients they serve. "Partnering" can mean a number of things. In the context of the corporate America that has emerged since the scandals and Sarbanes, what do you mean by the term?

Garrett: Partnering is a marketing clich that has lost its meaning. In my view, general counsel are not looking for lawyers who wish to be their partners so much as attorneys who will accomplish for the general counsel a variety of difficult tasks in an environment where scrutiny can be harsh and unforgiving. In addressing the disputes and transactions that fall to general counsel, they seek the support of law firm lawyers whose view of collaboration is being an extension of the general counsel's thinking in navigating a larger strategic arena than was the case even a few years ago. This, I submit, is the emerging agenda at many corporate legal departments.

Editor: I gather that part of your mission at Nixon Peabody is to educate the firm with respect to this emerging agenda. How do you see this discussion proceeding?

Garrett: In these early months, I am visiting each office and each national practice group for the purpose of introducing myself as a resource for addressing the new reality of the law firm-general counsel relationship. That entails designing and then delivering training, mentoring and coaching; advising with respect to presentations and proposals to general counsel; and, where appropriate, meeting with in-house counsel to discuss ways in which the firm can address his or her needs.

General Counsel in Residence is a new business model, and I think the members of a profession noted for its cautious and conservative views look upon it with a reasonable degree of skepticism. My welcome at Nixon Peabody has been very warm, however, and many of the firm's lawyers have been intrigued with the concept and expressed their support for my efforts. We are confident that the General Counsel in Residence program will enable the lawyers of Nixon Peabody to optimize their relations with the general counsel of the firm's clients, and become more constructive and broad-gauged advisors to our clients.

Editor: Is there anything you would like to add?

Garrett: Nixon Peabody's New York City offices are located at 437 Madison Avenue between 49th and 50th Streets. My telephone number is (212) 940-3743. I would be delighted to discuss these issues further with your readers.

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