Modern Counsel #5

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DESTROY THE MOVIES. How Steve Fabrizio is fighting organized crime at the highest level P112

WHERE LEADERS IN CORPORATE LAW SHARE THEIR STORIES. For editorial consideration, contact




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“We respond to the bullets whizzing by our heads, but we will also prevent the same bullets from whizzing again.”


“We believe in approaching claimants with empathy— apologizing and, where appropriate, admitting our mistakes.”


“We get the benefit of [partner-level, big-firm] experience while saving tens or even hundreds of thousands of dollars.”


“I know that perception is reality, and we need to explain our views so that people aren’t afraid of the innovations we develop.”


“I didn’t know how a lawyer masquerading as an actor would be received.”

cover photo: and TKTKTKTK this page: Caleb Fox








A series of serendipitous events leads to success


Balancing act: prioritizing business without giving up creativity


Experience and integrity pave the way for the next generation of business leaders


Quiet examples speak volumes for social justice Redefining gender and leadership roles


Changing the landscape of payment processing

How to keep grounded, even when business is unpredictable

One transaction triples the workforce and doubles the market


Building an industry leader through choice acquisitions


The next big thing in music streaming


Getting in front of litigation with a proactive approach


Common ground with plaintiffs reduces time, costs, and hard feelings Best practices to create winning outside counsel teams




Unique outreach strategies for better shareholder relations


Managing cost with go-to outside counsel


Partnering up to build a world-class ballpark




Rapid expansion requires strategic business models









One attorney navigates the world of international law through trust

55 MERCK & CO.




66 An IP program unites a global company

Facilitating on all fronts: how an attorney enables teamwork

Import duties: building the American arm of a Korean company

pictured, left to right: Michael Freeman, Target Field, Amy Hancock, William Thro




Adapting a legal mind-set for larger leadership



Casting a shadow of honesty and respect



Singing the praises of legal’s support staff


Lessons learned moving from prosecutor to in-house counsel


Leveraging the lost art of authenticity


America’s beverage makers lead the vanguard against childhood obesity


Taking cues from viral marketing to educate employees

The quest for a World Series doesn’t end at home plate Securing top-notch counsel at a fraction of the cost


Attorneys step up to shape policy and strategy




Meeting the challenges of a global business Leading a team with grace and tenacity even when the going gets tough


The first 100 days: how to take stock and set a precedent in a new role

The controversial company takes ownership of its image



How the movie industry is confronting organized crime

Keeping a 150-year-old promise in the face of generational challenges


Tackling compliance at a cultural level


What overtime policy could mean for restaurateurs


photos by: Caleb Fox, Brace Hemmelgarn, Caleb Fox, Mark Cornelison

Businesses bear the burden of overly complex government regulations


Finding responsible and responsive ways to serve baby boomers


Distilling the complexities of a publicly traded, family-owned business


Are banks indispensable to our future?

CONNECT 152 Modern Counsel is a

networking platform, creating a space for you to reach out to other lawyers featured in this issue to make real-world connections.







Managing Editor Michelle Markelz

Guerrero Howe, LLC

Director of Accounts Becky Biske

Associate Editors Mary Kenney Tony Ho Tran Correspondents Matt Alderton Melissa Anders Kristen Bahler Zach Baliva Brian Barth Topher Bordeau Jaylyn Carlyle Peter Fabris Amanda Garcia Anthony Kaufman Russ Klettke Kelli Lawrence Jessica Montoya Coggins Bridgett Novak Urmila Ramakrishnan Julie Schaeffer Jeff Silver Melissa Silverberg

CEO Pedro Guerrero Managing Director of Operations Cassie Rose Managing Director of Marketing Sean Conner Reprints & Circulation Director Stacy Kraft Client Services Director Cheyenne Eiswald Senior Client Services Manager Rebekah Pappas


Recruitment Director Elyse Glab

VP of Production / Creative Director Karin Bolliger

Managing Director Philip Taylor Underwrites Director Justin Joseph Associate Director of Account Management Stuart Ziarnik Content & Advertising Manager Christina Brown Associate Director of Advertising Jessica Holmes Senior Sales Executive Matt Klancic

Financial Analyst Mokena Trigueros

Designer David Owens

Finance Client Services Coordinator Katie Richards

Photo Editor / Staff Photographer Caleb Fox



Receptionist Amanda Paul



For a free subscription, visit Printed in China. Reprinting of articles is prohibited without permission of Guerrero Howe, LLC. For reprint information, contact Stacy Kraft at 312.256.8460 or

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Editor’s Note: In our July/August/ September 2015 issue, we incorrectly reported Luxottica Group SpA’s share of the eyewear market. We regret the error. Find the corrected article on p. 104.


Modern Counsel® is a registered trademark of Guerrero Howe, LLC.



Last issue, Advocate Health Care’s Eric Tower astutely said, “We can’t view what we do as what we did yesterday.” This could not be truer in health care, where the industry is consolidating and responding to continuous regulatory changes. But Tower’s statement is true for any business, and it’s the philosophy of exceptional organizations. Steve Fabrizio brought that perspective to the Motion Picture Association of America (MPAA) and is using it to rein in what he calls “organized crime at the highest level.” Fabrizio contributed to the music industry’s landmark courtroom win against Napster in 2001. Despite that favorable outcome, Fabrizio doesn’t deny the music industry took a hit from which it hasn’t recovered. That’s why he’s not resurrecting old strategies to fight online film piracy. His adversary has evolved, and so has his plan of attack. See how he’s adapted on p112. Fabrizio’s ability to reassess and regroup is what sets the corporate counselor apart from the private practice lawyer, and it’s what you’ll see exemplified by the attorneys in this issue. At Walgreens, Michael Freeman (p50), is

doing work on the front end to forgo litigation when he can find common ground with plaintiffs. At Maxim Integrated Products, Mary Fuller (p59) saw an opportunity to unite a global company with an IP strategy and went on a world tour to accomplish it. In Minnesota, no amount of complexity could deter Mary Giesler (p66) from closing the deal on the Twins’ new stadium—not even 114 unique vertical land tracts under the same roof. And at NRG, Michael Bramnick (p127) is confronting the nebulous boundaries of the compliance function from a cultural level and accepting new challenges as opportunities. Few of you grew up with ambitions of being corporate attorneys. I’m willing to bet you were not inspired by a TV show whose protagonist was a GC. But somewhere along the way, you were gripped by the drama of business—the pragmatism, the relationship-building, the question whose answer isn’t buried in a law school textbook. As the role of in-house counsel evolves, stories like Fabrizio’s and those of his peers may not be the stuff of Perry Mason, but they’ll be the trademark of truly valuable counsel.


photo: Caleb Fox




“My own life has helped me understand what we all go through outside of work. We all have our own crosses to bear. I don’t try to accommodate that—I try to leverage that to benefit everyone.” – RICK MCMURTRY, TURNER BROADCASTING




APPEAR It’s good practice to leave work at work, but there’s something to be said for bringing your whole self to the office—including the baggage, hidden talents, and personal experiences that shape each of us. When we trust others, it encourages them to reciprocate that trust and makes for better teams, greater authenticity, and more honest communication. In this issue, attorneys from Experian, Boehringer Ingelheim, and Turner Broadcasting show us what can happen when you create an open environment.

INQUIRY Is your work environment conducive to authenticity? If not, how can you foster it? How can the backgrounds of each member of your team create better outcomes for your business?

Steven Snyder’s book Leadership and the Art of Struggle offers strategies for accepting challenges as opportunities. His experience as a CEO and executive coach illustrates how not just to survive adversity, but to thrive because of it.

JOIN US ON LINKEDIN. Share your thoughts and find out what others are saying.




Connecting the Dots Hiro Tachibana landed in the United States when he was 16 as a foreign student. Since then, he’s been able to explore many facets of the law thanks to mentors and a series of coincidences

Milestones and Mentors Reflecting on his legal career, Tachibana says he’s blessed to have had the opportunity to work with leading mentors and entrepreneurs. “Business is not exciting in itself,” says Tachibana. “It’s the specific things that a company does that are exciting.” Tachibana is excited to have pioneered in interactive television at Diego, led the industry in semiconductor design licensing at MIPS, and now to provide leading interactive entertainment through video games at Capcom. “I feel fortunate to have been able to pursue my passion with my legal skills. This practice brings me back to being a lifelong learner.”


At 16 years old, Hiro Tachibana did not want to spend the rest of his schooling memorizing facts. He wanted to be a lifelong learner. That became his inspiration to move to the United States from Japan, and it started a series of coincidences that would take him all the way to Capcom. Although typical Japanese schools focus their curricula on test preparation, all Kobe Japanese High School freshmen were required to read Freedom and Discipline, by K. Ikeda. The book tells the story of a Japanese student’s experience at a United Kingdom boarding school. “The book planted a seed in my mind that there was a different way of learning and student lifestyle,” says Tachibana, who read the story at the height of the Vietnam War in 1969 amid student riots and protests. His older brother was encouraged to study abroad, and he told Tachibana about the American education system. “That is when my desire to go abroad and study became even more intense,” he recalls. Around the same time, the headmaster of Suffield Academy in Suffield, Connecticut, sent a letter to Tachibana’s school asking if anyone would be interested in studying abroad. Despite his mother’s worries about him living abroad, Tachibana was one of several students who applied and was accepted to the American school. He took his 10



admittance as a sign that he had to go. “That letter fell down from heaven,” says Tachibana. “My two years at Suffield shaped my life in a lasting and profound manner.” When Tachibana first arrived at Suffield, he was not able to speak English well. By the time he left, he had become fluent and had mastered the ability to take courses in the language. “What saved me was the good math education I had in Japan,” says Tachibana. “For all the faults of the Japanese education system, it did have much stronger methods of teaching math and science, resulting in more advanced coursework.” So even though he had a difficult time studying English literature and US history, and classroom discussions were fuzzy, Tachibana knew the substance. “That was my foundation for becoming a good student at Suffield.” Tachibana fully immersed himself in the American high school experience. In two years, he made friends that he still keeps in touch with today. His tenacious attitude, perseverance, and persistence to pursue a different type of education provided the foundation for his life, both professionally and personally. This philosophy is something he has handed down to his own children. “I was a rebel in the pursuit of education,” he says, “and I want my children to be the same.”





After graduating from Yale with bachelor’s and master’s degrees in applied mathematics, Tachibana is accepted to the University of California Hastings College of the Law. His mother nudges him to switch from a career in math and science to one in law. “I didn’t think law was a good thing for me, but after having done this for 30-plus years, I thank my mom every day for suggesting this career,” says Tachibana. “She passed away 13 years ago, but there isn’t a morning that goes by that I don’t think about her.” Tachibana works in tax law after graduating from New York University School of Law with a master of laws degree in taxation. Fujitsu America general counsel Tom Duffy decides to take a chance on Tachibana. Duffy, who went on to become Fujitsu’s global chief legal officer, guides Tachibana through the nuances of commercial law. “One mundane example was knowing how to draft commercial and licensing documents,” says Tachibana. “I’d always invariably ask him what template or precedent I should look for. He always smiled and said, ‘You have to think what needs to go into the agreement. Just don’t start out with a template. You have to think what parameters the agreement needs before


drafting.’” With Duffy’s guidance, Tachibana became very involved with joint ventures and acquisitions. ••







Tachibana leaves Fujitsu for MIPS Computer Systems, a pioneer in microprocessor technology, cofounded by Stanford professor John L. Hennessy, who became President of Stanford. Tachibana reports to thengeneral counsel Joseph Sweeney, who guides him in licensing computer and microprocessor technology. Tachibana joins Fenwick & West. He expands the leading Silicon Valley law firm’s Japan practice. Tachibana climbs the ranks to make partner, thanking four people for that accomplishment: the late Henry West, Gordon Davidson, David Hayes, and Mark Stevens, all leading Silicon Valley lawyers. With a large international practice, Henry West taught Tachibana how to effectively work with major Japanese clients.


Results you need.


Tachibana moves forward in his career as general counsel for Digeo, an interactive television technology provider founded by Microsoft cofounder Paul Allen. Tachibana is reunited with CEO James Billmaier, who worked with him at MIPS. “Digeo was an eye-opening experience because I had the opportunity to work with Paul Allen and his empire and gained great experience in working with a storied technology visionary,” says Tachibana.

Relationships you want.


Value you demand.

MAY 2010

Tachibana joins Japan-based video game company Capcom. Though its parent company is headquartered in the OsakaKansai region of Tachibana’s roots, he joins its Silicon Valley office. Video games are the synthesis of leadingedge hardware and software technology combined with graphic art and literary and musical creation. At Capcom, Tachibana pursues his creative passion in the convergence of law, technology, and liberal arts. “If you strip down everything we do at Capcom, the core of our business is the commercialization of intellectual property rights,” says Tachibana. He looks up to Capcom’s founder and CEO Kenzo Tsujimoto, a leading global entrepreneur who, he says, understands what it means to build and run a thriving company that can withstand the test of time.

(p) 913.777.5600 1. Although US history was not an easy subject for Tachibana, his history teacher at Suffield, Mr. Hall (left), was one of his favorites. “He completely changed my views on history,” Tachibana says. 2. Suffield’s advisor to foreign students (right), Mrs. Powell, helped Tachibana acclimate to a new school and new country.


3. Tachibana graduated from the University of California Hastings College of the Law in 1981, but were it not for his mother’s encouragement, he might have pursued math and science.




Curtain Call





for the

Right Brain Experian’s David Strauss had his share of courtroom dramas and stage productions before he played the role of in-house counsel. In his own words, he soliloquizes a career balanced by right- and left-brain pursuits AS TOLD TO URMILA RAMAKRISHNAN // PHOTOS BY CALEB FOX




The Ham I’ve always had an acting itch that I’ve struggled to scratch. Back when I was a teen growing up in Milwaukee, I would take my parents’ seats at the Milwaukee Repertory Theater and witness amazing performances. I’m sure that was partially responsible for my interest in improvisational theater, which I did in high school. Acting exhilarated me, but I was worried such pursuits might be ridiculous for an otherwise academically minded student. Nonetheless, my freshman year at Duke University, I successfully auditioned for an advanced acting class that consisted of aspiring theater majors—and me. It was a steep learning curve because my credentials and talent paled in comparison to some of my classmates, many of whom had been acting since they were quite young. Perhaps we weren’t of the same caliber, but jumping into such serious acting taught me a lot about confidence, and I definitely had some pretty solid performances during the year. Laying Down the Law As I explored possible careers, I ultimately gave into my left brain. Going to law school was initially a stepping-stone to buy time while I thought about other possible careers. I was convinced I could use a law degree for many opportunities. Little did I know that my pursuits would begin and end with practicing law, for the most part. I started my legal career in private practice as a litigator, thinking that perhaps “performing” in the courtroom would cure my acting ache. I enjoyed the practice for a number of years, though I was often frustrated by the silly gamesmanship of the discovery process. Fast-forward to 2002: I was at Wallace Computer Services, Inc., initially recruited to run litigation. I eventually expanded my practice with the company to general counsel. When it went through a major senior management turnover, I was handed a severance package that spanned the summer. It struck me that it might be fun to reengage on the acting front. I started taking theater classes at a professional theater company called Apple Tree and then got into classes at Piven Theatre, which was started by Jeremy Piven’s parents and has nurtured actors like the Pivens, the Cusacks, Aidan Quinn, and Kate Walsh. Long story short, I started working the rust out, though it was hard to shake the left-brain tendencies and free up the creative side. At one point, my classmates dragged me to an audition for a 14



professional show at Apple Tree. I was the one among us who ended up getting cast in this old Eugene O’Neil play that I had never heard of. I played several characters in “Anna Christie” that fall. The show’s run lasted about a month, and I was the only nonprofessional actor in the show. I didn’t know how a lawyer masquerading as an actor would be received, but the cast was very accepting and took me under their collective wings. It was great fun. I can always say that I was a paid actor! First-Time Jitters My first night on stage was exhilarating. There was a lot of physicality with these parts. I remember at the start of the show I played a mailman who was going to a bar during his mail route. I did little things that actors do to get relaxed and more into character—like run up and down the steps of the theater building before I had to go on stage to actually make it seem like I was at the end of a long mail route. I was out of breath and sweating, but it worked for the part and calmed me down. For another part, I played a sailor who gets rescued after being tossed overboard. Before emerging on-stage, I had to jump in a shower with my clothes on—drenched head-to-toe—to make it look like I had been adrift at sea. And I got to spit up water all over the stage! Right Brain or Left? Toward the end of the show’s run, I was applying more seriously for law jobs. I was also auditioning for a lead role in a new play. I got the part, and, of course, the next day Experian called me with a job offer. I realized I couldn’t commit to such a demanding acting part while starting a new job. I’ve been practicing law ever since. Of course, I wonder what it might have been like if I had continued my thespian pursuits. Acting has definitely given me a great creative outlet and also confidence that I continue to use in my legal practice. Scratching the Itch The theater itch is still there, but now I scratch it by being on the board of a nonprofit called Erasing the Distance. The organization destigmatizes and educates about mental health issues through professional theater. We use some of Chicago’s very best actors and perform the true stories of those impacted by mental health issues. I’ve been on the board for the past 10 years or so and just stepped down as board president.


David Strauss on the demands and ethics of data privacy while working at a global information services company Modern Counsel : What is your role at Experian? David Strauss : I engage in a general counsel role for multiple business units at Experian. Plus, I wear the hat of chief intellectual property counsel for our North America business. I see all the types of legal matters any large business faces and truly never know what the next phone call or e-mail may bring my way. I’d have to say that data privacy is the most dynamic area of my practice. MC : Why are data privacy and the ethical use of data so important in today’s world? DS : “Big data” is the term most people hear these days. In my world, it boils down to the slicing and dicing of consumer data to better understand consumer interests and behaviors. Consumer data has become a very valuable corporate asset. We are generating astronomical amounts of data as consumers these days, driven in large part by the online world. As companies get smarter, this data is increasingly richer and more predictive. Acquiring and using the data responsibly is of utmost importance. Consumers have to understand and trust that their data is being used for benefit and not detriment—or, as we say, “using data for good.” Privacy has always been essential to Americans, but so is free enterprise. My job is frequently at the intersection of these core pursuits, and I want to make sure they exist harmoniously. MC : What are the biggest challenges in working with big data and privacy? DS : Unlike some areas of law that have been around for a long time and don’t change that much, such as maritime law, the realm of data privacy is constantly changing, especially with the rapid evolution of technology. I have heard that more data is created in less than two days than existed in the entirety of human existence up to the year 2000. Consumers are often uncertain about how their data is used and whether they like it. I’m not sure they fully appreciate how much value they get from


companies making responsible use of big data. Add to the mix the patchwork of data privacy laws that exist around the world, and it all makes for a very interesting practice area. MC : How does Experian remain a leader on the data privacy front? DS : Experian bakes consumer expectations and interests into its business. It’s a core company value. We have a very robust data privacy compliance program that forms the backbone of our business pursuits. For example, when we explore many new products and services, we have a fair information values process to help us assess consumer privacy concerns. We convene mini task forces of subject matter experts from around the company to analyze and discuss privacy issues and make considerations such as, how a proposed product might be used by our clients, the product’s potential for adverse impact on consumers’ privacy, and what can be done to ensure responsible product usage. We have to lead by example. There definitely have been business opportunities that Experian has passed on because we didn’t feel comfortable with the data privacy concerns they posed. We know that our competitors have jumped on some of these same opportunities. I think that’s very telling of us as a company. MC : What is your ethos about data privacy? DS : Data is clearly driving so much of our economy. Most consumers do not truly appreciate this. They just enjoy the products and services and don’t focus on the how or why. They don’t think about the fact that Google or Facebook are free to them or that they can readily borrow money to buy a car or home because companies share their data responsibly. If overly burdensome regulations were placed on consumer data sharing, our economy as we know and enjoy it would drastically change. I’m at the crossroads of both a quickly evolving business and consumer privacy issues, and I believe that those of us in this unique position have to be very careful in making sure consumer data is used responsibly so that we can get the best of both worlds: wonderful benefits to our lives without abusive data practices hurting us. In other words, “using data as a force for good.”

We salute our client, colleague, and friend, David Strauss of Experian, for his dedication to developing and pursuing the best creative legal solutions – while doing so in the smartest, most cost-effective ways.




“There are many coming behind me who need the way paved.”

“It’s never right to do wrong.” Instilled in her by her mother, those simple words have guided Desiree Ralls-Morrison throughout her studies at Harvard Law, her experience gained at Merck, her tenure at Johnson & Johnson, and, eventually, her current role as senior vice president, general counsel, and secretary for Boehringer Ingelheim USA. Through it all, Ralls-Morrison has protected her reputation for integrity and authenticity. Working for a company that develops medication for both humans and animals has a variety of challenges and opportunities. Ralls-Morrison oversees legal operations for the company’s US department, and she says the company, and thus the legal group, is committed to more than the bottom line. “It’s not just about creating products and incremental dollars,” she says. “It’s about making an impact in health care and patients’ lives.” Ralls-Morrison values her function as business partner and legal advisor to the CEO. She balances her responsibility to the business and to the law equally. “The two go hand in hand,” she says. “I see my role and the role of my legal team as business leaders helping the company achieve objectives in a legal and compliant

manner.” Ralls-Morrison’s success in this balancing act comes from being confident in her understanding of the business, her ability to analyze the benefits and risks of decisions, and being comfortable enough to think creatively in achieving business objectives. “For in-house lawyers, the ability to stay focused on the larger goals while doing what is both compliant and best for the business is what separates the good lawyers from the great ones,” she says. That and an effective leadership style have distinguished Ralls-Morrison as she supports development, as well as the overall health of team culture. “The leadership piece is so important,” says Ralls-Morrison. “At some point in a person’s career, the soft skills that go into making a leader become more powerful than technical expertise.” Being a highly skilled professional is a requirement, but things like self-awareness, emotional IQ, the ability to influence others, and flexibility under pressure are valuable and necessary. Despite possessing these soft skills, at various points throughout her career, Ralls-Morrison has faced obstacles as a woman, a working mother, and an African American. Instead of allowing those experiences to deter her success, she used them to inform her perspective. “I learned to not assume that every situation had to do with the fact that I was a minority,” she says. “If I was overly sensitive or allowed the situation to limit me, it would have had more power over me than it deserved and impeded my personal and professional development and progress.” Still, when the intent clearly was not positive, she took a stand against injustice for herself and others who would follow. Even now, though she doesn’t fight the same battles she did earlier in her career, being a minority in a high-level position has unique pressures. “There are fewer people fighting the battle at this level— fewer examples of people making it

photo: Boehringer Ingelheim USA

Desiree Ralls-Morrison uses her experience to shape her legal team and invest in the next generation of business leaders BY AMANDA GARCIA

Spotlight on: Culture Ralls-Morrison gives a candid look at what makes a healthy company culture “Even the best company culture can always improve because its business objectives and surrounding environment are always evolving. Good company cultures have a strong amount of accountability, meaning that they define who the decision makers are, give those people the autonomy and the support they need to make decisions, and then hold them accountable for the results. That’s also why a healthy culture requires— and develops—confident leaders. Healthy cultures are also willing to take risks while understanding the positive and negative consequences of smart risk-taking, and they support people who take smart risks. Trust in your people is at the core of building a good company culture.”






“There are fewer people fighting the battle [against injustice] at this level. What I represent becomes even more impactful. So it’s important to me that I do the right thing.” – DESIREE RALLS-MORRISON

through,” she says. “This means there are fewer individuals to whom I can look for support, but it also means that what I represent becomes even more impactful. So it’s important to me that I do the right thing.” As she looks to the future, RallsMorrison reflects with gratitude for those who supported her. “I have had mentors who are men, women, racial minorities, and those who are not,” she says. “I have sponsors who have been able to move my career along. I also have a very strong family that has supported me and made sacrifices along the way. I would not be where I am but for all of these individuals.” Following the example of those who helped her, she feels compelled to give back to the community. For her, that means mentoring young, aspiring professionals in various fields. She was honored for that work when she was named a Woman of Power and Influence by the National Organization of Women in 2015. “There are many coming behind me who need the way paved,” she says. “I have to do what I do for those people who will follow.” Her mother’s mantra rings in her words.

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A Quiet Example The LGBTQ movement has many faces. One is Rick McMurtry—lawyer, husband, father, and everyday leader BY ZACH BALIVA

It was already a storybook celebration. Rick McMurtry was in Italy for his wedding and honeymoon. He sat in one of Florence’s enchanting piazzas and listened to classical music rise through the warm summer air as a symphony played a free concert. His phone, silenced for the concert, started to vibrate. The screen illuminated with a text message. Then another. Then dozens more. “Congratulations!” “Street Legal in Georgia!” “#LoveWins” Just days earlier, on the one-year anniversary of his legal wedding to his partner, Randall Kilpatrick, McMurtry had stood in an ancient castle surrounded by 47 of the couple’s closest friends and family. The pair from Atlanta had been married in Canada, and then in Italy. Now, at last, they were married in the United States of America. As a gay person in the South, McMurtry once assumed he would never get married. He met Kilpatrick during a US District Court clerkship in Tennessee but had already accepted a job in Washington, DC. They decided to try a long-distance relationship. McMurtry was bored of the monotony of IP work. He moved to trademark litigation in 1996, and when the time came to switch firms, he realized he and Kilpatrick were at an impasse. McMurtry didn’t want 18



to be in Alabama; Kilpatrick wouldn’t move to DC. They settled on Atlanta as a compromise. After working for a law firm in Atlanta for two years, McMurtry landed an interview at Turner Broadcasting, won the job, and started as CNN’s trademark attorney in 2000. Go inside their Atlanta home, and you’ll find a living room dotted with stuffed animals, comic books, action figures, and all the tiny things that are crucial in the world of a four- or eight-year-old boy. McMurtry and Kilpatrick have two adopted sons. The couple teach vacation Bible school, volunteer as school “room parents,” and stay active in the community. McMurtry calls it “leading by quiet example” and says it’s the way he can change how society views same-sex relationships. “I’m thankful for all the important people who led parades and were activists for gay rights. People sacrificed so much and fought so hard,” McMurtry says. “But what’s changing America today is people like us. Your gay neighbors and the friends you grew up with. Our kids play together, and people realize we’re their colleagues, and friends, and employees.” For McMurtry’s boys, today’s world is different than the one their dads knew. That older, less-welcoming world was one in which gay men didn’t dare mention their orientation—especially in the workplace. “I never thought about marriage because we just knew it was impossible,” McMurtry says. “When


“What’s changing America today is people like us. Your gay neighbors and the friends you grew up with. Our kids play together, and people realize we’re their colleagues, and friends, and employees.” – RICK MCMURTRY

photo: John Nowak/TBS




Breaking Down the Supreme Court SameSex Marriage Decision ISSUE DEBATED : Federal recognition of marriage between two people of the same gender CASE: Obergefell v. Hodges - James Obergefell, et al., Petitioners v. Richard Hodges, Director, Ohio Department of Health, et al. ARGUED: April 28, 2015 DECIDED: June 26, 2015 RULING: A 5-4 decision stating that the 14th Amendment to the US Constitution requires all US states to allow same-sex marriage while recognizing those performed in other states MAJORITY OPINION: Justices Kennedy, Ginsburg, Sotomayor, Kagan, and Breyer reversed the precedent set by Baker v. Nelson, citing the due process and equal protection clauses in the 14th Amendment. DISSENSION: Justices Thomas, Scalia, Roberts, and Alito wrote their own dissents. Chief Justice John Roberts wrote that the ruling has “no basis in principle or tradition.”




things started to shift in this country, I thought maybe it was just a matter of time.” He saw the shift coming after watching the Defense of Marriage Act (DOMA) case in which the surviving spouse of a same-sex couple—who had been married in New York—sued the federal government for denying her claim to her deceased spouse’s estate. A court found section three of DOMA was unconstitutional, and an appellate court upheld that decision in 2012. The case went to the US Supreme Court, which handed down a 5-4 decision in 2013 that declared the section unconstitutional. McMurtry knew it was a sign of things to come. “My partner and I realized our marriage would actually mean something more than a symbol of our commitment,” he says. On June 21, 2014, McMurtry and Kilpatrick were married in Canada while visiting a close friend. “I was lucky that we had the resources to go to Canada to get married, and I’m so thankful that we live in a country where samesex couples are now treated like everyone else when it comes to marriage,” he says. “We no longer have to live as second-class citizens.” McMurtry and Kilpatrick were far from the only ones they knew to take steps like these; a paralegal at Turner drove 10 hours from Atlanta to Washington, DC, to get married, since Georgia didn’t perform or recognize same-sex unions. McMurtry’s own experience with marriage, DOMA, and the recent Supreme Court ruling have made him a compassionate leader at Turner, where he manages a team of 28 while protecting intellectual property assets worldwide. “My belief in being a quiet example translates to my work life,” he says, adding that he relishes the opportunity to get in the trenches on an especially complex project or initiative. He’s met one-on-one with most colleagues to better understand their practices and responsibilities and to focus on increasing efficiencies. In doing so, he’s realized something that goes beyond the surface level of work relationships. “My own life has helped me understand what we all go through outside of work,” he says. “We all have our own crosses to bear. I don’t try to accommodate that—I try to leverage that to benefit everyone.” McMurtry has mentored gay and straight people on his team, sitting beside them to work through their issues. One individual, who came to the United States from

“We all have our own crosses to bear. I don’t try to accommodate that—I try to leverage that to benefit everyone.” – RICK MCMURTRY

Mexico at an early age to put herself through school, earned her master’s degree in business with the help of Turner’s tuition reimbursement program and is now a company director. Since 2006, McMurtry has served on the board of directors for the Pro Bono Partnership of Atlanta, an organization that pairs in-house attorneys with nonprofits in need of legal services. Memorable cases include a trademark matter for Enchanted Closet, a group that provides prom dresses and suits to individuals in need, and a trademark infringement case for an HIV awareness, prevention, and treatment center.



LOEB & LOEB LLP salutes You could say that McMurtry has a lot on his plate. He’s taking on more responsibilities at Turner (antipiracy, digital enforcement, and music licensing), continuing his pro bono work, raising two boys, and maintaining a healthy relationship with his husband. He wouldn’t change a thing. “In a way, being a part of the struggle for recognition of same-sex marriage has meant my generation doesn’t take marriage for granted,” he says. “We’re happy we finally have it, and life is good.” Looking back at the Supreme Court decision, McMurtry says he’s not surprised. He came to expect the ruling, especially after the court struck down DOMA. Even if public opinion should stay out of the courtroom, he believes it’s starting to influence decisions. The number of Americans who support same-sex marriage has increased dramatically over the last two decades and now stands at 64 percent. “I see waves of acceptance from society when it comes to gay marriage, and now we have that same validation from our nation’s highest court.” photo: John Nowak/TBS

Justice Anthony Kennedy, who voted with the liberal-leaning justices, represented the swing vote, demonstrating that future decisions will likely trend the same way until the makeup of the Supreme Court changes. When asked how the ruling will change his life, McMurtry lets out a sigh. “Oh, I don’t know,” he says. “Maybe not that much.” After all, he had already been married to Kilpatrick two times. But it will change the lives of many—and McMurtry and his husband will continue living and leading as quiet examples.

Rick McMurtry on leading the course of brand protection in the media space.



LOEB & LOEB LLP : “Rick is a talented lawyer

and a dynamic business leader. His work is helping to chart the course of brand protection in the media space and Loeb is proud to be on his team.” – Kenneth R. Florin, Deputy Chairman



APPEAR (Right) From left to right, Karah Parschauer, her son, JJ, daughter Beatrice, husband, John, and daughter Grace. Though their dynamic works for Karah and John, the parents’ role reversal in the context of the typical household can be an internal challenge. “As a mother, there are different pressures— internally and externally,” says Karah. “There’s a desire and a self-expectation that I will still take care of the twins and Beatrice as much—or more than—my husband will.”

Family Matters The Parschauer household looks and sounds much like any other, but the role reversal of its leadership tag team is often surprising to outsiders. How mother, breadwinner, and associate general counsel Karah Parschauer handles the energy of three children and a business in motion BY URMILA RAMAKRISHNAN

KARAH PARSCHAUER Associate General Counsel Allergan




After spending nine hours at the office, Karah Parschauer turns the knob of her front door half-expecting to be greeted by her children with hugs and kisses. Instead, she hears her 3-year-old daughter, Grace, singing “Do You Want to Build a Snowman?” at the top of her lungs before seeing that she’s wearing a princess robe, crown, and waving a bedazzled wand. Parschauer kicks off her high heels and follows the sound of her daughter’s voice, joining in on the chorus before looking for Grace’s older-by-three-minutes twin brother, JJ. He’s playing some sort of sword game, yelling “en garde” and “touché.” Out of the corner of her eye, Parschauer sees her husband, John, carrying their youngest, Beatrice, to the kitchen to feed her. Parschauer smiles at the chaos, and walks into the tornado of life. Parschauer dives into preparing dinner while joining JJ in the next destructive game he’s made up. After prepping dinner, John tells her about the twins’ day at preschool before dealing with a crying Beatrice in the next room.

It’s dinnertime. The kids are seated, waiting for Mom to pour milk, while Dad grabs a wooden spoon to serve a mixed veggie dish. Grace then tries to perform one last Frozen number, but Parschauer says it’s bath time, and the twins run to the bathroom. The bath is easy territory. It’s the postbath that’s chaotic. “For some reason, when my kids are naked, they always get really crazy,” says Parschauer. The next few hours are spent trying to put baby Beatrice down. It’s one thing that Parschauer likes to do herself. She sings softly as she gives Beatrice a bottle. It’s the only time she gets with the baby because of her busy work schedule, and Beatrice normally sleeps at about 7:30 p.m. After Beatrice is sound asleep, Parschauer rallies her twins to watch Tangled, at Grace’s request. JJ yawns, and rubs his eyes. Parschauer brings them upstairs for bed. By 9, it’s quiet. The children are asleep, and the parents retreat to their respective corners to shut off and relax. Her alarm—Grace—pulls at Parschauer’s sleeve to wake her up. She gets out of bed quietly so as not to wake her husband. Then she juggles a mix of e-mails, making breakfast, blow drying her hair, and dressing the kids before hopping into the car for work. As John starts his day at home with the children, Parschauer takes charge at the office. As the sole breadwinner for her family, she is the associate general counsel for Allergan. “At the end of the day, I’m still Mommy, and he’s Daddy,” says Parschauer, but it’s not something that’s clear to the rest of society. A few weeks ago, she and John met a few friends at a work meeting. One colleague brought her newborn, and John immediately went to the baby to hold her. “I think there’s still an expectation that the man needs to make the money, that that’s his contribution to the family,” says Parschauer. “All of a sudden, these moms are seeing John under a different set of rules, and it makes for a very interesting or uncomfortable sort of discussion.”

photo: Paul R. Kennedy


Gibson Dunn congratulates

Karah Parschauer of Allergan for her outstanding career and contributions to the legal profession.

John followed the mom with her baby to the other stay-at-home moms to talk about preschools and the latest water park that will be opening up. Parschauer joined the other working-fathers to talk about the stock market. After mingling, the two rejoin and one partygoer asks, “Will he go back to being a musician soon?” Parschauer responds that late-night gigs and their associated lifestyle are really difficult with children, and they decided this was best. A friend of John’s says, “I’d love to have your job for a day. To just stay at home and play with the kids!” “Come over for three days,” says John. “We’ll switch, and we’ll see how quickly you want to go back to work after you walk a few days in my shoes.” These answers come easily to the couple. They’ve had a lot of training coming up with explanations for people who don’t quite understand. “Being the sole breadwinner is difficult, period,” says Parschauer. “That’s not a gender issue. I do believe, as a mother, there are different pressures—internally and externally. Maybe it’s inflicted mommy guilt, but I think there’s a desire and a self-expectation that I will still take care of the twins and Beatrice as much—or more than—my

All About Attitude

Parschauer’s philosophy is “just keep going.” When faced with challenges, she believes in attacking them to get through them. “You need to go through them instead of letting them be roadblocks,” she says. This philosophy was important as she dealt with the changes brought about by Allergan’s integration with Actavis. “I was the legal lead from the Allergan side for the integration team with my counterpart from the Actavis side. We led the legal department integration. Because our headquarters shifted, we lost our historical executive team, and it’s now replaced with the other executive team. Integration is a lot of change. Historical Allergan had been here and independent for more than 60 years. I’d been here for 10 when the acquisition occurred. I built my career up with these people and this company. To all of a sudden have it acquired by a whole new set of individuals is not just a lot of change for me, but a lot of change for everyone in the company. You have to realize that change is going to happen, and it’s not always a bad thing. The executive team is really sharp and focused. It’s a great time for Allergan.”

husband will. There’s a pressure for me to get home as soon as I can to spend time with them or take care of them, give them a bath, put them to bed, then I can go work again. I don’t see that pressure as much with the men I work with.” JAN/FEB/MAR 2016



NANCY NORTON Associate General Counsel Parallels, Inc.

The Uncharted Course

Nancy Norton always knew she was destined for an international career. Her love of travel and interest in other cultures started early when her father took her to Ireland to visit relatives. “I became enamored with other countries when I was quite young,” she says, “and I knew I wanted to be in business.” She sought out opportunities to travel, learned another language, and pursued degrees that would allow her to build a career in international law. Now, Norton is the vice president and associate general counsel at Parallels, and she spends much of her time focusing on a wide variety of international business issues. Parallels and its Odin brand are global leaders in cross-platform solutions and cloud services enabling. As in-house counsel, Norton enjoys that her position entails something different each day. “My schedule is never predictable, every day I am working on something completely different.”

Parallels associate general counsel Nancy Norton’s days are unpredictable, but she knows the international nature of her work will always be rewarding BY JESSICA MONTOYA COGGINS 24



photo: Dani McDonough Photography



Embracing unpredictability is practically natural for Norton. She has recently found herself juggling negotiating an enterprise licensing deal in Brazil, managing a trademark issue in the Philippines, drafting a strategic partnership agreement in China, and resolving a finance matter in Greece. The most practical issue for Norton is simply the time of day. She admits that it can be trying to align the business needs with multiple time zones. Based in Seattle, Norton recently negotiated a deal where the Parallels sales team was in Singapore and the customer was in Mumbai. Since she always defers to the customer’s schedule and because the sales team wanted to close the deal by year-end, Norton spent six weeks on negotiation calls starting at 2 a.m. She is online at 4 a.m. every day in order to reply to e-mails that have come in overnight and need a response before the day ends in one of the Parallels offices around the world. Norton also takes part in a weekly call at 6 a.m. with her team in Germany and Russia, and she often responds to urgent calls for pressing matters late at night in order to accommodate her colleagues in distant time zones. Though it might be a minor inconvenience for her (and it recently interrupted a concert she was attending in Seattle), Norton considers it just part of her job. “I don’t sleep very much, so I guess I’m well-suited for the demands of the job,” she notes with a laugh. With a busy and ever-changing schedule, Norton has one activity that keeps her focused: running. Almost every day at lunchtime Norton can be found running along a river near Parallels’ office. She says

“I became enamored with other countries when I was quite young, and I knew I wanted to be in business.”

Nancy Norton VP & Associate General Counsel


We applaud Nancy for her leadership and inspiration, and congratulate her on recognition in Modern Counsel.

running helps to clear her head, relieve stress, and allows her to bond with colleagues since she often recruits employees from Parallels to run with her. In addition, when she travels to a new country, the first thing Norton does upon arriving is go for a run. “Running helps me combat jet lag and allows me to explore the city before I spend the next few days sitting in a conference room.” Norton recently ran in Munich and London and plans to run a half marathon in Sydney. “My interest in international law and business have merged together to get me where I am today,” says Norton. “I’m very fortunate because I love what I do.” JAN/FEB/MAR 2016



“Sometimes you just have to be ready to boldly go, to take the leap, and to rely on your training.” – JEFF LEVINSON, NETSCOUT SYSTEMS




IMPLEMENT Studies show that when presented with a cost-benefit analysis, people make decisions based on the costs they can avoid rather than the benefits they might gain. Loss aversion is a strong and innate influence, but it can be the restraint that prevents an organization from reaching its potential. To be an effective partner, a counselor must think not only as a gatekeeper, but like an entrepreneur.

INQUIRY Which mind-set performs better under pressure, generalist or specialist? Does the speed of your organization dictate the speed of legal’s response, or is legal a logjam in the flow of business?

Bain & Company has produced a series on decision making called “Decision Insights.” Read the article “How organizations make great decisions” for a thoughtful approach to avoiding analysis paralysis in your organization. For a lighter discussion of the many factors that influence our decisions, read “How, and When, to Make a Decision” from the Economist.

JOIN US ON LINKEDIN. Share your thoughts and find out what others are saying.




TRANSACTION APPROVED How Worldpay’s acquisition of SecureNet ensures the payment processor’s role in an evolving industry defined by business partnership by Topher Bordeau

Payment processing company Worldpay isn’t consumed by a focus on security, and its purchase of SecureNet wasn’t a security play. That may sound like a viewpoint divorced from logic, but it illustrates the evolution of the payment industry and Worldpay’s role within it. “It’s table stakes for us,” says Doug Sandberg, senior vice president and general counsel for Worldpay US. “If we don’t offer a high level of security to our business partners, we might as well not even come to the table. Providing security isn’t something we focus on; it’s part of who we are and who we need to be to do business. It’s in our DNA.” That DNA, to borrow Sandberg’s phrase, is set to evolve. The magnetic strip we’re used to seeing on the backs of our credit cards has become a thing of the past in Europe, where card issuers began inserting small chips into cards about a decade ago. The chip replaces the static, easily hijacked modality of the strip with a dynamic, 28



ever-changing style of protection that makes point-of-sale fraud unsuccessful by creating random and unique security codes for each transaction. As with most good things, though, there’s a catch. Replacing strips with chips is expensive, and domestic card-issuers are only now getting on board. The change in security technology also raises liability questions about who covers the costs of fraudulent transactions—the banks or the merchants—when fraud happens at a business that hasn’t switched to chips. Worldpay US is a key catalyst of this evolution. “We process the transaction [between the merchant and a consumer with a card],” says Sandberg, “so we have to make sure our platform accepts the new message format and can talk to the payment networks using this technology. And we need to make sure—to the extent that we can—that our merchants get onboard with this technology.” What Sandberg isn’t saying—because all of this talk about advanced security

“It’s table stakes for us. If we don’t offer a high level of security to our business partners, we might as well not even come to the table.” – DOUG SANDBERG

overlooks the bigger picture about the purpose it serves— is that, while the highest level of security is essential for doing business in his line of work, payment processing companies that tout robust security architecture to their clients as their strongest value proposition are missing out. Worldpay, and agile operators like it, are shaping the future of payment processing by looking at all of the things that can happen when staying at the forefront of security is a prerequisite, not just an aspiration. That’s where SecureNet comes into play. The Austin-based company, which Worldpay acquired in December 2014, isn’t just about payments security. The company pioneered the payment industry’s only cloud-based solution that seamlessly integrates point-ofsale, mobile, and e-commerce payment processing, inventory management, and data analytics for merchants. Adding those capabilities to Worldpay’s existing payment processing capacities will allow Worldpay to do more than process payments for its customers. They’ll become partners, leveraging SecureNet’s insights and analytics to help health-care providers, restaurants, and partners in almost every vertical learn more from their payments to better run their businesses. “Our SecureNet acquisition is about the changing landscape of payments technology,” says Sandberg. “There is a next generation of development for applications at the point of sale and integrated payments that didn’t exist in years past.” In the past, when nascent businesses opened a commercial account with a bank, the bank would process the new business’s credit and debit card payments through an external partner. That photo: Worldpay


Then & Now: The Big Move Worldpay decided to move its US headquarters to Atlanta to accommodate growth and position itself in the payment industry epicenter. Here’s a breakdown of the old and new HQ. THEN (2002-15) Where: Sandy Springs, GA (northern suburb of Atlanta) Size: 110,000 sq ft Why: The group that started working in this location was the original five employees of Lynk Systems, Inc. (the former name of Worldpay US, Inc.) They started in a 1,500-square-foot basement office, and it grew over the years until they occupied the entire building in 2002. The company has overgrown the space. NOW Where: Atlanta Size: 130,000 sq ft Why: Atlanta is the epicenter of financial services technology with access to innovative talent, infrastructure, and creative business, which Worldpay US CEO Tony Catalfano says best positions the company for continued growth.

external partnership—and the referral channels that drove business to the partnership— constituted the traditional way that banks provided credit and debit card processing services. “Over time, all kinds of software applications and systems for vertical markets have been developed,” says Sandberg, who cites the restaurant space as a great example of this type of evolution. Instead of buying a point-of-sale payment system that just takes payments, today restaurant payment systems are integrated into restaurant applications. “If I’m opening a restaurant, I’m not going to just buy a payments application as a standalone,” Sandberg adds. “I want software that helps me manage my business, tracks inventory, does automatic accounting when I make sales, helps me with reservations, and provides a whole host of other services.” Payments companies have typically struggled to integrate their legacy payment technology with this new generation of platforms, and Worldpay had been looking to enter this market by both developing its own internal platform and evaluating what was already in the existing marketplace. “We realized that SecureNet had a next-generation platform with a fit for the new world,” says Sandberg. “It allows business partners to integrate and also allows us to share information with merchants that gives them business analytics that help them drive their business.” The SecureNet purchase helps Worldpay accelerate its transformation from processing to integrating payments into the software and applications that merchants use to run their businesses. The combination benefits both Worldpay and its future partners in software development.

“Our SecureNet acquisition is about the changing landscape of payments technology.” – DOUG SANDBERG

Worldpay US awarded

Top Financial Services Partner by TopSource 2014

“It’s good for both of us, because the developers can provide a solution to their customers that has payments and analytics, and we can be embedded in a business solution that serves the merchant more holistically,” says Sandberg. The SecureNet acquisition is just one part of Worldpay’s current growth. Roughly 70 percent of all US payments are processed in Georgia, and Worldpay US is set to complete a $10 million relocation investment to move closer to the epicenter of the financial services area in midtown-Atlanta. The move will showcase Atlanta as a global payments capital, with Worldpay at its heart. The company’s new location will enable better partnership with institutions such as Georgia Institute of Technology and organizations such as the American Transaction Processors Coalition, which is chaired by Worldpay US CEO Tony Catalfano. “Atlanta is often called ‘Transaction Alley,’” says Sandberg, “and we want to attract developers of the next-generation mobile apps and point-of-sale solutions that integrate payments to help business customers complete transactions that generate business insights safely and securely.”

Why Worldpay? Faster Funding 24/7 US Customer Support Flexible Pricing

Worldpay is... a trusted payments processor of several law firms, legal networks and legal organizations. 1.866.505.5965

600 Morgan Falls Road Atlanta, GA 30350 © Worldpay 2015. All rights reserved. Worldpay, the logo and any associated brand names are trademarks of the Worldpay group of companies. Worldpay US, Inc., is a registered ISO/MSP of Citizens Bank, N.A.

JAN/FEB/MAR 2016 WP-ModernCounsel_051215.indd 1


5/14/2015 6:02:45 PM


Case Study

NETSCOUT SYSTEMS’ TRANSFORMATIVE ACQUISITION What a $2.3 billion acquisition means to the computer network management company and how the legal team supported the deal by Julie Schaeffer 30



photo: NetScout


In July 2015, NetScout, a leader in network, application, and service-assurance solutions, acquired from Danaher Corporation several operating companies in a deal valued at approximately $2.3 billion. As a result, NetScout’s revenue increased threefold, and its workforce more than tripled. As vice president, general counsel, and secretary, Jeff Levinson was at the center of the acquisition and worked with NetScout leaders to prepare the company for the transformative event while ensuring day-to-day legal operations continued. Levinson spoke with Modern Counsel about the details and motivations behind the acquisition.

The Danaher Corporation Deal

Modern Counsel : What was involved in the acquisition of Danaher Corporation’s operating companies?

Good Counsel

Jeff Levinson : Our CEO’s vision of “traffic-based instrumentation” of networks catalyzed this deal. The idea was to combine NetScout’s service assurance business with the Danaher companies: Tektronix Communications for a service provider, Arbor Networks for security, parts of Fluke Networks for enterprise, and their packet flow switch business. I think of our recent combination as a “Big Bang,” since this is transformative for our company and, I believe, the network service-assurance industry. MC : How does the acquisition diversify NetScout? JL : It broadens our core technology portfolio and doubles our total addressable market. It accelerates our cyber intelligence and business intelligence analytics solutions. It gives us a stronger go-to-market platform in a very competitive world. And it allows us to improve operational efficiencies. I should underscore that last point because at NetScout we have a unique view of “lean,” which does not mean cutting employees. Instead, our CEO talks about being “lean but not mean.” These words resonate.


Acquired value: $2.3 billion NetScout revenue before acquisition: $450 million NetScout forecasted revenue after acquisition: $1.1 billion NetScout workforce before acquisition: 1,000 NetScout workforce after acquisition: 3,300+


Always have a recommendation or solution to offer. Be accountable. Make decisions. Emphasize high performance with high integrity. Respect executives’ time and understand their goals. Attend to your team. Give people opportunities to rise to the occasion. Be serious about your craft and your writing. Take out library books and read a lot, including business books. Keep your finger off the trigger until ready to shoot.

Innovative, Strategic, Practical Legal Counsel

Seyfarth Shaw LLP applauds Jeff Levinson, Vice President and General Counsel of NetScout Systems, on his accomplishments and recognition by Modern Counsel

JL : Technology innovation is a major driver. As a combined company, we will have more than a third of our employees in research and development. Our patented Adaptive Service Intelligence technology allows us to create innovative products that will support our customers at scale and ©2015 Seyfarth Shaw LLP


#15-2638 M1

MC : What did NetScout want from this deal?



Baker & McKenzie salutes NetScout Systems as a leader in developing innovative service delivery solutions and Jeff Levinson for his forwardthinking leadership throughout his distinguished career.

We are proud to serve as an advisor to NetScout Systems.

in all sorts of environments. In the face of very tough competition, we will be able to accelerate our efforts in virtualization, cloud computing, voice over Internet Protocol (VoIP), video, and mobility. The acquired companies’ capabilities in network troubleshooting complement NetScout’s strengths in monitoring complex IP-based networks and mission-critical services that run across them.

“Sometimes you just have to be ready to boldly go, to take the leap, and to rely on your training.”

MC : How long did the negotiation process take?

MC : What did you bring to the table?

JL : We were working through tough issues in a compressed time. When we told our outside advisors how aggressive our timetable was, I could tell they were doubtful at best. But we held to our deadline, worked intensely, and were able to announce the deal on our timetable. MC : What were the major challenges? JL : The deal structure was complicated, and that presented a few challenges as we worked through it. Integration planning is always critical. A significant issue was the regulatory clearance in terms of time, effort, and the need to get it right. The Department of Justice notified us of their second request for additional information the day before Christmas 2014. It took until late April to obtain clearance. MC : Who did you work with to get the deal done? JL : Our CEO was determined and provided strategic direction and support and really drove the deal with decisiveness. We had a small team that worked through the critical issues, negotiated hard, and got to resolution quickly. Working closely with the executive team, I had good support as I worked through the acquisition negotiation and documents while my team split its time between transaction work and day-to-day work—the normal blocking and tackling—as I did. We got good advice from our outside counsel on the transaction documents and structure, international issues, and intellectual property, especially.





JL : No one does this alone. Without experienced executives, high-performing lawyers, and capable outside advisors, we would have struggled. But when I think about the role of corporate counsel, I think of us as business lawyers. We have to be technically competent in substantive areas of the law and continually improve our domain expertise, but we also have to be grounded in management skills, such as project management, risk management, emotional intelligence, diversity and inclusion, and strategy, just like other business leaders. We need to be able to communicate calmly and clearly. At the core, we have to possess outstanding legal skills, business acumen, sound judgment—all underpinned by integrity. And, as with this transaction, sometimes you just have to be ready to boldly go, to take the leap, and to rely on your training. MC : How will the acquisition change the company, and how will it change your role? JL : We will be a different company with a different cadence, but we are both confident and realistic. We have an opportunity in the legal department to apply best practices, work with our law firms to reset the relationships and the processes—not just around fees, but around communications and project management and innovation. I have to scan the horizon for what’s coming, and I need people who think about our business. My goal is to continue to align with the business, provide sound guidance, help manage enterprise risk, build up the legal department along those lines, and improve every day.


DEALMAKERS The legal team behind LKQ Corporation helped build the industry leader through more than 225 M&A transactions. GC Victor Casini shares what makes his team the aces of acquisition by Peter Fabris

VICTOR CASINI General Counsel LKQ Corporation

A serendipitous elevator conversation two decades ago led Victor Casini down an unexpected yet successful career path. In the ensuing years, Casini, now general counsel and corporate secretary of LKQ Corporation, has been instrumental in building an industry-leading, $7 billion aftermarket and recycled automotive parts distributor. With his legal guidance, LKQ has grown from just an idea to where it is today by executing more than 225 acquisitions of several midsized companies and scores of small mom-and-pop operations. His contributions to the photo: LKQ Corporation

company have made him a key part of the business team. It all started one day in 1992, when Casini stepped onto an elevator at the Chicago offices of his then-employer, Bell, Boyd & Lloyd LLP (now K&L Gates LLP) and struck up a conversation with Paul Metzger, one of the firm’s partners. Metzger told him a client needed help with a deal to buy Discovery Zone, Inc., an operator and franchiser of family entertainment centers. Casini took on the assignment and met Don Flynn, the client and a former executive and director who was forming Flynn Enterprises, which would build a diversified portfolio of businesses to eventually pass on to Flynn’s heirs as a family legacy. While working with this account, Casini got to know Flynn, and in 1993, he was offered the position of general counsel with Flynn Enterprises. In 1998, Flynn formed LKQ to exploit a unique vision to build an alternative vehicle parts company via acquisitions and industry consolidation. That would mean plenty of work for attorneys— though Casini didn’t know how much at the time. “When

I first joined Flynn Enterprises and later LKQ, I wondered if I would have enough to do,” Casini recalls. “Turns out I haven’t had much down time since.” In 1998, LKQ was formed as a shell company and soon purchased three of the leading companies in the alternative vehicle parts industry. LKQ distributes aftermarket and recycled parts—aftermarket being those made by manufacturers other than the automaker, and recycled being reclaimed parts from vehicles totaled in accidents. No one had attempted to create such a large company in this industry with this broad of a geographic reach (LKQ operates nationwide and in many foreign countries). With acquisitions as the essential growth strategy, the legal team plays a prominent role that goes beyond that of a typical supporting group. Legal and business leaders at LKQ have become a highly integrated, efficient team with a deep understanding of what needs to be done to expedite successful deals. “We try to help our clients get things done and not look for reasons to derail deals,” Casini says. Legal has earned the respect

LKQ’s Notable Acquisitions AT A GLANCE

KEYSTONE AUTOMOTIVE INDUSTRIES Strategic objective: Expansion into the collision aftermarket industry Purchase price: $811 million EURO CAR PARTS HOLDINGS LIMITED Strategic objective: Expansion into the European market Purchase price: $350 million Employees: 3,500+ SATOR BEHEER B.V. Strategic objective: Further European expansion into the Netherlands, Luxembourg, Belgium, and northern France Purchase price: Not disclosed Employees: 800+ KEYSTONE SPECIALTY Strategic objective: Expanded product offerings to include specialty vehicle aftermarket equipment Purchase price: $450 million Employees: 1,500+




of business leaders, who, Casini says, recognize the legal team has business experience and can readily offer strategic input. And their counterparts on the business side are well versed in legal issues. “Our senior vice president of development is an attorney,” Casini points out. There’s no culture clash, he adds, and the streamlined process that has developed over the years—honed through repetition—gets deals done quickly with appropriate due diligence. “We know how to zero in on the key issues,” Casini explains. A notable plus is that the legal team, composed of four attorneys and one paralegal in the United States and one attorney in the United Kingdom, has a sound understanding of the financial aspects of acquisitions. A standard purchase agreement, which the team developed and tailored for LKQ and the industry, aids in expediting deals. This document allows LKQ to protect itself from the legal risks stemming from acquisitions, says Casini, without “overwhelming the process by dumping a huge boilerplate document on the other side.” LKQ must consider risks such as environmental issues, pending or possible litigation, and employment matters. In

addition, LKQ’s legal team has developed a due diligence checklist that includes examining the material contracts of the target company, assessing pending or threatened litigation, and ensuring that its employees have proper I-9 forms that make them legal to work in the country. It is designed so sellers can quickly respond to LKQ without the need to send a large due diligence team to the acquisition target. There are innumerable other details that could attract the attention of legal staffs in these kind of acquisitions, so focusing on what’s important and not getting bogged down with minor matters is critical to keeping the process moving smoothly. “What we wouldn’t do in most cases, for example, is send somebody to the target company to pore over their minutes books,” Casini says. Because LKQ usually buys the assets of a company and not the company itself, this step is usually not worthy of that level of attention, he says. LKQ’s negotiation strategy—being less confrontational and more cooperative with the acquisition target’s legal representation—has proven effective in getting deals done to the satisfaction of both sides, Casini adds. LKQ keeps most of its legal acquisition work in-house,


> FISHER & PHILLIPS LLP: “Fisher & Phillips is honored to represent

LKQ Corporation in its labor and employment matters. We congratulate Victor Casini on his distinguished legal career and on the tremendous insight and selfless dedication that he and his team bring to solving LKQ’s labor and employment issues.” – Craig Annunziata, Managing Partner




Pocket Policy Manual

The Hart-Scott-Rodino Antitrust Improvements Act in brief This act requires companies to file premerger notifications with the Federal Trade Commission and the Antitrust Division of the Justice Department. It also establishes waiting periods for certain acquisitions or tender offers and authorizes the enforcement agencies to stay those periods until the companies provide additional information about a transaction.

but some deals require outside counsel. A $450 million deal for Keystone Specialty, a distributor of specialty vehicle aftermarket equipment and accessories, is a case in point. LKQ enlisted K&L Gates due to the size of the transaction. In particular, the outside counsel assisted with drafting and negotiating the merger agreement and complying with the Hart-Scott-Rodino Antitrust Improvements Act. LKQ also uses specialty firms, like Fisher & Phillips for employment matters and Shook, Hardy & Bacon for

litigation issues, when circumstances warrant. Deals for foreign companies such as LKQ’s 2013 acquisition of Sator Beheer B.V., a distributor of mechanical aftermarket parts in Luxembourg, Belgium, the Netherlands, and northern France, typically require the assistance of counsel based abroad. Differences in language and business laws and practices make the assistance of an in-country law firm essential. Baker & McKenzie in Amsterdam assisted on that deal, which expanded LKQ’s European presence. “For foreign acquisitions, you want to deal with a law firm that has experience with these types of deals with US lawyers,” Casini says. “A foreign law partner has to be able to explain the differences between the applicable foreign laws and their US counterparts, so you have a good sense of the legal issues and risks.” Casini may not have envisioned such a prominent role in building a powerhouse when he signed on with LKQ, but his contributions have been essential to the company’s success. Few corporate attorneys have had his good fortune to find a role that brings all their skills to bear to realize the enterprise’s strategic vision.


> SHOOK, HARDY & BACON LLP: “Vic is an extremely valuable asset for

LKQ. He brings a straightforward and thoughtful approach to LKQ’s legal issues. He has extensive knowledge of the industry and we always enjoy working with him.” – George Dougherty, Partner

For the past 70 years, Fisher & Phillips has exclusively represented employers and management in labor and employment matters.

Craig R. Annunziata, Regional Managing Partner, Chicago | (312) 580-7816 10 South Wacker Drive | Suite 3450 | Chicago, IL 60606




PANDORA’S NEXT BIG THING Steve Bene’s strong M&A background helped the streaming giant complete the key acquisition of Next Big Sound that bolsters the music service By Peter Fabris

STEVE BENE General Counsel Pandora Media




When Steve Bene joined Pandora as general counsel, it wasn’t a relaxing transition. His first challenge was to work with 20 legal professionals to complete the first significant acquisition of another company in Pandora’s history. Pandora, one of the most popular music-streaming services, has created a business model that uses statistical analysis and human curators to find songs and artists listeners are likely to enjoy based on key searches and constant feedback of likes and dislikes. By collecting demographic data about its users, the company is able to sell targeted advertising. It also shares data and trends with artists, artists’ managers, and recording labels to aid their marketing efforts. For example, Pandora’s data helps managers find geographic locations where their artists are popular to help them plan tours and promotional appearances. In early 2015, Pandora bolstered its ability to assist artists by acquiring Next Big Sound (NBS), a company that develops statistical analysis software that examines media, download sites, and other music

services. NBS can predict when a new band is about to spike in popularity based on trends in social media, digital radio, and download sites. The acquisition, completed in May 2015, adds to Pandora’s analytical capability. For Bene, who joined the company in October 2014 from video game developer Electronic Arts, the NBS deal was a chance to learn more about his team and create a framework for Pandora to make future acquisitions. Pandora’s legal team was faced with several issues and considerations. How would the deal impact NBS’s relationships with other data sources? If certain sources were unwilling to share data with NBS after it became part of Pandora, NBS’s ability to analyze trends accurately might be compromised. Due diligence included extensive and prolonged conversation on this issue with NBS leaders to ensure sources would continue to provide vital data that feeds the company’s analytics. Another concern was more personal: would the key players at NBS be willing to become Pandora employees? An early area of focus was ensuring effective communication among all attorneys involved. “You need to carefully manage communications between both sides’ inside and outside counsel,” Bene says. He spent time upfront to “work out the dance between communication protocols,” so he and his team knew who was doing what in the due diligence process. This attitude paid off. Negotiations proceeded without rancor or much disagreement, Bene says. With no issue approaching a showstopper, the acquisition that appeared complicated became straightforward. “I’ve been doing acquisitions for about 25 years, and I can say without hesitation that NBS was among the smoothest to execute,” Bene says. photo: Pandora Media


Modern Counsel sat down with Bene to discuss the ins and outs of the Next Big Sound acquisition, which marks a time of growth for Pandora—despite the increasing demands of competitors such as Apple Music and Spotify.

SB : Part of the process—before even approaching the other side—was to come up with a form for acquisition agreements. The bulk of the agreement lives in the representations, warrants, and indemnities. Those all need to be specifically tailored for your type of business because they are meant to reflect business and operational risks. We didn’t have one of those at Pandora. We spent a lot of time with Covington and Burling figuring out the right balance of reps, warranties, and indemnities. Now that we have that, we have a starting point that’s a little further down the road for the next deal. MC : What might change in future deals?

Modern Counsel : How did the process of the acquisition set a framework for future deals? Steve Bene : Pandora didn’t have an outside legal partner for M&A previously. I’m a firm believer that you need both inside expertise and a credible, really experienced outside law firm in order to make deals run smoothly. That’s primarily because the acquisition agreement, negotiation, and a lot of the corporate due diligence should be done by an outside law firm because they do these kinds of deals day in and day out, and they have the best experience on what the current market is in terms of representations, warranties, and those sorts of things. You also need a really experienced internal team, because certain due diligence is best done by people internally who know what they’re looking for and are going to have to manage the company that you buy once the deal is closed. MC : What did outside counsel contribute to this transaction?

SB : Although we worked well with Covington and Burling, and I would love to be in a position to work with them again, we will do the same type of process again with other counsel, as well. I believe you have to have more than one go-to law firm. Somebody else’s perspective will make the Pandora form stronger. MC : What implications does this deal have for Pandora’s business strategy? SB : One area of common focus between the two companies is advertisers. NBS has been able to find the right artist partners for certain brands. If, say, a soft drink company wanted to develop a campaign around music, it could work with NBS to create a summer tour with a hot or emerging artist who will resonate with a particular segment of the population— that’s something that both Pandora and NBS have been doing quite effectively for a while. Combining our capabilities has a lot of potential. Eighty percent of our revenue comes from advertising. The ability for us to partner with national brands will only get better when we add the capabilities of NBS.

MC : Do you expect NBS to strengthen your relationship with the artist community? SB : We are, in effect, two companies focusing on providing as much data and assistance as we can to artists for career development. We have 80 million listeners telling us all kinds of things about the kind of music they love. We bring this data together in our artist marketing platform that gives credentialed artists free access to a dashboard with all the information that we have about how often songs are being played on Pandora, where the listeners live, and a whole host of other data. That dovetails perfectly with NBS’s analytical suite, which takes social media and other data and figures out how an artists’ activities—like going on a TV show, participating in an interview, or appearing in a news cycle—affect public awareness of their careers. They’ve also developed analytics that predict which artists will break out and when that break may occur. Combining the two companies will allow us to incorporate more analytics and further enhance these tools. It adds Pandora’s incredibly rich set of data to NBS’s powerful analytics. MC : Coming in as an outsider, how have you eased your transition and established trust with the legal team? SB : Before I accepted the job offer, I insisted that I sit down with most of the senior folks in Pandora’s legal department. They got a chance to evaluate me and to make sure that I am someone they could work with. I’ve also worked extensively with the team on career development. I’ve made sure there are opportunities for cross-training in new areas, for example. I’m a big champion for everybody looking ahead in their careers, whether that’s at Pandora or elsewhere. JAN/FEB/MAR 2016



OUTREACH FOR BETTER OUTCOMES Adam Kokas’s strategy for exceptional shareholder relations at Atlas Air by Jessica Montoya Coggins

ADAM KOKAS General Counsel, Chief Human Resources Officer, and Secretary Atlas Air Worldwide




Atlas Air Worldwide is one of the largest providers of outsourced aircraft and aviation operating services, with a particular focus on airfreight. Last year, it operated more than 28,000 cargo and passenger flights, serving 432 destinations in 123 countries. At the hub of this activity sits Adam Kokas, Atlas Air’s executive vice president, general counsel, chief human resources officer, and secretary. To say Kokas juggles multiple roles within Atlas Air only begins to describe the challenges he faces. Kokas’s role is constantly evolving to support the business. A significant portion of his work is devoted to shareholder outreach. Kokas leads the governance side of outreach in partnership with the company’s CFO and head of investor relations, and he has become adept at establishing relationships with many of Atlas Air’s major shareholders. Part of this outreach occurs in what Kokas refers to as “the offseason,” so termed because they reach out to shareholders proactively outside of the proxy filing season. It’s important for Kokas to remain flexible. Some shareholders are more comfortable meeting in-person; others prefer communicating through a call; and some prefer to just receive written materials. Kokas does his best to be prepared for any meeting and finds that such preparation often makes the difference. Reading and learning

all he can about his shareholders and what’s important to them in terms of governance is critical. “After all,” says Kokas, “shareholders are spending significant time learning about Atlas Air, and it’s only appropriate for us to do the same.” As part of the outreach strategy, Kokas and his team typically provide written materials for shareholders in advance. This could include an agenda, a tear sheet highlighting key points about the company, or a PowerPoint deck. Another significant part of Kokas’ shareholder outreach involves answering shareholder questions about governance and related matters. “Ultimately, it’s all about what’s important to the shareholders, and it’s the job of the Atlas team to be able to provide them the information and answers they are seeking,” he says. For other companies looking to strengthen their shareholder outreach, Kokas says it requires a significant amount of time, preparation, focus, and the ability to think on one’s feet to be responsive to tough questions. He maintains that while everyone may have other areas of primary responsibility, shareholder outreach is an important tool that should have significant dedicated resources for public companies. Kokas believes a commitment to proactive shareholder outreach is an integral part of his job and one that can provide significant value to any company. Shareholder outreach has also

photo: Larry Lettera/Camera 1

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ATLAS AIR Executive Vice President General Counsel Chief Human Resources Officer and Secretary

ADAM KOKAS for his leadership and strategic vision. Ropes & Gray is honored to serve the legal and business needs of Adam and his team.

given him a new and unique perspective directly from the owners of the business. This perspective compliments his view of the company and makes him a more effective leader. Shareholder outreach only goes so far, however. Without a strong company culture, outreach efforts fall flat. Atlas Air’s culture of compliance can be seen in the company’s dedication to maintaining best practices in line with global anticorruption laws, in particular the Foreign Corrupt Practices Act (FCPA). Since a number of places where Atlas Air does business are deemed “high-risk” by the act, Kokas notes that the legal group is continually assessing risk within the business and making sure the company takes the right precautions. According to Kokas, Atlas Air has engaged in numerous efforts to ensure an effective compliance program and educate employees about global anticorruption rules, including the FCPA. Recently, Kokas engaged an outside firm to conduct a global risk assessment supported by the company’s legal department, which involved the firm interviewing employees from all around the world. The result was to enhance the company’s compliance policies, procedures, and programs. “Taking steps such as a comprehensive risk assessment is not only prudent in light of the guidance we’ve seen from the Department of Justice,” Kokas says, “but also an important opportunity to engage with employees and promote a culture of compliance through the exercise of the assessment itself.”


> ROPES & GRAY LLP: “Working with Adam is a Attorney Advertising ©2015 Ropes & Gray LLP




pleasure. He truly understands the legal issues and challenges as they affect the Atlas business, and he’s constantly focused on what’s ahead in the industry.” – David Fine, Partner

New Destinations, New Rules In 2014, Atlas Air flew to 432 destinations; many of which were new for the company. These are a few examples of the far-reaching locales and activities that keep the legal team at Atlas Air busy: SHANGHAI : This is one of the world’s largest and busiest airports. It is also restrictive when it comes to new air service. Not only are traffic rights required from the Chinese government, but takeoff and landing slots are required. For cargo operations, slots are available only during late-night hours. According to Kokas, that adds an extra layer of detail for the carrier. LOS ANGELES : In this metropolitan area, noise issues are a consideration. With the largest fleet of Boeing 747 freighters and a substantial fleet of the newest generation 747-8 freighters, Atlas Air is particularly attentive in addressing these. ARGENTINA : The entire country has limitations on how much currency can be withdrawn. This is challenging for Atlas Air while using local vendors and working with local customers. NEW YORK CITY (JFK) : This is Atlas’s operational base, and the Federal Aviation Administration has recently proposed slot constraints on unscheduled operations (Atlas’s primary operating mode).


MADE - in AMERICA When Richard Wingate built a US legal function for LG Electronics, he had to navigate contracts and compliance, but culture posed the biggest challenge. He shares his experience creating the American legal arm of a Korean company by Julie Schaeffer

Modern Counsel : What was the state of LG Electronics’ legal function when you joined?

months showing them I knew what I was doing and was a trustworthy person.

Richard Wingate : There was a legal department at headquarters in Korea that was expanding globally, but there were no lawyers in the United States.

MC : What did you see as the biggest need?

MC : How did you go about building the US legal department? RICHARD WINGATE General Counsel LG Electronics

RW : I had some framework presented by headquarters. For example, they had contract management and litigation management systems they wanted us to use. And my right hand was a liaison officer in Korea, who wasn’t an attorney but understood headquarters’s processes. Beyond that, I had to build the function from the ground up. MC : How did you do that? RW : This is an organization in which you have to build trust; it’s cultural. So I spent the first six

photo: LG Electronics

RW : Training of the business. I did a tour of offices across the country, giving the basic antitrust, advertising, and compliance training to ensure we had a solid foundation. Many of the locals were familiar with this stuff, for the most part, but we had, at that time, a lot of foreign service employees (FSEs), and it was new to them. MC : Did you have to establish procedures and documents? RW : There were some standard contracts left over that had been used at a subsidiary, Zenith, so I revised them as necessary and got them in order, one division at a time, moving as quickly as I could. Of course, there were always emergencies that had to be dealt with, so I faced some obstacles along the way. JAN/FEB/MAR 2016



LG Electronics USA’s Legal Function BY THE NUMBERS

1 4

general counsel

paralegals (two permanent employees, two temporary)


attorneys (five permanent employees, two temporary)


US business divisions supported

MC : When did you bring on staff? RW : I hired an assistant whom I shared with my Korean liaison about three months in, but it took a year for me to hire my first attorney. In the early days, I really relied on a cadre of outside counsel I knew I could trust. Some of them acted almost as in-house counsel for a while. I built from there, adding generalists first, then specialists in human resources, then some part-time help with customs and logistics. It was really about plugging gaps in the most creative ways I could find until we could build up the expertise we needed. MC : How long did that take? RW : I got to a fairly comfortable place in two years, then a much higher competency level after five years. Initially, we were covering only home appliances, home entertainment, air conditioning equipment, and some original equipment manufacturer businesses. But seven years in, we merged with the mobile company, which had its own legal department in San Diego reporting to me with a dotted line. That took my group up to 14 people for a while, but as we were seeking efficiencies and the mobile business declined for a while, we downsized to ten, which is about where we are today. Now the mobile business is improving dramatically, so I hope we will be adding staff soon. MC : What have been some of the challenges of this effort? RW : Put simply, the single biggest challenge was educating people about how the US legal system works and how much it costs. The cost of US litigation came as quite a shock to some managers. It really takes the alignment of legal, IT, and the business, and that was complicated by the fact that most of the people in IT were Korean speakers with no concept of American litigation. There was a long education process. Another challenge was getting some of the FSEs to understand the importance of contracts. Frankly, a lot of businesspeople don’t understand the importance of contracts, local or foreign. The idea that we should negotiate contracts instead of simply signing form agreements with customers and vendors was a shock to some. It took a while to build up enough staff so we could handle most contract negotiations in-house. MC : Do you have any advice for other attorneys seeking to tackle such big initiatives?




“If all you do is say ‘No,’ your clients will stop coming to you and asking questions, and that’s when bad things happen.” – RICHARD WINGATE

RW : Be ready to work hard and long hours, particularly in the beginning. And be patient—you can’t fix everything overnight, so prioritize. Where are the big risk exposures, legally? Which will cost a lot and/or take a lot of time and effort? Those are the ones you want to bring to the attention of senior management. The last thing you want to do is have senior management be surprised by a government investigation or the unexpected costs of litigation because you did not plan for those eventualities. MC : How do you identify those risks? RW : It depends on your industry and company, but to identify the big risks, we used grids, mapping the likelihood of a violation occurring on one axis and the impact on the other. A big risk here is antitrust, which is a risk any time you’re in a sales environment in which there are opportunities for competitors to meet each other. We also have product-regulation risk, as a lot of our products are heavily regulated by the Federal Communications Commission, the Department of Energy, and the Environmental Protection Agency, to name just a few. We built a a compliance program early on to meet these risks. MC : What were some of the philosophies that guided you? RW : I try to teach people that you should avoid saying “No” to your clients on a regular basis. My boss at Sony taught me that if all you do is say “No,” your clients will stop coming to you and asking questions, and that’s when bad things happen. There are often several ways to get to “Yes” legally. But it’s an art. It’s the in-house counsel’s role to find the one that’s safest and least restrictive and still meets the client’s objective.


DEBORAH TYLER Deputy General Counsel Sharp Electronics

IN LEGAL THEY TRUST Deborah Tyler navigates international legal challenges and cultural nuances by building trust and consensus By Amanda Garcia

Balance is crucial in many areas of life, and perhaps even more so for an in-house lawyer. Deborah Tyler, deputy general counsel at Sharp Electronics, is no exception. As a corporate generalist responsible for a wide variety of tasks (advising multiple business teams, negotiating deals, leading major internal investigations, overseeing large litigation, and more), she balances her time and workload. And as an American woman in a Japanese company, Tyler regularly balances nuance and cultural differences. Sharp Electronics, headquartered in Mahwah, New Jersey, is the US sales and marketing subsidiary of Sharp Corporation of Japan. While most of its work is done on the US side of the 44



business, Sharp Electronics has adopted a dual system of Japanese and American management and decision-making styles, and its workforce includes a significant amount of Japanese expatriates. All of that has created an atmosphere heavily influenced by Japanese culture. For Tyler, that unfamiliar culture offered a unique learning curve when she joined the legal team in 2008, but one that she has navigated with poise, rising in the ranks and earning the trust of colleagues and leadership alike. “They rely on us and appreciate our recommendations at the parent level,” Tyler says. Unlike the fast-paced American approach to decisions, where the imperative is to decide quickly and act, the

A Seat at the Table A case study on the benefits of soft skills in international business A particularly unique negotiation for Tyler was with a company in Taiwan. Certain risks that were not appreciated in Taiwan were significant to Sharp’s business in the United States, but reaching an understanding with remote communication was challenging, so Tyler accompanied Sharp executives to Taiwan. “There were language barriers, cultural differences, and legal distinctions that appeared insurmountable,” she says, “but we sat across the table for a week and were able to make significant progress on what mattered to Sharp.” That personal interaction ultimately led to a satisfactory solution for both parties. “Being there was crucial,” she says. “I’m proud of the results.”

photo: Sharp Electronics


“It took time to understand that the value was not only in the decision itself, but in the process to get there. Once I understood our role—that we were invited to be a vital part of that process—I could appreciate it and recognize the level of trust that had been placed in our legal department.” – DEBORAH TYLER

Japanese approach is focused on both the deliberate process of decision making and the result, which is generally reached after achieving consensus. Great value is placed on the careful analysis of data from every angle and every level, which takes time and deliberation. “Everything fits into that framework,” explains Tyler. Her team will offer advice or recommend an approach and then answer several levels of questions. Ultimately, their recommendation will be communicated with several different groups to gain everyone’s buy-in. While the process may seem rigorous, Tyler and her team appreciate that it compels them to think collaboratively about the big picture and the long view at all times. They consider every piece of advice they offer from all perspectives in order to make the best recommendation for the company. “It took time to understand that the value was not only in the decision itself, but in the process to get there,” says Tyler. “Once I understood our role—that we were invited to be a vital part of that process—I could appreciate it and recognize the level of trust that had been placed in our legal department.” Tyler’s adaptability may be surprising to some, based on the fact that she is a former litigator. But her experience advocating in the courtroom and articulating her position in the face of opposition have been assets to Sharp. Sharp was looking for a dynamic, agile person with the unique knowledge that could only be found in a lawyer who had gleaned expertise in many areas from working with a variety of clients. It wanted a person who could identify the critical areas of risk, see a potential problem coming, and navigate around it. Tyler fit the bill. But perhaps more than legal acumen, Sharp needed an attorney it could trust

to provide sage advice while moving the business forward. “Litigators in a law firm don’t always have to think about trust,” says Tyler, “but trust is a big deal in-house—especially in a Japanese company.” Trust builds relationships and relationships build trust; both are required for a legal team to successfully support the business. Tyler’s integration at Sharp has been notable, in part because she is a woman in a traditionally male-dominated corporate culture (she is the first female deputy GC and officer of Sharp Electronics). “I’m proud of the fact that I can sit comfortably at a table full of male senior executives, and that I am in that seat because they want to hear what I have to say,” she says. “I try to be very respectful of the Japanese culture, and to frame my advice accordingly.” On one side of the scale is Tyler’s openminded approach to communication and learning, as well as her business-minded, customer-service mentality. On the other side is her legal expertise and killer intuition. Each holds the other in tandem as she navigates the ins and outs of culture, process, and the law in the same way that she does everything else—with impeccable balance.



brings the perfect blend of quick intellect, superb communications skills, and a knack for teambuilding to get consistently great results from her outside lawyers for her Sharp business clients. She’s the real deal.” – Eric Kremer, Partner

Pillsbury salutes Deputy GC Deborah Tyler and Sharp Electronics Since its inception, Sharp’s commitment to innovation, quality, value, and design has kept it a leader and innovator in the technology industry. Pillsbury is proud to have collaborated with Debbie and Sharp on innovative business and legal solutions along the way.

Pillsbury Winthrop Shaw Pittman LLP 1540 Broadway New York, NY 10036-4039 +1.212.858.1000








PREPARATION IS HALF THE BATTLE When he came to United Airlines, Richard Fiore found a legal department beleaguered by litigation. How the associate GC put the legal team on the offensive with a proactive strategy By Jaylyn Carlyle // Photo by Caleb Fox

Gaunt. That is how Richard Fiore found the legal department when he joined United Airlines in 2005 as senior counsel of litigation and regulatory. For a company with roughly 40,000 employees, approximately 25 attorneys simultaneously balanced nursing a bankrupt organization and handling the numerous demands of protecting one of America’s largest airlines. From a litigation perspective, the department found itself dodging bullets rather than building a stronghold. While the bankruptcy outlook seemed optimistic, the airline’s reorganization plan had not yet been confirmed. Yet, rather than shrinking back from a challenge many would have found daunting, Fiore felt buoyed. Driven. Having transitioned from partner at an outside firm to in-house just more than two years after United filed for bankruptcy, Fiore had no time for training. As the lone dedicated commercial litigator, he oversaw a variety of responsibilities

varying in subject matter, significance, and scope—handling everything from large commercial matters to antitrust matters. To familiarize himself with the business divisions, he viewed each case as a class. “It’s almost like semesters,” he says. “Half the year is heavily focused on one area, and you learn a lot about that aspect of the company. Though you don’t leave it behind and never look back, when the case is over, it’s kind of like when you take your final exam and move to your next class.” Fiore’s approach became the backbone for providing pragmatic and actionable advice at the airline. “The way that United’s legal team works best is to advise from a position of understanding the business,” he says. “We combine that with an ability to identify legal issues raised by what the business wants to accomplish.” The shift from the defensive to offensive began after the merger with Continental Airlines yielded more right-sized staffing.

“We respond to the bullets whizzing by our heads, but we will also prevent the same bullets from whizzing again. That’s our goal.” – RICHARD FIORE

“We went from being gaunt to just lean and efficient,” says Fiore. He worked closely with his manager and then-associate general counsel, Scott Garber, to shape a more proactive cadre. Using Garber’s Continental experience and Fiore’s time at United, the two found a solution that fused their best practices. “We were very focused on having approachable, accessible litigators and JAN/FEB/MAR 2016



“As much as it sometimes pains a hotheaded, Chicago Italian to say so, we don’t just fight for the sake of fighting.” – RICHARD FIORE

not doomsdayers and naysayers,” he says. They looked for people with good judgment, who understood the need to support the business and propose creative solutions while minimizing risk. With a welcoming of outside viewpoints and personnel, they focused on building a culture organically from within the litigation subgroup. From here, the team brainstormed past experiences and adopted the positives to modify their strategy. With the team amalgamated, Garber and Fiore leveraged client relationships to participate at the onset of decision-making to identify potential pitfalls. “It was definitely our goal to be very active with the business client at the early stages to prevent litigation,” he says. Fiore cites United’s dynamic frequentflier program, MileagePlus, as one effort in which his team has become heavily involved. “It’s a program that changes from time to time to benefit our frequent customers, and before doing so, the MileagePlus team often involves the litigators, so we can discuss the best ways to go about what they need to accomplish,” he says. After the merger with Continental Airlines was complete, Garber moved on and Fiore moved up into his current role of associate general counsel of litigation and intellectual property. Despite a significant uptick in proactive strategies, Fiore confesses playing catch-up is often still a reality. “There’s no question that there are times that some things come to us after the horse has already left the barn—or 48



when the horse is leaving the barn,” he says. However, his team remains cognizant not to dwell too much on decisions once they are made. Instead, they analyze each initiative in that moment and deliver helpful, appropriate advice based on risk assessment. “Sometimes the risk is great enough that we will say ‘You can’t do this,’” he says. Because his litigation team gives that advice neither lightly nor frequently, when it must do so, the business client is understanding. “It’s never our first reaction,” Fiore says. “The first reaction is always to consider another way or ensure we understand the business goal and brainstorm whether there’s a way to get there with less risk.” He likens his role to a crossing guard, slowing down momentum until a safer path appears. Fiore notes certain litigation patterns have emerged. “Since I have managed the team for the last three and a half years, we have definitely seen patterns that almost eerily align with the calendar year,” he says. One year is the year of the patent case. Another year the focus seems to be on consumer class actions. Yet another might bring a spike in personal injury suits. Fiore sees this as a testament to economic changes that might drive more or fewer opportunistic plaintiff cases. “Sometimes it’s driven by one plaintiff lawyer who comes up with a creative theory and files a new type of case, and there are 20 copycats that are frustrated that they didn’t come up with that idea.” In spite of heavy caseloads, Fiore abhors one-size-fits-all case standardization, a practice he vows will never take place under his watch. He does use processes in approaching similar cases, though. Knowing the key players in the business groups contributes greatly, as they help identify which arguments are available and successful. Again, he cites the frequent-flier cases, which they try to handle as similarly as possible. Not all cases warrant battle. Fiore’s overarching strategy is to focus on the cases worth fighting. Early analyses allow the litigation team to determine if a case

will have farther-reaching impact than one claimant, and if they have the better argument on the law. One cannot predict a win with great certainty. However, Fiore asserts that a quick review of the general law, and one’s positioning to it, can determine the value of further action. “As much as it sometimes pains a hotheaded, Chicago Italian to say so, we don’t just fight for the sake of fighting,” he says. When a suit or claim emerges, and Fiore believes United has legitimate exposure or is at fault, the airline resolves the case quickly. This allows him to focus his minimal resources, both personnel and company dollars, more effectively—a necessary approach when something as small as an e-mail taken out of context can put the company in the crosshairs of an opportunistic plaintiff. “Our clients might not always agree with me, but I think it’s good for clients in all the areas of the business to go through lawsuits because it molds their behavior going forward. They don’t want to sit in that deposition chair again,” he says. Unforeseen and unpreventable litigation inevitably persists. “That’s the challenge we always have,” Fiore says. “We don’t know what’s coming around the corner. But we can learn from the past and avoid the same sort of patterns that we’ve seen because we know a new pattern will take its place. We respond to the bullets whizzing by our heads, but we will also prevent the same bullets from whizzing again. That’s our goal.”


> REED SMITH LLP: “Rich is a savvy litigator

with a keen ability to strategically resolve complex legal matters while balancing the interests of one of the world’s largest airlines. We are very grateful for our successful partnership with Rich and United Airlines.” – Oliver Beiersdorf, Partner

There’s something about Reed Smith and high-flying clients. Reed Smith congratulates United Airlines’ Richard A. Fiore, whose performance is, well, heavenly.














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“We’ve proven that if parties approach each other fairly and with reasonable expectations early on, years of stressful, costly litigation can be avoided while maintaining solid relationships.” – MICHAEL FREEMAN





The Walgreens


Walgreens has greatly reduced its litigation volume, time, and costs by placing more focus on where it agrees with plaintiffs and less on disagreements By Jeff Silver // Photos by Caleb Fox

When Michael Freeman joined Walgreens, the company was facing several high-exposure, potentially brand-damaging verdicts. The board of directors decided to shift litigation management from a national managing counsel model to a


> BLUE WILLIAMS, LLP: “One of the rarest

qualities in the practice of law is the ability to be creative, to “think outside the box.” Michael has repeatedly demonstrated his adeptness at doing so with great results.” – Kurt S. Blankenship, Partner

more hands-on, in-house approach. They tapped Freeman to build a team of experienced trial lawyers and staff that would make decisions based on a comprehensive understanding of the company’s business, goals, and culture. An initial assessment revealed that Walgreens lacked structured programs that considered business and economic factors in addition to legal strategies. “The goal was to add a discipline to our approach while remaining focused on how we interact with plaintiffs­,” who are Walgreens’s patients, partners (vendors), and, in employment matters, its people, says Freeman. In 2010 Freeman began implementing

early case assessment (ECA) in the company’s consumer cases. He created structures and processes to support standard time frames for investigating claims and stepby-step templates for evaluating whether a case could be considered for settlement. The transactional data Walgreens has gathered allows Freeman’s team to determine much of what it needs to know very early. If opposing counsel is willing to cooperate, they can usually fill in the gaps, providing 80–90 percent of the relevant facts within the first 90 days of discovery. “By nature and training, most litigators want to turn over every rock and find out everything they might need to know—whether it is admissible at trial JAN/FEB/MAR 2016



Johnson & Bell congratulates Michael Freeman on his exceptional work and accomplishments at Walgreens.

“Most litigators want to turn over every rock and find out everything they might need to know­—whether it is admissible at trial or not. But successful implementation of [early case assessment] requires traditionally trained litigators to let go of that approach and to focus only on the big rocks.” – MICHAEL FREEMAN

C H I C AG O / C RO W N P O I N T, I N 3 1 2 - 37 2 - 0 7 7 0 W W W. J O H N S O N A N D B E L L .C O M




or not. But successful implementation of ECA requires traditionally trained litigators to let go of that approach and to focus only on the big rocks,” Freeman explains. This can result in significant benefits, even when cases do not resolve within the ECA program. “If you agree that plaintiffs are entitled to A and B, then offering to do limited discovery, so they can demonstrate why they are entitled to C, decreases costs and builds credibility.” Those unwilling to let go of traditional approaches view ECA skeptically, but Freeman obtained extremely positive

results almost immediately. In the spring of 2010 as he was preparing to launch the ECA pilot program, Walgreens acquired pharmacy chain Duane Reade. The program was expanded to include the additional 257 stores, and within 90 days, pending Duane Reade litigation was reduced by 35 percent. Since then, total claim volume for more than 8,200 Walgreens locations has been reduced by nearly 30 percent, and litigation spend in key, high-volume demographics is down 45 percent. In response to critics who cautioned that the approach would make the company a target for increased claims, Freeman says in the end, it is about incentivizing the right behavior on both sides. “We make it clear that we don’t settle just to avoid defense costs. We pay what’s fair. We’ve also proven that if parties approach each other fairly and with reasonable expectations early on, years of stressful, costly litigation can be avoided while maintaining solid relationships.” ECA can have a powerful impact at the claim stage, using what Freeman refers to as the “three As” of successful claim-handling: acknowledge, apologize, and take action. “At Walgreens we believe in approaching claimants with empathy—apologizing and, where appropriate, admitting our mistakes and demonstrating the steps we have taken to prevent the same issues from recurring. A sincere apology is powerful. It shows that you take their concerns seriously, generates good will, and can create the space needed to reach a mutually satisfactory resolution,” he says. Freeman points out that not every case is appropriate for ECA. A stringent screening process is in place to identify instances in which the opposition is unwilling to cooperate, has set unreasonable expectations, or there is evidence of fraud. In those cases, Walgreens initiates a firm and aggressive defense.


How to Build a Successful ECA Program Given the investment required, companies should consider their capabilities and comfort level before implementing ECA. Freeman suggests taking the following steps ensure your ECA program is successful: Clearly define and communicate your company’s litigation philosophy, starting with senior management. Agree on key metrics and establish a baseline. Create a case screening process that engages key stakeholders and excludes cases where liability is questionable, the opposition is unwilling to cooperate, or there is evidence of fraud. Invest in thorough and prompt factual investigations that reveal strengths and weaknesses. The faster you know the material facts, the better positioned you are for resolution, within or outside of an ECA program. Build a talented and adaptable team: experienced attorneys who make sound judgments about liability, causation, damages, and the likelihood of recovery. They also need a willingness to move faster—to balance the needs of the business and mitigate the uncertainties of litigation, including cost. Enable a feedback loop to operations that improves processes, mitigates risk, and protects the brand.




Blue Williams would like to congratulate

MICHAEL FREEMAN for the recognition of his accomplishments with Walgreens

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Jones Day congratulates Michael Freeman, Divisional Vice President and Assistant General Counsel at Walgreen Co., on his recognition by Modern Counsel.

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Michael’s accomplishments deserve a standing ovation.

ECA’s success in managing Walgreens’s consumer claims was acknowledged by leaders within the legal department and business divisions in 2014. At that time Freeman was asked to expand the approach to the company’s commercial and employment matters by assuming the role of assistant general counsel. One of the reasons Walgreens’s ECA program has been so successful is the willingness of executives to make constructive use of the feedback it produces. Changes ranging from contract terms to how retail shelves are stocked have reduced the likelihood of additional lawsuits. This highly receptive response has also created a stronger bond between the legal department and the business so that in-house counsel are viewed as businesspeople who happen to be lawyers. “Our philosophy extends beyond litigation management to a broader culture of fairness about how we treat people and approach complex problems,” says Freeman. “The increased demands and costs associated with discovery, in particular, have also forced us to do what businesspeople do every day—respond to challenges and deliver on ambitious expectations with less-than-perfect information.”

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> JONES DAY: “Michael brings an innovative The attorney responsible for this advertisement is Steve Pizzo, who can be reached at: 3421 N. Causeway Blvd., Suite 900, Metairie, LA, 504.831.4091




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approach to partnering with his outside counsel, always looking for creative techniques to add value to Walgreens and its brand.” – Michael J. Gray, Partner


INSIDE LOOKING Alan Modlinger discusses Merck’s approach to working with outside counsel to build winning teams and strategies by Jeff Silver




Alan Modlinger knows the dynamics that go into making successful in-house and outside counsel teams; he’s been on both sides. In private practice at Lowenstein Sandler PC, he handled a wide range of responsibilities for pharmaceutical and other clients, including Merck and its winning defense for In re: ScheringPlough Corp. Intron/Temodar Consumer Class Action. In 2010, Modlinger joined the in-house department at Merck, where he is counsel and director responsible for managing litigation teams, as well as internal counseling, primarily for antitrust matters. He shared how his experience has helped him fill a reliable roster of outside counsel.

MC : Are there different challenges for the external teams? AM : Outside lawyers have to appreciate the complexity of clients’ businesses. For example, while a particular case might focus on what appears to be a simple issue of product packaging, the way the product is packaged might be tied into the safety of the product or how the product is manufactured or regulated. The interplay between those disparate pieces needs to be considered when managing the lawsuit. I should add that because of this complexity, it’s also important for the entire legal team to have substantial in-person interactions. Technology makes it possible to accomplish a great deal virtually, but there’s no substitute for being face-to-face. It’s the best way to build the trust and mastery of both a case and the client’s business that’s required to be successful. MC : Have you found outside counsel have any misconceptions when they start working with your internal team?

Modern Counsel : Have you found distinct differences between your in-house and outside positions?

ALAN MODLINGER Counsel and Director, Office of the General Counsel Merck & Co. Inc

Alan Modlinger : Lawyers learn early in their careers to digest a lot of information and then communicate it efficiently. In the in-house environment, in addition to presenting the facts concisely, we also must put them into an appropriate business perspective. That can require emphasizing the big picture rather than all the finer details, but it always involves clearly identifying business risks, decision points, and consequences relating to the litigation. MC : Does Merck’s size and high profile create special legal challenges for the in-house team? AM : Yes, definitely. Merck has a critical role in contributing to public health. During litigation, there is a risk that scientific concepts and data will be distorted or misconstrued in publicly available litigation documents and media coverage. That can lead to confusion by patients and have problematic implications for public health. So carefully guarding the reputation of the company and its products becomes a critical part of managing litigation.




AM : They’re often surprised by how actively involved we are. We expect to drive litigation strategy. We push our lawyers to test and retest conceptions, consider alternate approaches, and to think creatively to develop the best case we can. I don’t want rote thinking that doesn’t look beyond what’s been done before. I think some of my strengths are analyzing legal issues and drafting written work product, so I tend to push my outside counsel for their “A+” work in those areas in particular. MC : Does that ever lead to disagreements with outside teams about strategy or tactics? AM : I’ve never had an experience in which either side was completely dug in on a particular approach. Communication to try to reach consensus is the key. I have to point out, though, that sometimes it’s actually disagreements that lead to enhancements and refinements that create the best


> ARNOLD & PORTER LLP: “Alan is incredibly

smart, an excellent writer, and extremely easy to work with. He is a thoughtful contributor to any litigation team and understands his client’s business very well. He is an extraordinarily effective advocate.” – Jeff Handwerker, Partner

photo: Michael Lund/Merck Creative Studios


Arnold & Porter LLP likelihood of a good outcome. And, if you go back to what I mentioned about trust and the importance of the relationship within the team, there may be times when we provide our input and then have to allow counsel to improvise. I’ve routinely been pleasantly surprised when outside counsel has been able to rely on a deft touch and thinking on their feet to get positive results. MC : Do you have any specific best practices you use to ensure you get that kind of productive and cooperative relationship? AM: There are several. First, although expertise is obviously important, so is being creative and open to a flexible approach. It may be standard practice to file a motion at a particular point in the case, but we also need to ask whether there are other things that could set us up to be in a better position six months or two years from now. The lawyer with the greatest experience might not always be flexible enough to engage in that sort of creative strategic process. Second, talking in-person is critical. The giveand-take of those discussions addresses details about company objectives, risks, opportunities, and approaches that e-mail just can’t replace. Sometimes it’s as simple as picking up the phone. Third, I like to be kept up to date on all developments. If there’s ever any question, my rule of thumb is that more is better than less. I don’t need to know about every document we receive from opposing counsel. But if there are significant communications with the other side, research the team is thinking of doing, or new theories, I want to be part of those discussions. Fourth, I like plenty of lead time in order to delve into issues. I frequently want to see an outline before anything is drafted. I want to see briefs at least several days before filing because they’re often how cases are won and lost. Most teams like having an engaged and responsive client. It makes for better collaboration and provides more guidance on the direction in which they should be going.

Déjà Defense In 2012, Merck won a groundbreaking case originally brought against Schering-Plough, prior to its merger with Merck. Several years before, class-action suits alleging injury due to alleged off-label marketing were consolidated and then dismissed by the US District Court of New Jersey. Modlinger was part of the Lowenstein Sandler PC team that won that dismissal. By the time of plaintiffs’ appeal, Modlinger had joined the in-house team at Merck and managed the outside teams from Lowenstein and Ropes and Gray LLP, which had handled a related criminal investigation. Modlinger says there were two components to winning the case: demonstrating that the claims these plaintiffs were bringing were much different from claims Schering-Plough had resolved with the government; and clarifying the pleading standards under Bell Atlantic v. Twombly to establish that the plaintiffs had failed to show a specific injury with a sufficient connection to the alleged conduct. Merck accomplished this by creating a “virtual law firm” through which all three teams worked jointly to develop strategy and written work product.

congratulates Alan Modlinger on his outstanding contributions as Counsel and Director of Merck. Alan’s recognition by Modern Counsel is well-deserved and we look forward to continuing to partner with him.

“We created a very cooperative operation,” Modlinger says. “There were never disputes over territory or efforts to prove the superiority of one firm’s approach—just true collaboration to achieve the best possible outcome.”

MC : Can you give an example of litigation that was successful because of an ideal inside-outside counsel working relationship? AM : For one putative class action, we created a very effective collaboration between three outside firms. One provided advice for a specific highly regulated area. Another was a top-notch litigation boutique, and the third was a local firm with excellent insight into practices in the particular jurisdiction. It was a situation in which we had the best possible expertise and were able to develop a comprehensive litigation strategy that was in line with regulatory requirements and our business needs. The interplay between all those





“Sometimes disagreements [between in-house and outside counsel] lead to enhancements and refinements that create the best likelihood of a good outcome.” – ALAN MODLINGER

different strengths ultimately helped us win that matter. The plaintiffs voluntarily dismissed the suit with prejudice.

Mayer Brown congratulates Alan Modlinger on being recognized by Modern Counsel. We are proud to have served as one of Merck & Company’s trusted outside counsel.

MC : Looking back over the time you’ve been at Merck, did you have to make any adjustments to shift from outside counsel to an in-house role? AM : The biggest adjustment was to the rhythm of the workday. In-house, you’re no less busy, but there’s more time spent talking through strategy, getting input from colleagues, and providing advice instead of producing work product. Once I got adjusted to that type of legal practice, I was actually a little surprised by how stimulating and challenging it is. I’m very happy I’ve gotten the opportunity to practice in this setting. Certainly, I sometimes miss the chance to represent a client in the courtroom. There’s something exhilarating about standing in front of a judge and responding on your feet. Making presentations to internal clients and responding to their questions isn’t quite the same experience—but I also have to say that being able to provide on-the-spot advice to a business client who needs guidance is satisfying in a way that I hadn’t fully experienced before I came in-house.


Americas | Asia | Europe |




> MAYER BROWN LLP: “I have worked extensively with Alan over the last several years. As litigation counsel for Merck, Alan is a superbly strategic thinker. He is highly collaborative and has created a great team working environment.” – Richard A. Spehr, Managing Partner (NY)


How to

CREATE AN IP PROGRAM FROM SCRATCH Mary Fuller’s plan for developing Maxim Integrated Products’ first strategic IP program by Amanda Garcia

MARY FULLER Managing Director and Associate General Counsel, IP Maxim Integrated Products

photo: Sunny Scott





The Impetus When Mary Fuller joined Maxim Integrated Products in 2008, she stepped into a company amid substantial change. A new CEO had taken the helm in 2007 and was prioritizing a different approach to intellectual property. Instead of continuing the company’s 25-year-old tradition of competitive silos among business units and within the workforce, the emphasis was placed on breaking down those silos and working together as “One Maxim.” This shift included, among other things, increased information sharing and a new, centralized IP program. “When I came to Maxim, I came into a fully formed company with a vast product portfolio and a lot of IP opportunity,” says Fuller. “And the concept of ‘One Maxim’ wrapped IP strategy around everything else, looking across the whole company to see how to leverage IP from one unit to advance the whole.” The company had plenty of innovative products but lacked a strategic IP program. That, along with more than two decades of a self-protective mentality, required a change in culture—a difficult task in itself, but, Fuller says, even more so for a female engineer and lawyer working in a 30-year-old company led largely by men. “I was in a hotbed of intelligence, with an opportunity to understand where they had been and how to put together a forward-looking, strategic program,” she says. “It was a big change from Maxim’s previous start-up mentality. In some respects, that felt like a hurdle to get over.” Fuller’s goal was to change the way the rest of company viewed IP at a fundamental level. Rather than as secrets to be guarded, IP should be shared to support the whole company. IP became its own department, complete with a budget and the power to issue patent bonuses and other incentives. Instead of separating the company, IP was now a force to bring it together.

to the C-suite: chief technology officer (CTO). Fuller worked with company leaders to convince a previous group president to become Maxim’s CTO. Together, they established what it meant to have a CTO and a patent department—to take a strategic approach to growing the company. The CTO has since retired, but having his public respect and support was invaluable to Fuller’s acceptance as a leader at Maxim. “You need a strong insider who knows the company to help you learn the technology and players and to establish yourself,” she says. Creating a framework for IP strategy was as essential as confirming high-level buy-in to it. The framework had to clearly explain the fundamentals of an exclusive IP strategy while being customized to integrate well at Maxim. Fuller drafted different parts of the program with the CTO and GC to make sure the structure matched Maxim’s culture. That process, along with the CEO’s support, gave Fuller the authority she needed to elevate the plan to the next levels of the company. She met with vice presidents, senior scientists, and general managers, and she embarked

The Plan Fuller’s first task was to establish credibility. It helped that she had worked in the trenches as an electrical engineer and understood what it meant to be on a project team and hit benchmarks. Even more crucial was helping Maxim add a new title

Mary Fuller joins Maxim Integrated



on a tour of Maxim offices around the world to explain strategy, provide IP education, and build trust. A patent-review committee was established with people from across the world. Because the program relied heavily on critique and thoughtful feedback, the committee had to develop a system of communicating honestly with one another, especially about ideas that were not worth the investment in a patent. “Getting the team to a place of feeling comfortable asking critical questions was difficult,” says Fuller. “We started with a simple show of hands but eventually moved to anonymous voting.” The Results Across Maxim’s international framework, the cultural understanding of IP has changed. The enhanced integration and communication has built trust among departments and saved the company money. Now, when one area is in need of a tool or resource, instead of paying an outside developer to create it, it can most often be found in another part of Maxim’s operation. “It’s important to have that

IP by the Numbers


Fuller’s IP program not only increased the number of patents issued to Maxim, but it also improved their quality by vetting patents on their relevance and value. Now the company’s portfolio is on track with the organization’s growth.



177 171

Patents Filed




133 120


16 16 2004















Patents Issued 2009







“I was in a hotbed of intelligence, with an opportunity to understand where they had been and how to put together a forward-looking, strategic program.” – MARY FULLER

kind of cross-pollination across the board,” says Fuller. The program tracks expenses for each patent, so when one is determined to no longer be a good fit for Maxim, it can be sold at an appropriate price. In addition, on the occasion that the CEO decides Maxim should no longer support a certain technology, the company now has the ability to spin out new businesses at least partially based on those patents. That means that instead of being let go, employees can often find new positions in other projects within Maxim or at the acquiring companies. “In many ways, the patent program keeps us accountable,” says Fuller. Statistically, companies bolstered by appropriately sized patent portfolios have stable and higher stock values. Because of that, Maxim’s patent portfolio has grown from being proportionately undersized to consistent with the growth of the company. Less than a year into Fuller’s tenure, Maxim went from having no strategy for reviewing patents to having a fully formed program. “I was creating something new out of old cloth,” says Fuller. Maxim’s IP is more focused than it has ever been. It has a strategy that matches the business’s overall vision, and that strategy has added to the health of a collaborative company culture.

Ropers Majeski Kohn & Bentley PC congratulates Mary Fuller of Maxim Integrated for her recognition in Modern Counsel. Whether acting as our corporate clients’ outside “general counsel,” or advising and collaborating with in-house counsel, RMKB attorneys advise businesses on issues ranging from employment law to intellectual property. Over the past sixty years, Ropers Majeski Kohn & Bentley has conducted a multi-location practice offering business and pre-litigation advice, civil litigation and transactional services to domestic and international businesses and individuals.


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Jerry Murrell opened his first Five Guys restaurant in 1986 in Arlington, Virginia. Over the next several years, he and four of his sons opened four more locations in the Washington, DC, metropolitan area, gaining iconic status along the way. The Murrells began offering franchises in 2003. In just several years, the family sold all of the North American rights. The complexities of franchising for a major property are inherently abundant, but they become even more so in a fast-growing chain such as Five Guys. Deputy general counsel Adam Aberra spoke with Modern Counsel about the company’s strategy for growing the brand in new markets.

Modern Counsel : How did you end up working at Five Guys?

ADAM ABERRA Deputy General Counsel Five Guys Enterprises

Adam Aberra : I moved to the Washington, DC, area in 2006 to join the corporate franchise and distribution team at DLA Piper. I learned about Five Guys when a friend included one of their bacon cheeseburgers as part of a “welcome to DC” care package. It was amazing and left an impression. So much so that when one of my clients later mentioned an interest in securing the franchise rights for Five Guys in southern California, I fully endorsed it. We successfully negotiated the deal with Five Guys, and at the closing lunch, the general counsel pulled me aside and asked if I’d like to join the company. They were growing so fast then and needed help. The more I learned about the company, the more I liked it. It was very much a right time, right place kind of thing. MC : You joined in 2008, and the company sold rights to more than 1,000 locations in North America shortly after?




AA : That’s right. During my first four years, I focused my attention on restructuring and negotiating our development and franchise agreements throughout North America. Then, in 2013, we started looking across the water. Once we started thinking seriously about going overseas, the Murrell family determined we needed more control over the brand’s rollout than our franchise deals afforded us. We decided to look for a joint venture (JV) partnership and were fortunate to find an excellent partner in Sir Charles Dunstone, one of the most successful entrepreneurs in Britain. He is primarily known for cofounding Carphone Warehouse in his apartment in 1989 and growing the company to a current valuation of approximately $6 billion, following its recent merger with Dixons Retail. I worked with his legal team on the JV agreement and related licensing documents, and within a few months, London’s inaugural Five Guys opened in the Covent Garden district. We now have 27 stores in the United Kingdom (UK). MC : What are some of the differences between your JV and franchise deals? AA : The JV we have with Dunstone is set up as a UK limited corporation, with each party having equal input. That gives us decisional influence over site selections, lease negotiations, and, perhaps most importantly, who is hired at the executive, management, and store levels. We approach the JV, essentially, as an extension of our company that we operate with an expert who knows the local market and with whom we share both the risks and rewards of the business. A franchise, on the other hand, is a different type of partnership in that it is essentially a business that is independently owned and operated by the franchisee. The franchisee pays for the rights to use our name and system, but they determine whom they hire, which site locations to pursue, the best ways to penetrate their respective markets, etc. We provide training, support, and access to our trade secrets. But at the end of the day, the business is theirs to

photos: Insana Collins (portrait), Five Guys


operate. The financial arrangements are also different. With a JV, we earn 50 percent of the net profits. With our franchise locations, we earn between 6 and 8 percent on gross sales. MC : Despite the success of the JV model in the United Kingdom, you decided to go with franchises in the Middle East. Why? AA : Several countries in the Middle East require the majority owner of a business to be a natural citizen of the country, eliminating the parity of the JV option. We were fortunate to partner with Mohamed Alabbar, the developer of the Burj Khaliffa in Dubai, the tallest building in the world. I negotiated the principal agreements with him and his team for the acquisition of the Five Guys franchise rights for the United Arab Emirates, and they opened their first location in the Dubai Mall in May of 2015. That store has surpassed Covent Garden’s sales records—which had been our most popular store—and is enjoying the most foot traffic of any of our locations, with just less than 3,000 customers a day. It’s been truly amazing to watch this brand cross borders and cultures in such a remarkable way. MC : What have been your biggest challenges expanding overseas? AA : Finding quality food suppliers. The Murrell family is doggedly particular about each ingredient. We only use beef that is fresh, never frozen, and each burger is made to order. Our buns are baked fresh using a proprietary mix that we’ve been able to replicate in each market. Our fries are prepped daily from potatoes grown in Idaho and places that have a similar climate and soil density. The Murrells tested 200 different pickles in the UK before finding a supplier they were happy with. There are so many details that go into this level of quality control, but we want our customers in Cambridge, England, to have the same experience they do in Cambridge, Massachusetts, and that starts with the food. There’s simply no cutting corners or compromising when it comes to the ingredients. We have a very talented and determined supply chain team that makes that possible.

Five Guys’ Covent Garden store (pictured above) was the first of 27 opened in the United Kingdom. It held the record for most-popular store until it was surpassed by the Five Guys in Dubai Mall in the United Arab Emirates.

Franchises versus Joint Ventures FRANCHISE A franchisee pays a company for the right to sell products or services using the company’s name, image, and intellectual property. The business is independently owned and operated by the franchisee. Agreements are public documents. JOINT VENTURE Two parties agree to introduce one party’s products or services to a market in which the other party has particular expertise. Operational decisions and profits are typically shared equally. Agreements are private documents.

MC : Which country will be next and which model will it be? AA : France, if things go as planned. We decided to go with a known quantity, so our JV deal with Dunstone will cover our locations in France. MC : Jerry Murrell has managed to keep Five Guys private. Do you see that as an advantage? AA : For now, being private gives us more flexibility. There have been times, for instance, when the market seemingly mandates that we add something like grilled chicken sandwiches to the menu. But that would dilute our brand, so we don’t do it. There had been some outside pressure to go global soon after the North American rights sold out, but the Murrells had the foresight to know we weren’t ready then. We don’t have to answer to shareholders or market fluctuations like public companies do. The ability to set our own course is significant. The fact we’re family-owned is also important. A number of interested buyers have approached Jerry [Murrell] over the years, but he bases his decisions on what’s best for the family. He started this company by telling his sons they had a choice: go to college, or use the tuition money to start a family business. They chose the latter, and all five sons work for the company. He wants to make sure Five Guys continues to be something they can share, build together, be proud of, and bequeath to their children and grandchildren. Being private allows him to keep that focus. JAN/FEB/MAR 2016



NO VACANCY David Sloan joined Sunstone Hotel Investors in February 2007 as counsel for its in-house design and construction department, later taking on real estate transactions and corporate work. In 2009, he gained even more responsibility after the general counsel, as well as nearly 40 percent of Sunstone’s work force, was laid off after the recession. Sloan officially became general counsel in February 2013 and is now the company’s sole in-house lawyer. He shares how he works with outside counsel to fill the gaps in his lean department. By Melissa Anders

Modern Counsel : As Sunstone’s sole in-house lawyer, how do you handle such a large workload?

DAVID SLOAN General Counsel Sunstone Hotel Investors




David Sloan : First and foremost, we’ve identified the primary legal and regulatory matters that are critical to the company. Second, we’ve aligned ourselves with outside firms to fill the internal knowledge gaps. These two important steps are crucial in laying the foundation of a successful in-house legal department, regardless of size. While a fair share of the day-to-day legal work for Sunstone is done internally, we’ve refined our internal

processes to be flexible as our workload expands and contracts. MC : How do you manage outside legal spend with such a lean in-house staff? DS : Over the years we’ve strategically partnered with lawyers who we enjoy working with, irrespective of which firm she or he is associated with. We’ve been pretty successful at identifying the strong suits of our outside legal partners and strategically engaging them in an efficient and cost-effective manner. Since 2009 our outside legal engagements have, for the most part, photo: Barnet Photography


“Beyond cost, quality and bedside manner— responsiveness to us, ability to quickly turn around a product, and ability to be collected under pressure— are paramount [in outside counsel].” – DAVID SLOAN

been on a fixed- or reduced-fee basis, which is easier to achieve as the volume of work escalates. MC: What criteria do you evaluate outside firms on? DS : We want quality work at a competitive rate. There are certain matters, such as securities and large transactions work, in which it’s more important for us to be right, so we’re less focused on cost. But for most other matters that we consider routine, cost is very important to us. We feel there is a large legal talent pool out there and believe that should be a driver of cost in the right direction. Beyond cost, quality and bedside manner—responsiveness to us, ability to quickly turn around a product, and ability to be collected under pressure—are paramount. MC : As the GC, how do you manage relationships with outside counsel? DS : Legal matters at Sunstone span the law practice spectrum, including securities and real estate work, human resources, intellectual property, and more. You name it, we’ve likely encountered it. For the most part, I like to be the front person for all legal matters involving the company, especially at the initial interaction between the company and outside counsel. By doing this, I’m able to distill the issues for outside counsel, which helps on the efficiency and economic fronts.

Key Players David Sloan’s go-to outside counsel “We worked with Latham and Watkins twice in the fourth quarter of 2014 mortgage refinancing, and we completed a new credit facility in the second quarter of 2015. Steve Stokdyk, our outside securities counsel there, helped take Sunstone public in 2004 while he was at Sullivan & Cromwell. Similarly, Kevin Ehrhart, who was formerly with Allen Matkins, has worked with Sunstone on real estate and finance transactions for nearly 15 years. We worked with Kevin and his finance colleagues, given their abundance of experience with similar transactions for Sunstone and the firm’s many other clients. While mortgage financing is fairly routine, credit facilities are often complex, given there’s usually a syndication of lenders and varying hotbutton issues for each. Kevin’s familiarity with Sunstone and his team’s experience with financing work were beneficial to both Sunstone and the lender group. “Another lawyer we’ve followed over the past five or so years is David Egdal, formerly with Gibson Dunn and now with Shartsis Friese out of San Francisco. David very much meets the quality and personality hurdles and is highly attractive from an economic perspective, given his new billing structure.”

Abu Dhabi









New York

Century City

Orange County








San Diego


San Francisco



Hong Kong

Silicon Valley





Los Angeles

Washington, D.C.

* The Law Office of Salman M. Al-Sudairi in association with Latham & Watkins LLP




A MOVING TARGET How Minnesota’s baseball team negotiated partnerships to make a new park possible by Bridgett Novak

Today, Target Field is a diamond of green that, outside of game days, is a tranquil foil to the city of Minneapolis around it. Looking at it, you wouldn’t imagine that it took 13 years of contentious negotiations to build. Challenges to secure state funding, disagreements over land rights and costs, logistical problems concerning the location of adjacent highways and rail lines, and threats by Major League Baseball to relocate the field’s home team were all part of the origin story 66



of the Minnesota Twins’ new baseball diamond. For the last four years of the battle— from 2006, when the state signed the enabling legislation, until 2010, when the ballpark opened—Twins vice president and general counsel Mary Giesler was focused on the end goal: getting her beloved baseball team into a new home. At the time, Giesler was a partner at Kaplan, Strangis and Kaplan in Minneapolis. The team was one of her biggest clients, and she negotiated and prepared many of the

agreements for the ballpark. “Well over 100 individual documents had to be produced, and all of them crossed my desk,” says Giesler. “This project was what I focused on 24-7 for those four years.” The field today is a LEED-certified, open-air ballpark with 200 radiant heaters around which fans congregate in the spring and fall. Under the natural-grass playing field, 41 miles of heated tubing are installed to make spring games and practices possible. It features an irrigation system that saves two million gallons of

photo: Brace Hemmelgarn/Minnesota Twins


Outside the Office What does Mary Giesler do on her days off? “I go to baseball games,” she admits with a laugh. “I was a Twins season-ticket holder before I got the job and continue to be one today.” Growing up in Aitkin, Minnesota, her family listened to Twins games on the radio, and if one was on, her father wouldn’t leave the house until it was over. “He would be over the moon to know I have this job.”

water annually. The year it opened, ESPN the Magazine ranked Target Field as the number one baseball stadium experience in North America. If You Build It, They Won’t Leave The team lobbied the state for years to help fund a new ballpark, but it wasn’t until Major League Baseball threatened to relocate the team that state legislators agreed. The ballpark’s budget, which included the land, ballpark, infrastructure, and fan amenities, started out at $480 million and was later increased to $555 million. Hennepin County was responsible for $350 million (including $90 million for infrastructure costs), and the Twins contributed $195 million. Target Corporation, which bought the naming rights for 25 years, the Minnesota Department of Transportation, and the Minnesota Ballpark Authority added funds to the pie. To pay its part, the county issued bonds, then retired the principal and interest from a specifically approved 0.15 percent sales tax. “This project was übercomplicated,” says Giesler. “The field is literally built over and around a federal highway, railroad tracks, and a light rail station. There are horizontal and vertical land rights. In fact, the vertical survey includes 114 individual tracts within the ballpark property, with layer upon layer of interests and agreements. It’s crazy.” Negotiating to move railroad tracks to make way for the field was one layer, but to build a pedestrian promenade above the tracks, the project’s construction manager had to also consider train schedules to work out when building could take place.

Whose Domain? Another difficulty was that none of the parties involved in the project owned the site. “The landowners thought it was worth more than the county did,” Giesler says. “The only way to get around that and proceed was for the county to condemn the property.” The negotiators reached a settlement, and the Twins agreed to contribute additional funding for non-land infrastructure costs. Because the park would be a public space, and the baseball team is a private company, the state created the Minnesota Ballpark Authority to oversee the field’s design, construction, and operation, as well as ensure public funds were used wisely. The legal terms of ownership are nuanced. The ballpark authority owns the land, and the team is the tenant in a 30-year lease. The tenant is responsible for the operation of the facility, which includes procuring service providers, vendors, concessionaires, and cleaning crews for Twins games and special events held throughout the year, such as concerts, high school and college games, and business meetings. Beyond the Diamond The public-private partnerships that made the ballpark possible were also part of Target Field Station, a $79 million development that opened in June 2014. It encompasses a transit hub that serves 500 trains each day, a public plaza, a 1,000-seat amphitheater, a green space, office space, a parcel for future commercial development, and a 286-spot underground parking garage. And it’s all adjacent to Target Field. Ten public entities and three private groups—the Twins, Target, and United Properties (which is owned by the family that owns the Twins)—contributed to the project. Hennepin County owns the property, but the Twins are responsible for the upkeep and programming. There are separate agreements covering the operation and maintenance of the other components, such as the light rail and commuter rail areas, the parking garage, and the bicycle path. “The coexisting responsibilities among public and private entities for the different transit and public gathering spaces is very unique,” says Giesler. Construction took three years, “but, oh, was it worth it,” says Giesler. After moving to Minneapolis in 1961, the Twins, and Giesler, finally have a home built specifically for them.

We congratulate

Mary Giesler, General Counsel at Minnesota Twins Baseball Club, on her recognition for excellence in Modern Counsel

Hinshaw & Culbertson LLP is a full-service law firm with over 500 attorneys providing coordinated legal services across the United States, including representing our clients, such as Minnesota Twins Baseball Club and other professional sports teams, in stadium and related development matters.

Arizona | California Florida | Illinois Indiana | Massachusetts Minnesota | Missouri New York | Rhode Island Wisconsin  London




A HUB IN THE SPOKES Tesoro’s associate general counsel on being a facilitator of the business, managing an oil boom, and what it’s like in the fast-paced oil and gas industry by Michelle Markelz

BARRON DOWLING Associate General Counsel Tesoro

Modern Counsel : Tesoro and Tesoro Logistics have quite a portfolio with their refining, marketing, and logistics businesses. What does that diversity mean for you as an associate GC? Barron Dowling : At Tesoro Logistics, we operate everything from marine terminals to oilfield trucking operations with pipelines, storage, and distribution terminals in 68



between. This portfolio can keep a lawyer on his or her toes. We encounter issues related to oil spill response, marine and maritime law, and large transactions with sophisticated customers. Our refining and marketing group ships crude oil and refined products on thirdparty regulated pipelines, so I am constantly mindful of the logistics involved with handling those volumes. For example, we regularly negotiate agreements with companies, including our affiliate, to expand our pipeline capacity and develop new pipelines. I am responsible for negotiating the rates Tesoro pays to use those third-party pipelines, and at any time, I probably have at least 15 ongoing rate proceedings I’m overseeing. Resolution of some past cases has provided hundreds of millions of

dollars in economic value to Tesoro through refunds and reduced rates. The oil and gas industry is more fast-paced than most might imagine. For example, a cargo of crude oil might become available, and my team and I might have only a few hours to make a decision about whether to buy it. A great deal of consideration and teamwork goes into that decision. Our team must collectively determine the suitability of the oil for our refineries, assess our logistical ability to unload it, vet the quality of the vessel, confirm the import regulatory status, structure the payment and financing terms, review the contracts, and then make a final decision within a limited time frame. These types of transactions are part of the normal course of our business since we operate on a large scale. MC : Having been with the company for 17 years and experiencing its growth, have you had to become more of a generalist to accommodate new lines of business? BD : Throughout my career here, I’ve represented all the areas of Tesoro’s business. Tesoro was always one of my clients when I was at a private firm. Eventually, I was brought in-house to represent our upstream operations, until we sold that division in the late 1990s. After that, I started working for the refining group, where I was surrounded by many extremely bright people who managed a sophisticated, complex, and constantly changing process. As Tesoro has grown, and particularly after we formed our master limited partnership, I have become more specialized

and shifted my focus to our logistics business. My breadth of experience over my career is always valuable and often translates well to different types of transactions. Still, there are always new challenges. If I don’t learn something every day, then it’s not a typical day. MC : Talk about the acquisition of QEP Field Services. Why was that a strategic transaction for Tesoro? BD : Acquiring QEP Field Services (QEPFS), now called Tesoro Logistics Rockies, was a big step for us. Tesoro Logistics, as it existed, had not been in the natural gas logistics business. The driving factor behind the acquisition was to expand our logistics services and capabilities into natural gas, and that decision required a lot of due diligence. Our acquisition of QEPFS, which was a company with solid existing operations and natural gas expertise, positioned us to become a full-service logistics company. In areas like North Dakota there is a lot of opportunity for synergies between natural gas and our existing crude oil pipeline network. We have been expanding our crude oil pipeline infrastructure in the region following the Bakken shale boom and handling the natural gas is a natural extension of that operation. MC : Have you faced any challenges incorporating QEPFS or in growing the natural gas business? BD : The integration is going well. We have certainly had to focus on different operational aspects of the natural gas business, and are photo: Tesoro


still working to fully integrate the new business into our existing scope of operations. In general, our business is constantly changing and we must manage the pace of growth. For example, new regulations have been enacted in the Bakken region following the recent production boom. In a boom environment, labor becomes scarce, and the work required to acquire easements for pipelines becomes more complex. For example, we have operations on tribal lands, so we must work closely with tribal councils to ensure we are operating with respect and within scope. Additionally, our business team must source truck drivers and contractors when the labor landscape makes them hard to come by. While these are business issues, we still get involved from a legal standpoint. MC : What’s the dynamic like for lawyers collaborating with the other functions at Tesoro? BD : The lawyer is like a hub in the spokes. On larger transactions, he or she should work to pull all the necessary pieces together and digest them. If the lawyers have questions, then they go to the subject-matter experts to understand the issue in greater depth. A large function of the legal role at a company like Tesoro is being a facilitator and a communicator among the business functions. If I hear something from IT and it is relevant to a deal, then I need to communicate it to another area of the company, such as accounting, so we’re fully cognizant of all key details related to the deal at hand. MC : What are your best practices for being the best “hub” you can be?

“[A lawyer] should work to pull all the necessary pieces together and digest them. [...] A large function of the legal role at Tesoro is being a facilitator and a communicator among the business functions.” – BARRON DOWLING

Manatt congratulates

Barron Dowling Vice President, Associate General

BD : I am most effective as a collaborator, and I try to be the best resource I can be for our business teams. Many different people work on deals, and you have to know what is happening across all levels and functions to do the job right. Communication is key among everyone who is working on a transaction. You need to establish an open channel of communication and a framework to ensure that communication is clear and resonates properly. Translating the company’s business needs into a legal framework is probably my greatest strength. This requires a collaborative effort between lawyers and business experts where each much listen carefully and then assess the opportunity. I’d encourage those just starting out to be bold and unafraid to expose yourself; don’t be afraid to ask what may seem like a silly question. If you don’t understand something, ask about it, and don’t stop until you understand it. Sometimes those “stupid questions” uncover problems no one has considered. If you source feedback and knowledge openly and sincerely, then business experts are usually glad to educate you, and often, they end up learning something, too.

Counsel – Logistics, Strategy, and Business Development

We applaud Barron for his encyclopedic knowledge of the petroleum industry and practical approach to solving complex problems. With respect, your friends and colleagues at Manatt.

Manatt, Phelps & Phillips, llp




“I looked everyone in the eye and talked to them one-onone. I didn’t make promises I couldn’t keep.” – DAVID ROYSTER, ZIMMER BIOMET




LEAD People like to equate business and sports for good reason: there are many apt parallels to be drawn and lessons to be learned from the playing field. As the attorneys in this section can attest, great coaches are defined by their ability to unite people in pursuit of a common goal. Whether your team rallies around you is a product of strategy.

INQUIRY Do you lead by force or inspire others to your cause? Does your organization have a leadership development program? If not, how can you formally or informally develop leaders at your company?

Boost your soft skills and pick up some new strategies for change management with Deloitte’s guide to M&A integration, “Leading through transition: Perspectives on the people side of M&A”. On page 78, David Royster reflects on the wisdom of one of sports’ greatest leaders, Mike Krzyzewski. Find a short list of Coach K’s best leadership advice in the September-November 2011 issue of the Academy of Management Learning and Education.

JOIN US ON LINKEDIN. Share your thoughts and find out what others are saying.




TACKLING TRANSITION Kevin Warren is not only the Minnesota Vikings’ first COO. He is also the highest-ranking African-American business executive for an NFL team. He talks about continuing a legacy established by his father and the transition from the legal department to the front office. BY JEFF SILVER

Modern Counsel : What has been the biggest difference between your former role as executive vice president of legal affairs and your much broader responsibilities as COO? Kevin Warren : The most obvious change is the wide-reaching implications of every decision we make. As lawyers we tend to focus on how minute details might affect 72



a specific client, but now each choice goes through a prism that reflects on the entire organization. So I have to ask, “What impact is this going to have financially, legally, operationally, on our brand and with the fans?” And even though I do not manage the football operations department, I also have to consider the impact of business decisions there, too.

MC : With all of that in mind, have you changed how you approach your job or how you prioritize what you do?

photo: Andy Kenutis/Minnesota Vikings

KW : I have always believed that communicating as clearly as possible is important in everything we do. That has become an even stronger priority because of the range of responsibilities I have now. Transparency is a big piece of it because I


want everyone to understand why decisions are made. Even if they do not agree, I want them to feel that the choices are authentic and have been made based on sound business reasoning. I am a very judicious and methodical person, so I measure 10 times and cut once—and along the way I try to gather wisdom from a few key, trusted advisors, and I pray a lot for wisdom and guidance. I also keep a 20-point checklist in my head at all times to make sure I am considering a single issue from every angle—including how it will impact the broader organization. MC : In addition to the fundamental details, how do you manage so much feedback from different sources at the same time? KW : I have tried to structure our processes so that getting input from various individuals is a normal part of day-to-day business. For example, prior to my becoming COO, we didn’t have organization-wide staff meetings. Now we have them on a monthly basis. It makes everyone aware of what we are working on and our vision for the future. It also creates opportunities for the staff to feel more engaged, involved, and valued in our ongoing operations. In addition, I have also pledged to meet privately with every individual in the organization within the first year. That involves many meetings because we have about 160 employees and the meetings last anywhere from 30 minutes to three hours. But they have been fantastic opportunities to find out what is important to our staff. The two questions I ask each person are: “What can we provide to help you do your job at the highest level?” and “If your family bought the franchise tomorrow, what would you improve to make this a world-class place to work?” MC : Did your previous positions prepare you for handling your new responsibilities? KW : I have worked with some incredibly talented people in my career, but I worked with two particularly wonderful mentors. One was Mike Slive, the former commissioner of the Southeastern Conference. Among the many lessons he taught me was how to deal with people and to recognize how valuable they are. We tend to think a lot about business and networking and the alliances we build to help reach our goals, but they are essentially about the people that are involved, about the way we treat them and acknowledging their importance in what we are trying to achieve. Completing our new stadium, for example, is largely dependent on our relationships and treating them respectfully. That includes our fans. We do not manufacture a physical product, so I am constantly aware of the experience we provide our fans and their perceptions. We have to earn

their trust and devotion through everything we do every day. Some people would argue that I am talking about the Vikings brand, but to me it is all the same thing. It is about never taking the people—our fans or our staff—for granted. MC : Is your legal background an asset in your role as COO? KW : It has given me a strong basis in the business fundamentals that go into successful operations. And almost every decision has extensive legal implications. I am not able to spend the same kind of time I used to on the minute details of each issue, but I know I can rely on the legal staff to provide everything I need to know. I still manage the legal department, and we have worked together and known each other for a long time. Every person there has interned with us for at least two summers and has been part of the team for five to seven years. That provides tremendous consistency, which, speaking of mentors, is something former NFL head coach Dick Vermeil stressed when I was with the St. Louis Rams. So the staff knows I am going to ask a lot of questions about everything they bring me, and I’ve taught them—just like Mike Slive and Coach Vermeil taught me—to be prepared to answer 100 percent of the questions that might come up. You don’t make it up if you don’t know the answer, but you have to be prepared—and inevitably, the smallest details turn out to be the most important.

A Partnership With Purpose The Vikings had several key criteria as they searched for appropriate stadium naming rights candidates. They wanted an iconic Minnesota brand and a company that understood the importance of connecting with fans and the community. They fulfilled both requirements in their 20-year deal with U.S. Bank. The new partnership is exemplified by the Places to Play program. Both organizations are funding the $1 million grant-making initiative to support parks, playgrounds, athletic facilities, organizations, and sites that contribute to communities’ quality of life. “If we could not find the right company with the right fit, we were prepared to open the new stadium without a name because it really has to stand for something,” Warren says. “With U.S. Bank I am proud to have the opportunity to work on a project that is going to be a game-changer for the Twin Cities community and the crown jewel of the NFL.”

MC : When you were 12 years old, you survived serious injuries after being hit by a car and later went on to play college basketball. How do those events influence your views of working at the highest levels in professional sports? KW : Sports were very important in my house growing up. My parents and siblings were all athletes, so it is in my DNA. When I was injured, I spent weeks in traction in the hospital and then months at home in a body cast. I was told I would never compete athletically again. I could not stand up when I got out of the cast, and there were days when I thought I was not going to make it. I learned then that you can never take a single day for granted and that hard work can conquer most issues. Five years later I was playing Division I basketball for the University of Pennsylvania. We went to the Suntory Bowl in Japan, and I remember standing at the scorer’s table waiting to go in against Louisville and praising God for how far I had come. That was incredibly special. It taught me to be tenacious, aggressive, work hard, make good decisions, never quit, stay positive, and always look for the opportunities in every situation.




MC : You mentioned that your father was an athlete, but he was also a career educator. Do see yourself following in his footsteps?

The attorneys at Briggs and Morgan congratulate

Kevin Warren for his outstanding contributions to the Minnesota Vikings Football Club.

KW : I do. He played professional football in the late 1940s for the Brooklyn Dodgers in the All-America Football conference and went on to be the first African-American president of a major college bowl game when he was on the board of directors for the Fiesta Bowl. So I look at him as a myth-buster and trailblazer. He was a man’s man. I realize that I have a unique chance to help continue his legacy. Just like he did, I can change people’s perceptions of black men, of sports, and of businesspeople in general. But another part of what I want to do is make the Wilf family (the Vikings’ owners) proud. I want them to look back and say that one of the best decisions they ever made was promoting me to COO and giving me other various opportunities along the way. MC : What are your key goals for yourself and the team?

As one of Minnesota’s largest and most esteemed law firms, Briggs and Morgan provides exceptional client service and sound legal counsel to clients nationwide.






St. Paul


KW : For the Vikings organization, I want to create the most dynamic and creative business operation in all professional sports. Not just in the NFL, but all sports. I want to develop a best-in-class mentality in everything we do so that employees are excited to work for the Vikings, and their parents and families are proud that they are part of the organization. To accomplish that, we are working on leadership development with experts like Simon Sinek, who wrote Leaders Eat Last, and others so that we can train everyone how to create and deliver a topnotch experience in every aspect across the board. And, of course, I want to do everything I can to help our franchise win multiple Super Bowl trophies. On a personal level, my parents taught me to leave a place better than it was when I arrived. Consequently, I keep my eyes open not for new challenges, but for new opportunities to accomplish things—like our new stadium—that are executed to the highest possible standards of integrity, quality, and respect for the people involved. That is what I think about every single moment of every single day.


A Leader’s Shadow The influence of a leader is omnipresent. Whether that influence is positive is a matter of how it is exercised. In his role as deputy general counsel of Zimmer Biomet, David Royster has both seen the power of face-to-face communication and learned that isolation can speak just as loudly—though not to his benefit. At the medical device company, Royster has leveraged his leadership to motivate his team through growth and tough staffing decisions. BY BRIDGETT NOVAK

Modern Counsel : After graduating from law school, you joined Baker and Daniels (now Faegre Baker Daniels) in Fort Wayne, Indiana. Was that an easy transition? David Royster : Yes. Even though I grew up in North Carolina, I was going to law school in St. Louis, and I’d been a summer associate at the firm, so it already felt like home. DAVID ROYSTER Deputy General Counsel Zimmer Biomet

MC : The first case you worked on was for Zimmer? DR : That’s right. I joined the firm in September 1997 and immediately got pulled into a patent infringement case. After 18 months, we secured a nice result for Zimmer. We continued to get work from them, mostly product liability cases and commercial litigation. About 50 percent of my time at Baker and Daniels was spent working on matters for Zimmer.



NAGELBERG LLP : “David’s intuition and instinctive

ability to focus on the critical issues, especially in complicated, hotly contested litigation, is a rare quality. He is first-rate, a true professional, and a privilege to work with.” – Michael Elvin, Partner

photo: Cox Studio

MC : Then in January 2000, you decided to join Zimmer full-time? DR : I wasn’t looking, but I got a call from Zimmer’s general counsel. I’d gotten to know him and enjoyed working with the team. Someone in his department was retiring, and he wondered if I’d be interested in joining them. It was too good an opportunity to pass up, and I’ve been here ever since. MC : What are some of the benefits of working in-house versus working for the same company as outside counsel? DR : Companies that make products that people use every day—and, in the case of Zimmer Biomet, that restore people’s mobility—are the engines behind our progress as a society. I like being part of that. The people I work with are innovative and focused, and it’s an honor to help them deal with the legal issues of the marketplace. I enjoy learning what it takes to drive business goals and initiatives—and how difficult and complicated it can be. There are so many stakeholders—customers, patients, stockholders, employees—who are affected by the decisions and products that are made here. I’m impressed by the enormity of what business managers do and all the different skills that are called upon.




MC : How have your responsibilities changed during the 15 years you’ve been with the company?

The best counsel comes from understanding what makes your business tick. Quarles & Brady is proud of our partnership with David Royster and Zimmer Biomet.

DR : When I started, we had just four or five in-house lawyers. We all did whatever needed to be done, which included a lot of transactional work, contracts, business development deals, etc. The year after I joined, we spun off from BristolMyers Squibb and became a publicly traded, independent company. In 2003, we acquired Centerpulse, doubling our annual sales to $3 billion. Since I’d been with the company for a few years, I had a good foothold, and the legal department grew underneath me. I took over litigation, including for the new dental and spine divisions we acquired as part of the Centerpulse deal. Our newly merged global legal department has approximately 35 attorneys. MC : The company’s latest move was its $13 billion merger with Biomet (which closed in June 2015). What was that like? DR : From the time the deal was first announced, its closing took 14 months. There were very few hiccups along the way. Both companies are based in Warsaw, Indiana—known as the “orthopedic capital of the world”—so a lot of us already knew each other, and we had similar corporate structures. MC : How has the legal department changed since the merger? DR : Zimmer and Biomet had about the same number of in-house attorneys before the merger. There were some redundancies and resulting cuts, which happened in every department. The total number in my group hasn’t changed, though there has been some reshuffling. I oversee seven


> QUARLES & BRADY: “David has the ability




to successfully drive the biggest, most high-stakes initiatives, to track the big picture while skillfully managing the details. It is inspiring to watch him at the reins.” – Josh Fleming, Partner

“I looked everyone in the eye and talked to them one-on-one. I didn’t make promises I couldn’t keep.” – DAVID ROYSTER

attorneys now: three in litigation, one each in the dental and spine divisions, and two in the hip and knee/reconstructive division. MC : How did you maintain morale when people knew job cuts were coming? DR : A consulting firm helped us with the integration. They gave us some talking points, but when push came to shove, I put those aside because they didn’t feel authentic. People are people, not just numbers on spreadsheets. I looked everyone in the eye and talked to them one-on-one. I didn’t make promises I couldn’t keep. I told them that none of us was immune; no one knew who was going to be let go. So there was uncertainty all around. I couldn’t give any assurances, but I told them that the people making these decisions were being very careful and taking them into account. MC : What other principles underlie your leadership style, and where did you learn them? DR : Coach Krzyzewski is a big inspiration. I know he has a reputation for being difficult to deal with, but he has such clear command of his program. He makes decisions and moves on, and his players and coaching staff would walk through walls for him. The Duke corporate education department, which provides business consulting services, has even developed a program that uses some of his methods as a teaching tool. Two of the quotes attributed to him that I like a lot are: “Effective teamwork begins and ends with communication,” and “Making shots counts, but not as much as the people who make them.”


MC : Has Zimmer provided training for its managers? DR : Yes. The programs I found most helpful were taught by Senn Delaney, a culture-shaping firm. One module was called “shadow of the leader,” which is based on the theory that people in positions of leadership influence the behavior and actions of others, thus casting a shadow across the organization. When I come into the building in the morning, if I’m grouchy, the people on my team are on edge; if I’m in a good mood, that can reflect positively on everyone else’s day. I used to think I could just close my door if I was having a bad day, but that’s not how it works. Another of their modules is called the “mood elevator.” It teaches you to literally think of your mood as an elevator. When you’re on the higher floors, you’re happy, more productive, and collegial. When you’re on the lower floors, you tend to be cynical, doubtful, and depressed, which drags people down. It was another constructive way to show us how our moods affect those around us. MC : What is your best leadership advice? DR : I’ve learned that leadership is much more important than managing. You need to act like a leader and lead by example. You need to let people know that you’re there if they get stuck; that you trust them to do their job; that you want to know what’s going on, but you’re not going to micromanage them; and that, above all, they’re people whose lives and goals you truly care about— both on and off the job.

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Unsung Heroes Motorola Solutions’ Michelle Warner offers high praise for those who seldom get it—the paralegals and administrative assistants of an in-house legal department BY RISA MCARDLE // PHOTO BY CALEB FOX

In many ways, the paralegals of Motorola Solutions are Michelle Warner’s heroes. One paralegal was responsible for helping Motorola Solutions implement global divestitures—including a corporate spinoff and several other large sales—and manage legal matters in more than 50 countries. Another is the point person managing the company’s brand, the bat-wing “M.” “The paralegals who work for me, they’re career paralegals,” says Warner, corporate vice president, deputy general counsel, and secretary at Motorola Solutions. “Quite frankly, I’d stack them up against junior lawyers or even some mid-level lawyers anywhere. They go above and beyond in their contributions to this team.” 78



Warner arrived at Motorola in 1997 in the company’s mergers and acquisitions function after six years at large and medium-sized Chicago law firms. She was joining a $28 billion company that would, at one point, have as many as five attorneys dedicated to M&A. In the 2000s, Motorola spun off some business units and purchased others, reorganizing and, eventually, reestablishing itself with a new identity after it split into two separate companies in 2011. Motorola Solutions focuses on mission-critical communications for police, other first responders, and business customers. Today, Warner manages the M&A, securities, and trademarks legal practices with a team of eight. This team includes






Business Business Solutions. Solutions. Accomplished. Accomplished. North America North America Europe Europe Asia Asia




two lawyers, four paralegals, and two administrative assistants, with a lawyer and a paralegal each supporting M&A, and another lawyer and paralegal supporting securities. There are two paralegals who support trademarks, one of whom is the company’s brand manager. “There are a lot of people under the legal umbrella who are not lawyers,” Warner says. “Some of them, like the paralegals, largely support lawyers, but we also have many nonlawyers, including in ethics and compliance, trade compliance, environmental health and safety, and in our operations group.” Warner says while lawyers have more education and experience in many cases, she sees minimal difference between lawyers and paralegals when it comes to day-to-day essentials in the legal department. “My paralegals are extremely talented and collaborative,” Warner says, whether it be drafting a contract or negotiating an agreement. Motorola Solutions fosters an environment in which people can rise up and lead, Warner adds. Warner supported an administrative assistant, for example, as she earned her paralegal certificate while working full-time. The legal staff thrives on a net of support strengthened by both top-flight paralegals and administrative assistants. When Motorola was a larger company, a lawyer-led paralegal council fostered collaboration between attorneys and paralegals, as well as among paralegals. A few years ago, as a much smaller company, Motorola Solutions conducted a legal employee satisfaction survey that produced results showing a need to revisit that concept. What exists now are in-house,

“The paralegals who work for me, they’re career paralegals. Quite frankly, I’d stack them up against junior lawyers or even some mid-level lawyers anywhere.” – MICHELLE WARNER

talent-management teams designed to offer career guidance to lawyers, paralegals, and administrative assistants. “It’s empowering everyone, regardless of where they fall within the organization, to feel like they have a voice, that they contribute as much as anybody,” Warner says. “We’re all part of one team. To me, that’s what’s really important, and that’s what keeps us all happy.” Furthermore, she credits “a true sense of ownership” of their roles—via plenty of autonomy, responsibility, and authority—for the inherent value and success of her support staff in particular. “For me, a company that wants to get the most out of these professionals has to give them that latitude,” she says. “It keeps them around and keeps them engaged.”


The Great Migration The transition from prosecutor to in-house counsel is not without difficulty and requires not just a shift in competence, but in mind-set. Steve Adams made that move and had to learn the soft skills that make great corporate counsel: collaboration, communication, and cooperation BY KELLI LAWRENCE When Steve Adams walked away from the life of a criminal prosecutor, dumpster diving was not the change he had in mind. Yet he’s done just that—a few times—and even claims success for his efforts. Granted, he dives to gather evidence from dumpsters in Silicon Valley, not leftovers from typical trash cans. But Adams, vice president of global litigation and asset protection at Santa Clara, California-based photo: Applied Materials

Applied Materials, sees plenty of parallels to his days in the district attorney’s office. “Trade secret cases are kind of crossover criminal-civil cases with theft at the heart,” Adams says. “And a lot of trade secret cases at Applied have made for a natural transition for a criminal prosecutor.” His background in criminal prosecution is more helpful in his current role than he ever imagined. JAN/FEB/MAR 2016



Good Counsel

Steve Adams on what makes a great in-house attorney NURTURE RELATIONSHIPS. Being able to informally reach out to the right person for assistance is critical to success everywhere, but particularly in an inhouse setting. LEARN YOUR BUSINESS. The better we understand the business and its needs as in-house lawyers, the more effectively we can use our unique positions and skills to drive solutions and integrate analysis. BE FLEXIBLE. An in-house job frequently provides interesting and unanticipated career paths, but you may have to be willing to step off the main track to find them.




Applied Materials is a giant in the tech industry; it delivers the technology that helps make innovations like smartphones, flat-screen TVs, and solar panels more affordable and accessible around the world. Though the work is similar to what he’s seen before, the method in which he handles it is new to Adams. He collaborates with paralegals, administrative assistants, full-time support staff, independent contractors, as well as fellow attorneys. “It’s such a big mind-set shift to realize you are part of a broader enterprise and that your job is to drive the enterprise goals, rather than have everything revolve around what you’re doing,” he admits. His days as a prosecutor may have made this shift in mind-set necessary, but Adams points out that few lawyers are used to working in teams. The entire process of getting into law school—not to mention thriving once admitted—is highly singular and competitive. The opportunities to work with others are slim-to-nonexistent, in his experience, and that is often true beyond graduation, too. “In big firms with big litigation matters, for instance, there will be teams that work together,” he says. “But I don’t think anyone’s focusing particularly on the team-building aspects of it. I think that would be unusual.” The result of so many adjustments is a dayto-day existence at Applied Materials that is unlike any Adams has previously experienced. He’s had to learn to stop being the “outside lawyer,” he says, and start managing outside lawyers, instead—a role reversal that, initially, took him far outside his comfort zone. “You want to edit the briefs, but that’s not why you’re here,” he explains. “Your job now is to set the objectives and try to translate [the business’s] legal needs into a project the outside team is doing for you. I know I still have the tendency to want to hunker down and do it myself, rather than figure out what I need to do to enable the people working with me to do their jobs better.” But there are key skills Adams honed as a prosecutor that he leans on to curb that doit-all tendency. One is accountability; he says he learned to be responsible for the whole project—meaning a criminal investigation and trial—and not just for a smaller piece of it. Another is flexibility, which continues to be of utmost importance to Adams as he faces surprises every day.

“There’s a real premium on thinking through and simplifying the messaging, focusing on your core message, and getting that across clearly.” – STEVE ADAMS

There’s also communication—which may seem obvious, but it’s more crucial at Applied because his team is in 11 different offices worldwide. “Simply learning to speak slower and realizing English is a second language for many team members, is important,” he adds. Adams works hard to improve his own communication skills, a must for any attorney but even more crucial for a manager. “There’s a real premium on thinking through and simplifying the messaging, focusing on your core message, and getting that across clearly,” he says. “They don’t need to know the footnotes. They need to know the headlines.” The headlines for Adams and Applied Materials include a lot of across-the-board intellectual property protection. The complex nuances of such undertakings help remind Adams that he’s in the right place and taking on the right challenges. “It’s fascinating for me to be able to work where the issues are incredibly important,” he says, “but figuring out how you communicate on a broad scale, and trying to really effect change in such a way that 20,000 people across the globe are interacting on these important issues is a real eye-opener.”



“Steve is a thoughtful, innovative leader who applies his accomplished litigation skills and strategies to all he handles. We are fortunate to have the opportunity to work with such a dedicated professional and business partner.” – Denise Mingrone and Bill Molinski, Partners


Congratulations to Steve Adams of Applied Materials for his contributions to the legal community and recognition by Modern Counsel.





Taking Authenticity Beyond the Buzzword Christine DeBiase of MetLife on how honesty can and should guide your management style AS TOLD TO TOPHER BORDEAU

It might not be a popular thing to say, but, to me, “authentic leadership” is bit of a corporate buzzword. Authenticity itself is the thing we’re after—or, at least, I know that I want to be authentic. And I want my associates to be authentic. Authenticity involves an awareness of self—an awareness of your strengths, your limitations, and your emotions. It’s an internal strength of character derived from self-awareness and self-acceptance. Those two things shape a kind of honesty with yourself that guides your relationship with the world around you. Authenticity is innate and intimate. Only you know who you are. Letting your self-awareness out into the world is something only you can choose to do, and doing so makes you authentic. If you live an authentic life, you’re automatically cultivating it in others. There’s no other way. You cultivate it in the workplace by living it and letting others see that you’re living it. Perhaps that’s authentic leadership—not a style of leadership, per se, but acting authentically as a leader to encourage others to do the same as members of a team. When people see you being authentic, they feel safe. They can be open. I try to promote openness in every situation in the workplace. I want everyone to speak his/her mind. We don’t have to agree. In fact, it’s better if we don’t. I want to facilitate healthy discussion in which it’s okay to have conflict—where there’s no negative consequence, no punishment for conflicting ideas. That’s what creates diversity of thought. There’s an ability to disagree without disrespecting that’s absolutely essential. It fosters really rich dialogue. 84



We’re going through some changes in the US retail legal unit of MetLife. One of my direct reports isn’t close to retirement but could retire somewhere in the near future, and that person recently said to me, “As long as I’m working for you, I want to work as long as I can. With you, what I see is what I get. I trust in your word, and I can never ask for more than that.” Obviously, we have a very enjoyable working relationship, but that really struck a chord with me. Authenticity means my team knows what matters to me—and that they matter to me—and that shapes the way we work together. MetLife recently moved its US retail operation to Charlotte, North Carolina. The key leaders of each partner group, including legal, also moved. You can imagine the apprehension about relocating. It was scary. We weren’t moving everyone, but we were committed to having a meaningful presence in Charlotte. How we were going to achieve that presence required an honest discussion. It was a tense conversation at first, because you’re talking about the possibility of relocating people and jobs. It was very difficult, but it stayed very respectful. It was, without a doubt, one of the most difficult conversations I’ve had as a leader. But right in the beginning, we said, “We have to make these decisions, but let’s talk about the best way to do that in the most respectful way to all of our positions.” Doing that meant that we needed to hear from everyone, and that meant that everyone felt safe to share what was on their minds. I emphasized how tough it was to talk about. That’s because it was. The

outcome of all of it, though, is a healthy, thriving US retail legal division. Within a year and a half we had ten lawyers and four support staff in the Charlotte office. We’re thriving in New York and Boston, too. We have what we set out to have, ultimately, which is three legal hubs of excellence. My time on soccer and softball fields taught me so many important lessons and skills that inform my approach to business. When you’re a committed member of a team, your motivations are genuine and authentic. You and your teammates share a common desire that fosters respect and acceptance. All of the benefits that come from a team atmosphere—relationships, teamwork, self-confidence—are all essential to success in anything in life. The benefits of playing team sports aren’t about wins and losses—they’re about the approach to the pursuit of wins. When the approach is authentic, it has value in and of itself, regardless of the outcome. I’ve done a lot of different things within the law department during my career at MetLife. I’ve had these mini career shifts to different areas of practice. I don’t think


“I could have hidden from the vulnerability, and I would have set myself up for failure.” – CHRISTINE DEBIASE

We congratulate

Christine DeBiase

on her successes with MetLife.

you see that very often in-house. You either specialize in one area or another. But I’ve been in the litigation area and the regulatory unit. I was the corporate secretary of the company, and now I lead the legal unit for the largest individual US business division. When I moved from litigation to regulatory and then into the corporate secretary’s role, I was taking a big leap. A risk. I didn’t have a corporate law background, per se. Executive leadership in the company thought that I had the skill set and attributes to be an effective, successful corporate secretary. But I didn’t have the corporate law background, which scared me. The only way for me to be effective was to reveal some vulnerability and rely on corporate law experts and leverage their expertise. I had the utmost confidence that I could learn on the job while relying on my existing experience to guide me, but I had to offer my unique skill set to those associates, and together we could build a winning combination. I could have hidden from the vulnerability, and I would have set myself up for failure. That wouldn’t have been authentic—I wouldn’t photo: Rick Lash Photography

have been honest with myself or the people around me. Without that vulnerability, my authenticity would have gone right out the window. If you don’t take risks, you’ll always be asking “What if?” I don’t want anyone who works for me to be in that situation. I want them to explore, be curious, and ask questions. And if the opportunity arises to take a risk that they love, I tell them to go for it. That’s authentic—and it’s also vulnerable. I don’t want to lose my star players as they chase their own opportunities, but encouraging that freedom is how we attract and cultivate talent at MetLife.


> REED SMITH LLP: “As outside counsel,

we very much enjoy working with clients like Christine who exhibit that rare combination of keen legal insight and judgment, a command of the business of insurance, and exemplary management skills. We are proud to be part of this effective partnership.” – Thomas Conner, Partner

McGuireWoods LLP shares Christine’s commitment to diversity and public service. Diversity and community are two of the firm’s core values as they provide sources of creativity, wellrounded perspective and the innovative legal solutions we bring to the table when we partner with clients.

Cheryl L. Haas, Partner 404.443.5726 Promenade 1230 Peachtree Street N.E. Suite 2100 Atlanta, GA 30309

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Consensus Building Among Fierce Competitors

How the American Beverage Association is uniting industry giants to fight obesity with guidance from GC Amy Hancock BY KRISTEN BAHLER // PHOTO BY CALEB FOX

Doctors aren’t the only professionals encouraging healthier eating—and drinking—habits. In 2015, the American Beverage Association (ABA), and three of its leading member companies—the Coca-Cola Company, PepsiCo, and Dr. Pepper Snapple Group—joined the Alliance for a Healthier Generation to reduce the beverage calories consumed by the average American. Deemed the “Balanced Calories Initiative,” the program builds upon the ABA’s efforts to provide consumers with information, such as voluntary front-of-bottle calorie labels. The initiative marks the largest voluntary effort to fight obesity by an industry. The ABA, which provides a neutral forum for beverage manufacturers and distributors to discuss common issues while 86



maintaining a “tradition of spirited competition,” has pledged to help its members reduce by 20 percent the amount of beverage calories consumed by Americans by 2025. General counsel Amy Hancock discusses how the ABA is uniting fierce competitors to fight obesity. Modern Counsel : What was the impetus for the launch of the Balanced Calories Initiative (BCI)? Amy Hancock : We view the Balanced Calories Initiative as a continuation of the industry’s history of coming together to take strong leadership positions. Back in 2006, we launched the “School Beverage Guidelines,” a voluntary


industry initiative to remove full-calorie sodas from K–12 schools and replace them with lower-calorie, smaller-portion options. We listened to parents, who told us they wanted more control over what their children and teens ate and drank in the school environment. We partnered with the Alliance for a Healthier Generation, the Clinton Foundation, and the American Heart Association to agree that only water, milk, and portion-controlled juice would be available in elementary and middle schools with additional calorie-capped beverages at the high school level. It was the first of our leadership initiatives acknowledging that the beverages we sell have calories and that the industry is willing to work together to support its consumers in their choices and be part of real health solutions. With the launch of the “Clear on Calories” effort in 2010, the nonalcoholic-beverage industry became the first in the country to put clear calorie information right on the front of the products it sells. The BCI was the logical next step in the tradition of our industry and its trade association to support consumers with both choice and information. MC : The initiative adds a layer of accountability to beverage production, which usually means added cost. What is the benefit of the initiative for the American Beverage Association and its members? AH : The BCI provides a message, or a nudge, that consumers will start to associate with our products. It reminds them to balance their calories—including from beverages. It’s information that consumers understand and want and that our member companies want to provide. MC : Were there any risks that had to be mitigated before agreeing to the initiative? AH : There are always things we have to consider when discussing competitive issues, but I wouldn’t consider them risks—more like “watch outs” that we need to be aware of. MC : What concerns, specifically, did the ABA view as “watch outs?” AH : I concentrate on competitive issues with all of our initiatives. Our large member companies are well-known household names and are fierce competitors in the marketplace. In the association, we build consensus among them to create industry positions and, when appropriate, advocate for the industry. So when they voluntarily agree to take action together, we have to consider any potential competitive implications of those actions.

MC : Are there other legal issues—either for the association or its member companies—that you had to consider? AH : The competitive issue is always the issue that gets most of our focus, but there are other legal considerations that most trade organizations have to face. For instance, the BCI spurred legal considerations with regard to contracts, documents, and other technical issues.

Off the Cuff with Amy Hancock Modern Counsel: What three words best describe you?

MC : Did the association face any pushback from member companies?

Amy Hancock: Active, energetic, and engaged.

AH : No, it didn’t. One of the biggest challenges of working for a trade association, and one of our main jobs, is to bring well-known, fierce competitors together and unite them in common goals and policy work. That can be tricky, but we are very fortunate at ABA to have forward-leaning member companies who are willing to be part of— and drive—meaningful solutions. This was one of those issues in which the member companies recognized the value of the initiative and committed to the effort.

MC: What do you believe is possible that others don’t?

MC : You mentioned the Alliance for a Healthier Generation. What kind of collaboration did this initiative require? AH : The Alliance for a Healthier Generation is a joint venture between the Clinton Foundation and the American Heart Association. The organization has a model of working with different industries to achieve a variety of goals and policies and is particularly focused on ending childhood obesity. The School Beverage Guidelines came from a partnership with the alliance, as did the Balanced Calories Initiative. And the outcomes of the two programs have been consistent with both of our missions. MC : Let’s talk about the Food and Drug Association’s (FDA) nutritional labeling regulation that was proposed late last year, which requires calorie information to be listed on menus in chain restaurants. What role is the American Beverage Association playing in amending or tweaking these and other recent FDA regulations?

AH: The Cubs winning the World Series. MC: What’s your favorite legal term and why? AH: It’s a tie between “jiggery-pokery” and “applesauce” because who doesn’t love those fun new additions to legal language? MC: What is your personal motto or words to live by? AH: Do what you like; like what you do. (I know this is the slogan of a clothing company, but I just think it sums things up nicely.) MC: What’s the best piece of advice you ever received? AH: Life is short, you might as well be happy.

AH : We are very supportive of some of the proposed changes. One change in particular—to make calories more prominent—is totally consistent with our position. Other proposed changes, like changing the serving size for beverage labels from 8 ounces to 12 ounces and providing clear calorie information on self-serve fountain equipment, is also true JAN/FEB/MAR 2016





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MC : What about the FDA’s recently finalized policy that requires many vending machine manufacturers to provide visible nutritional information before the point of purchase. Are you working on amending those regulations? AH : Again, our industry is very committed to providing clear calorie information, so we’re supportive of the vending labeling rule. There are technical difficulties in the way the FDA wrote the rule pertaining to how calories will be visible in glass-front vending machines and the cost associated with that, but we’re working with the agency for guidance. Overall, our position on most of the FDA’s vending labeling regulation is a supportive one.

Congratulations to Amy for all your success! We are proud to join Modern Counsel in honoring your career achievements and leadership.


to our mission. Many of our members have already been labeling serving sizes up to 12 ounces, and some have been labeling up to 20 ounces. As for labeling on self-serve fountains, we had already intended to do that as part of our Clear on Calories initiative and now with the BCI. So we’re obviously very supportive of these types of regulations. Some of the proposed changes don’t have our support. One thing we were opposed to, for instance, is a rule that would require an additional line on the nutrition facts panel for the number of grams of added sugars because we think total sugars—and total calories— are the relevant nutritional claims. We are opposed to that change, so we filed comments and are waiting to hear the outcome.

Steven R. Phillips, 500 8th Street, NW, Washington, DC 20004 | DLA Piper LLP (US) is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. Further details of these entities can be found at Attorney Advertising


> POLSINELLI PC: “Amy is an insightful

lawyer, extremely capable of helping the beverage industry navigate numerous policy challenges while maintaining sound strategic vision. It is a privilege to partner with her.” – Stuart Pape, Shareholder






Preventive Care How Gjon Nivica used marketing strategies to teach Celanese employees the ins and outs of preventative law BY JESSICA MONTOYA COGGINS

Celanese is not a static company. The chemical corporation creates chemistry solutions and develops chemicals, technologies, and designs that are applied to a multitude of industries. An innovative company requires an innovative legal team. When Gjon Nivica, Jr., joined Celanese in 2009, he introduced the idea of “innovation by analogy.” The strategy was an attempt to take the best thinking on service delivery from extremely competitive and contemporary spaces outside of the law and bring that thinking into the legal department to better serve internal clients. 90



As senior vice president and general counsel of Celanese, Nivica says the legal team has to be proactive rather than reactive. That attitude will not work, though, if employees are not aware of preventative measures. Nivica’s team sought out methods to educate Celanese staff. “It was important to deliver the tools of preventive law with a digital interface that was user-friendly, mobile, and engaging,” he says. Attempts to create this interface included a website styled like WebMD, a code of conduct that resembled marketing materials, and preventive legal training that aimed to deliver content as

an advertisement would—heavy on visuals and light on words. To improve on these early attempts, Nivica looked to other formats not normally associated with the legal practice: push marketing content and viral videos. From the former, Nivica realized the importance of recognizing customer needs and delivering content in context and in short bursts. That is, not making the audience show up for general training based on a tight schedule set by the legal department. There are a number of reasons why push content works. Attention spans are short, and convenience is increasingly in demand for an on-the-go work force. Nivica wanted legal to keep this in mind, as well, but he went beyond the superficial and dug into which marketing strategies work and why. The most successful marketing companies, Nivica points out, have discovered comprehensive algorithms to determine which products a customer might soon purchase based on recent expenditures and other factors. Nivica deconstructed the characteristics that he believed led to a video going viral and shared these factors with his legal team. That was the framework on which his team created videos regarding preventive law for Celanese. Nivica’s team worked with Celanese’s public relations and sales groups to assist in creating push content and for access to the company calendar of significant business events, such as trade shows and industry conferences. “Each of those events suggest specific, short bursts of preventive law material for that particular context,” says Nivica. The next step was to deliver the content. Recently, Nivica’s legal team—led by associate general counsel Adam Shulman, compliance officer Ashley Duffie, and

Off the Cuff with Gjon Nivica Modern Counsel: What’s your definition of success? Gjon Nivica: Giving completely of yourself to noble relationships and to a body of worthwhile work. MC: Which words define you? GN: Striving, thoughtful. MC: If you could give your younger self one piece of advice, what would it be? GN: To find paths that are both worthy of yourself and your talents, and to truly pursue them with everything you’ve got. MC: What is your motto? GN: “Run with endurance the race that is set before you.” [Hebrews 12:1]

photo: Celanese


Attention spans are short, and convenience is increasingly in demand for an on-thego work force. Nivica wanted legal to keep this in mind.

With industry-leading lawyers in key commercial and financial centers in the United States, Asia, and Europe, O’Melveny & Myers LLP helps clients manage the challenges and opportunities of the global economy. Placing second on The American Lawyer’s prestigious A-List in 2014, the Firm combines a century-long history with a culture of innovation and creative problem-solving to deliver practical results.

projects manager Diane Tanner—piloted its first “home-grown” independent film about antitrust compliance. The two-minute feature “was innovated wholly in-house by creative members of our company,” Nivica says. Legal content was made memorable and significant through its video presentation. “While the short feature is not likely getting into Sundance [Film Festival], the team did a terrific job as screenwriters and directors,” Nivica notes. “I was given executive producer credit on the mock movie billboard that now populates our intranet website, which means I financed it, but they did all the real work.” Nivica was struck by the overwhelmingly positive response he received to the video, even outside of the legal realm. It was successful not only for pushing the message of antitrust laws, but for viral nature—at least, internally. This became evident when Nivica learned employees were sharing the video among themselves, without prompting. “How often does that happen, where a business person enthusiastically forwards legal training to a colleague?” Nivica asks. “I suspect that kind of training is much more likely going to be remembered and taken to heart.” For Nivica and the rest of the Celanese legal team, the antitrust video was both a success and a lesson. “We don’t anticipate delivering all our content this way, but for the most important aspects of preventive law, it is a terrific model that we’d like to develop further.”

We warmly congratulate Celanese’s General Counsel, Gjon N. Nivica, on his well-deserved recognition as an exceptional lawyer and leader. We are proud to be a strategic partner of Celanese.



Newport Beach

Century City

San Francisco


Hong Kong Shanghai


Silicon Valley

Los Angeles




New York

Washington, DC



LYDIA WAHLKE General Counsel Chicago Cubs





DOUBLE PLAY A total transformation is underway at Wrigley Field, and it’s not just on the diamond—the front office has an important role to play in pursuit of a drought-ending championship BY ZACH BALIVA // PHOTOS BY CALEB FOX




Ipso facto, actus, reus, and … eamus catuli? Like all lawyers, Lydia Wahlke is familiar with Latin legalese. Before accepting a position with the Chicago Cubs in 2010, she spent four years as an associate at Chicago’s Kirkland & Ellis, and before that, she worked for Miramax as an editor and field producer.

Despite her experience in intellectual property and litigation, that last phrase was a new one for her: eamus catuli. But right outside of Wahlke’s Wrigleyville office, you’re likely to find a passerby who knows the meaning of the “eamus catuli” sign, which adorns the front of a greystone apartment building on Sheffield Avenue. Loosely translated, the bold white letters on a simple blue background mean “Let’s go Cubs!” When Wahlke joined the historic National League baseball club, the team was at the start of an ambitious rebuilding phase sparked by a change in ownership. In January 2009, Tribune Company agreed to sell a controlling interest in the Cubs to the Ricketts family for an estimated $845 million in a deal finalized in October of the same year. Tom Ricketts, team chairman and family spokesman, said his family has “the goal of Cubs fans everywhere: to win a World Series 94



and build the consistent championship tradition that the fans deserve.” It’s a lofty goal. Anyone who reads the “eamus catuli” sign finds a series of numbers to its immediate right. Those numbers represent the number of years since the team won its division, a league championship, and a World Series. When the Ricketts family took over, the Cubs had just failed to win the National League Central division, which they had done in each of the previous two years. So the numbers changed to 01, 63, and 100. One Hundred Long Years But a change in ownership—the team’s first in nearly three decades—ushered in a fresh era, and with it, new hope. “It was an exciting time and a great opportunity to rebuild one of the most famous brands in sports,” says Wahlke. “It was like working at a start-up with a hundred years of history.”

Today, the Cubs’ legal team is small, but larger than when Wahlke started. In 2010, she and the executive vice president worked as a team of two, handling a variety of matters from vendor contracts, to marketing and promotion deals, to stadium employment matters, to litigation. Wahlke’s strategy to take this all on effectively was to earn trust with long-tenured employees by getting in the trenches with them: proving dedication, answering questions, and listening to concerns. “We had employees who had worked here longer than I had been alive,” she says. “There were decades of institutional knowledge and inertia. We wanted to keep all the wonderful parts but play a role in creating a more modern and competitive sports franchise.” To accomplish that ideal, Wahlke helped align her department to the Ricketts family’s three formalized goals: First, owners intend to reward Cubs fans with a World Series championship. Next, they plan to preserve and protect Wrigley Field. Third, they want to be known as good neighbors to the community. Since the mandate trickles down to all departments, Wahlke and her partners measure all ideas, projects, and initiatives as they build toward accomplishing those benchmarks. “Every dollar spent is justified by how well it meets these three simple goals,” she explains. For the plan to work, each person in every department had to be willing to step outside of normal job descriptions. “We called ourselves the smallest front office in baseball, and it was a badge of honor,” Wahlke recalls. Things were happening at a dizzying pace—but the plan kept everything in check. In addition to the new, rapid pace, legal faced a mountain of challenges, including an aging stadium that made headlines for its falling concrete and a staff weary from bankruptcy. Wahlke estimates she spent the better part of a year convincing people to come to the legal department, and she credits a supportive business operations president with easing the transition. He is a former lawyer and included attorneys in business decisions from the beginning.


“Baseball and business are on a parallel path in coordination.” – LYDIA WAHLKE

With a seat at the table, legal participated in a complete—and brutally honest—analysis of the organization. The exercise helped Wahlke realize that Wrigley Field was the organization’s strength, opportunity, and weakness. Its age, structure, limitations, and litigation cause headaches for team attorneys—but the “Friendly Confines” attract sold-out crowds throughout the summer and represents potential beyond games. The renaissance project got a jump

start in fall 2011, when the Cubs hired Theo Epstein from the Boston Red Sox. Epstein, a general manager in Beantown at age 28, led his team to a World Series just two years later. Chicago was in a frenzy. Epstein became the team’s president of baseball operations, and Jed Hoyer stepped in as general manager. The duo brought with them their belief in sabermetrics, a system that relies on objective statistics, as well as knowledge of traditional baseball. They

Hidden Talents Wahlke says the time she spent working in Hollywood helps her interact with the Cubs’ marketing department. She reviews content with the eye of both an attorney and a video editor. After realizing the franchise had no official digital photo archive, Wahlke spearheaded the creation of an online image database that became the foundation for the team’s 100th anniversary retrospective in 2014. Today, those images are used on the team’s videoboard system, unveiled at the start of the 2015 season.




Turning a Corner A look back at the last six years and how the Cubs franchise is changing systems built up in the 100 before






The Cubs finish 75-87, 16 games out of first place. Tom Ricketts hires Theo Epstein as president of baseball operations. Jed Hoyer becomes general manager, and Dale Sveum takes over as manager.









The team loses 101 games, but a new regime works to rebuild a depleted minor league system and improve overseas talent scouting. They focus on the development of young stars like Anthony Rizzo and Starlin Castro. Epstein and Hoyer trade Ryan Dempster and others for young talent. The Cubs finish in last place but stick to the front office’s plan. Epstein and Hoyer land Jake Arrieta and Pedro Strop from the Baltimore Orioles. The team is able to use its new spring training facility for new manager Rick Renteria. A blockbuster trade ships Jeff Samardzija and Jason Hammel to Oakland in exchange for three players, including Addison Russell, one of the game’s top prospects. In late October, the Cubs hire veteran and respected manager Joe Maddo. The next month, the sudden contenders sign ace pitcher Jon Lester to a $155 million contract. In a busy offseason, the Cubs break ground on a $500 million, multiyear renovation project to increase capacity at Wrigley Field, install videoboards and other modern amenities, improve infrastructure, and overhaul team facilities. Jason Hammel re-signs with the team after his stint with Oakland, and the Cubs add Miguel Montero and others. Top prospect Kris Bryant earns a call-up and, along with first baseman Anthony Rizzo, who is selected for the all-star team in a year worthy of the Rookie of the Year award. At the All-Star Break, the team is 47-40, well above .500 for the first time in many years, and in contention for a Wild Card spot.



handed out copies of a baseball philosophy called “the Cubs way” that instructed players on every detail of the game. It’s rumored to include information as specific as which part of the foot to use while stepping on specific corners of each base. In speaking to reporters, Epstein described the manual’s contents: “Playing hard is a big part of it; playing the game the right way and teaching it consistently is important.” He added, “The Cubs way really boils down to the people—the players, obviously, but everyone: all the scouts and all the people in uniform in the minor leagues and the big leagues. For us to teach the game the right way, it’s more than words on the page. It comes down to how deep we dig to get connected to players to teach the game the right way, how much we care, how committed we are, how hard we work. There’s a lot that goes into this and building an organization.” The Cubs way has deeply influenced all team departments, including legal. “We’ve restructured how we communicate with our fans, how we market, and certain other processes,” Wahlke says. “We never would have done those things without the Ricketts’s leadership and without Epstein and Hoyer’s baseball philosophies. Baseball and business are on a parallel path in coordination.” For example, the front office started soliciting more input from season ticket holders and fans, hiring fan advocates in the stadium—Tom Ricketts is known to walk the concourse and actively engage fans—and hosting season ticket holder meetings at a large Chicago theater. Wahlke compares the event to an annual stakeholder meeting, saying Epstein and Hoyer participate in a question-and-answer session and share baseball insight and expectations. Since implementing the event in 2012, the Cubs have seen a noticeable spike in season ticket renewal rates. Wahlke and her colleagues spend time on workers’ compensation issues, compliance issues, contracts, litigation, and problems that attorneys would face in any medium-sized business. The department helps the team stay competitive by addressing the legal, compliance, contract,

“It was like working at a start-up with a hundred years of history.” – LYDIA WAHLKE

and insurance aspects of training facilities (the team opened Cubs Park, a new Spring Training complex in 2014), scouting facilities (they launched a baseball academy in the Dominican Republic in 2013), and the restoration of Wrigley Field (the Cubs started a multiyear project in late 2014). Five years in, the strategic plan is on track. Last season, the team opened the restored left- and right-field Budweiser bleachers, completed structural work in the left-field concourse, and began foundational work for the new hometeam clubhouse and office building. The Ricketts family will build a new office building and pedestrian plaza over the next four years. To make it work, legal and other departments are working together and breaking traditional silos, sharing tools, and adopting one another’s processes to make communication and other business activities better and faster. On the field, things are progressing, as well. In less than five years, the organization’s minor league and scouting systems have gone from some of the worst to some of the most well-respected. The team has three of Baseball America’s top 50 prospects, in addition to three (Kris Bryant, Jorge Soler, and Addison Russell) who were recently promoted to the big leagues. Their two “veteran” infielders, all-stars Anthony Rizzo and Starlin Castro, are each just 25 years old, and a pitching staff anchored by Jon Lester, Jake Arrieta, and Jason Hammel is turning heads. The Cubs are poised to shed their lovable loser moniker and reinvent themselves as perennial contenders. There is a growing hope on Chicago’s North Side that “next year” is finally here.


Inclusive Outside Counsel How Barry Parsons promotes legal diversity and reduces spending on outside counsel, all while producing winning results at Freddie Mac BY AMANDA GARCIA // PHOTO BY CALEB FOX

Modern Counsel : You were involved in diversity work long before you came to Freddie Mac. Why? Barry Parsons : First and foremost, I believe that increasing diversity is the right thing to do. Second, I’m convinced that diversity of experience leads to better decision making and better results. Third, our company and our regulator both encourage it, including particular outreach to diverse suppliers. MC : How has Freddie Mac increased diversity efforts since you joined the legal team? BP : We have taken several steps: We’ve created a database that includes contact information, specialty areas of practice, and locations of diverse outside counsel who are qualified to do our work. We recently hosted a diversity program for our entire legal division and invited several outside speakers to make presentations—including John Murdock, a NAMWOLF lawyer who spoke about his firm, Benton, Murdock and Potter, and his experience working with NAMWOLF. MC : What is NAMWOLF? BP : NAMWOLF is the National Association of Minority- and Women-Owned Law Firms. Shortly after I came to Freddie Mac, I was able to attend NAMWOLF’s national meeting and was impressed, especially with their value proposition and their 98



vetting process. Since then, I’ve developed what I consider to be a very valuable relationship with the organization. MC : What makes NAMWOLF valuable to your work at Freddie Mac? BP : From a financial perspective, NAMWOLF firms are typically small and have lower cost structures, overhead, and hourly rates. They are often interested in alternative fee arrangements—and I’m always open to creative solutions that help control our legal costs. Often these attorneys come from big law firms and have the pedigree that goes with that experience, so we often get partner-level, big-firm expertise at a lower cost than a third-year associate. We get the benefit of that experience while saving tens or even hundreds of thousands of dollars. MC : What about the vetting process? How would an interested law firm become a NAMWOLF member? BP : It would have to be certified as being minority-owned (which is a status approved by other organizations). It would need a top-tier MartindaleHubbell review rating. It must be headquartered in the United States or Puerto Rico, have at least three attorneys, and provide corporate references for the work it’s done. Those references are a very important, helpful resource for choosing NAMWOLF firms.

Point of Pride We ask Barry Parsons, “Why is diversity a personal priority for you?” “Diversity is part of who I am. I’m sure that part of it is the fact that I’m gay and have been subject to discrimination. I have three kids who are Asian, and I’m Caucasian, so I’ve also dealt with interracial issues. I’ve had many friends and roommates of different races and I’ve seen them discriminated against, and I’ve always been moved by those stories. I was quickly placed on a diversity committee when I worked at Crowell and Moring LLP, and my interest in those issues only grew over the 14 years I was there. They continue to grow today.”





MC : Beyond cost, what has your experience been like working with NAMWOLF firms? BP : There was a time when a NAMWOLF firm we hired was particularly well-connected, and the person we hired through the firm was well known in the community. His name was Nathaniel Cade, and I had actually met him through the Leadership Counsel on Legal Diversity fellowship program where we were fellows together. Cade knew the judge through regular interactions in the courtroom and was able to give us a lot of extra insight that helped form our litigation strategy. Since then, he has started his own firm called Cade Law, LLC. MC : What are some useful hiring techniques for recruiting outside counsel through NAMWOLF? BP : Most importantly, I consider firms’ qualifications. As a litigator, I need to make sure a firm is located in the area where the litigation is taking place and that it has experience doing the work. I usually give the firm a copy of the complaint we’re dealing with and get its impression. I ask what the attorneys know about the judge and opposing counsel and other things that would demonstrate their approach to resolving the litigation. MC : Are you currently involved in any particular organizational efforts within NAMWOLF? BP : Currently, NAMWOLF membership is limited to women-owned and minority race-owned law firms. I’m on the national board of directors for the National LGBT [lesbian, gay, bisexual, and transgender] Bar Association, and I have long felt that NAMWOLF should also include law firms that are LGBT-owned. I’ve been serving on a committee to look into that issue and hopefully open up the NAMWOLF membership to LGBT-owned firms in the near future. 100



MC : How did you get involved with the National LGBT Bar Association? BP : I graduated law school in 1995, and at the time, there was a big discussion about whether it was better to be “out” on a résumé or not. There were a lot of law firms that wouldn’t hire gay or lesbian attorneys. But by the time I went to my first National LGBT Bar Association conference 10 years ago, the tide had started to change, and I felt empowered. A couple years before coming to Freddie Mac, I joined the association’s board, and after coming to Freddie Mac, I started an in-house committee for the association that, among other things, works to provide opportunities for individuals and firms to network with diverse counsel they might consider hiring. MC : So is it better to be “out” on a résumé now? BP : Yes, I think so. Even then I made the decision to do it because, for me, it was a screening device. Many organizations want diverse work forces, and being out might even open up some doors to getting an interview. MC : What are some diversity goals for Freddie Mac’s future? BP : We have an ongoing effort to give our attorneys resources they need to easily find diverse firms. We work with a pipeline organization called Just The Beginning that encourages young minority students to consider a career in law. We also partner with the University of the District of Columbia’s law school by paying for summer internships for two students, both of whom worked on public interest legal work for housing issues last summer. And we work with several affinity bar organizations of different demographic groups in a variety of ways. All of this is part of a broad-based diversity effort that has an overall goal of supporting diversity in the legal industry.


ELLEN GINSBERG General Counsel and Secretary Nuclear Energy Institute

A Seat at the Table At Nuclear Energy Institute, attorneys have elevated their status with a legal advisory committee to influence governance and policy BY PETER FABRIS

photo: Elizabeth Tan

When Ellen Ginsberg joined the Nuclear Energy Institute (NEI) in 1991, her plan was to spend a year or two getting experience working from a client perspective, and then return to the partnership track with her firm. The stint turned out to be so interesting and stimulating, though, that she never left. “I very much liked working with the previous general counsel, and I really enjoyed working on regulatory issues,” she recalls. “More importantly, working for the trade association provided me with the opportunity to gain experience with a much broader scope of issues than those I was assigned to at the firm.” In addition to regulatory matters, working for NEI meant tackling issues involving antitrust, contract negotiation, employment law, intellectual property, lobbying, and litigation. “I never really knew

what I would face when I walked into the office on any particular day,” she says. That continues to be true today. In 2005, Ginsberg assumed NEI’s general counsel mantle. During her tenure, she has worked to broaden the scope of the organization’s legal department, enabling it to even more directly contribute to the organizational goal of influencing and implementing industry strategy. Bolstering the legal team became necessary as the workload grew and the cost of engaging outside counsel escalated. Under her leadership, the legal team grew from two lawyers to its present staff of five. Ginsberg is obviously proud of her team’s many contributions, but cites as a particularly notable achievement having prevailed in a lawsuit NEI brought to relieve the industry of having to pay $750 million JAN/FEB/MAR 2016



annually for a federal program that had been terminated. That program, which was enacted to implement the government’s responsibility to safely dispose of used nuclear fuel at Yucca Mountain, has been delayed for years and, in her words, “the industry had had enough.” Although she initially believed the lawsuit was a long shot, she hoped the simplicity of the legal theory—if no program exists, no costs can be estimated, so no fee should be collected from the industry—might be favorably viewed by the court. With strong support from her CEO and a few members, Ginsberg advocated to NEI’s executive committee to let the organization take the risk because a win would be very advantageous for the industry, and there would be no downside if the court rejected NEI’s position. Ginsberg says the day the decision issued was among the most satisfying of her career. Building the legal team is also one of her proudest accomplishments. Trade associations present a number of advantages when it comes to developing talent, she notes. The wide variety of topics allows lawyers to stretch their skills and indulge their interests. That is a plus for recruiting and retaining staff. “I’m careful about whom I select and am careful to make sure that they enjoy the job,” she says. Hiring people with strong soft skills and with potential to develop those skills further is a key point. “What we’ve built here is a highly congenial, highly competent equivalent of a boutique law firm,” she says. The members of NEI’s legal team rely on each other as sounding boards, she says, which contributes to skills development and an amiable, stimulating working atmosphere. A horizontal, less hierarchical management approach has also been an important part of the department’s success, Ginsberg says. Everyone has a fair amount of responsibility and independence even early in their tenures with the organization, she adds. Ongoing learning is emphasized. There is a continuing focus on developing expertise in more 102



Training Day Ginsberg recently hosted an offsite retreat for attorneys of NEI member companies. She shares why the group met in Oak Ridge, Tennessee last fall. “Oak Ridge gave us an opportunity for younger members—and even those of us who are more familiar with the development of the Manhattan Project—to tour the American Museum of Science and Energy and get a feel of what Oak Ridge was like [during World War II]. I recently read The Girls of Atomic City, which really opened my eyes to how much this segment of the population contributed to the effort to end the war. Complementing the meeting and training with the opportunity to learn about the history of nuclear technology provided an interesting opportunity to broaden the committee’s perspective.”

areas through avenues such as webinars and conferences. Keeping up with regulatory matters via trade publications and discussions with outside counsel is also a vital part of the job. In January 2015, Ginsberg took a notable step to boost how the legal team contributes to industry strategic matters by launching a new legal advisory committee within NEI. Advisory committees had already been formed for governmental affairs, communications affairs, nuclear strategic issues, and for suppliers. Ginsberg felt strongly that a similar group should be devised for legal matters to offer valuable expertise to NEI’s governance and external policymakers. All advisory committee chairs attend open meetings of NEI’s executive committee and board of directors and typically make presentations highlighting relevant policy issues. Members of the legal advisory committee (LAC), who include representatives of major utilities, suppliers, engineering firms, and law firms, also have increased opportunities to interact with representatives of the Nuclear Regulatory Commission and other agencies and government bodies. Roundtable meetings provide LAC members with a chance to engage in give-and-take discussions with high-level federal and state government officials, topical experts, and opinion leaders, among others. “We are an extremely compliance-focused industry— the most heavily regulated industry in the country,” Ginsberg explains. Meetings with policymakers as well as legal and regulatory staff help NEI members manage their business. NEI has more than 350 members in 17 countries. They comprise utilities that operate nuclear power plants, plant designers, architect and engineering firms, and major equipment suppliers. The nature of a trade association raises a significant challenge. “When you work for a corporation, you have a single client,” Ginsberg notes. Working for a trade association, on the other hand, means she has many clients. Ginsberg has to take into consideration the interests of all members, some of which may be at odds over



certain issues. “That can be the most challenging part of any of the work we do,” she says. For example, in late 2014 the Department of Energy (DOE) issued a rule that proposed two approaches to allocating certain costs to supplier members. “Both approaches were disliked by everyone—but for different reasons,” she says. “I pressed hard for us to develop a proposal that we could suggest to DOE as a substitute to address the industry’s concerns,” she says. “We did do that ultimately, but getting there took many, many meetings and phone calls. Some of the members may have agreed to it somewhat begrudgingly, but in the long run, it is better for the industry to have a proposal that is rational and addresses the concerns of the agency than to simply poke holes in the agency’s proposal.” That example illustrates how understanding the business and contributing to the organization’s strategic direction are vital for a trade association’s legal team. The way Ginsberg sees it, that’s part of an attorney’s job. “I get a barrage of articles that talk about the necessity of being ‘more than just a lawyer,’ and we are dedicated to practicing that way.” Ginsberg says. At NEI, the legal team continuously proves that point.



> BALCH & BINGHAM, LLP: “Ellen’s ability

to think strategically, while also harmonizing the interests of NEI’s members, is one of her great strengths. She is able to do that with extraordinarily good humor which makes her a terrific colleague and friend.” – Stan Blanton, Partner


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Leadership in a Vertically Integrated Company The world’s largest eyewear company, Luxottica, has many facets—from design and wholesale manufacturing to distribution and retail. With a global wholesale network spanning 130 different countries; factories in Italy, China, Brazil, and the United States; ownership of premium brands such as Ray-Ban and Oakley; retail businesses such as Sunglass Hut and LensCrafters; a portfolio of licensed brands including Prada, Burberry, Giorgio Armani and Michael KORS; and the second-largest vision benefits provider, EyeMed, executive vice president and group general counsel Michael Boxer has a lot of areas to keep in focus. Located in New York, Boxer began at the Milan-based company as North American GC in 1993. In 2011, he took on global responsibility for Luxottica’s legal departments and has since pioneered several ways in which to navigate this multifaceted company. Here, Boxer discusses some of the unique challenges of a vertically integrated company and the strategies he and his team employ to tackle them. AS TOLD TO ANTHONY KAUFMAN

Challenges Responsiveness Luxottica is an incredibly fast-moving company. One day we’re expanding a factory in China, the next day we’re signing a deal with Google or Intel in Silicon Valley to make smart eyewear. Because of the breadth and depth of the company, combined with our cultural diversity, we are constantly reevaluating projects and priorities to ensure we’re meeting global, divisional, and regional needs. Given the pace, we’ve found that responsiveness is the number one contributor to the department’s effectiveness. It’s something we strive for and evaluate ourselves on every day. Managing legal complexity The fact that we are vertically integrated with retail and health-care businesses makes our business far more complex. There are health-care regulations, antitrust, privacy issues, and more. Whether we are dealing with a US-managed vision care issue, a litigation matter in Brazil, or managing our contracts in Europe, decisions are being made in a lot of different places and at different levels of the 104



photo: Lisa Berg


“One day we’re expanding a factory in China; the next we’re signing a deal with Google or Intel in Silicon Valley to make smart eyewear.” – MICHAEL BOXER

organization. And we can’t possibly be in the room every time a decision that could have a legal risk is being made. Meeting diverse stakeholder needs Another big challenge is ensuring that legal concerns for all the different stakeholders in the company (and external stakeholders as well) are being addressed. It’s a tougher task in a vertically integrated company like ours. For example, an important project we’re managing for Sunglass Hut may have an impact on our wholesale sunglass business.

Strategies Resource allocation We’ve developed a consistent resource allocation model based on value and risk. Periodically, we take a step back

and evaluate what quadrant work goes in: whether it’s of strategic significance to the company; work that isn’t strategic but still carries risk, such as a significant outsourcing project or material litigation; and lower value work, whether it’s a core function of the business, or non-core work that just has to be done. Our model ensures that high-value work is done by the senior lawyers on the team and the low-value work is done by non-lawyers, automated, or transferred back to the business with the appropriate self-service tools and policies. It enables us to be responsive and it’s also great for attorney development and engagement. This is a model we use in our legal offices all over the world. Legal decision-making Resource allocation helps a great deal with managing complexity. But we can’t



LABELING LUXOTTICA’S LEGAL WORKLOAD Boxer’s team uses this model to categorize work and delegate resources. Tasks that fall into the top two quadrants are always handled by senior attorneys with appropriate experience. The bottom two quadrants are handled by non-lawyers, either in-house or outsourced.


high-risk and high-value; low commercial relevance e.g. outsourcing or material litigation

high-risk and high-value; strategic to the business e.g. M&A

low-risk and low-value; commercially irrelevant e.g. routine litigation or risk management

low-risk and low-value; high commercial relevance e.g. franchise agreements


Business Solutions. Accomplished. North America Europe Asia





possibly deliver high-level service to all groups unless we help them make better legal and risk management decisions. We have set up processes in the form of training, awareness tools, and templates that enable businesspeople to make better decisions from a risk management standpoint. And we stay in front of them, engaging not just at a senior level, but at the midlevel because decisions that carry legal or compliance risk are more frequently made here. Departmental organization While Luxottica’s legal department is centralized, we have a significant presence in key regions around the world, giving our lawyers a better understanding of what’s important to our stakeholders. Organizational knowledge on a more refined level has made it easier for us to address everyone’s needs.

Innovators For more than 140 years, Shearman & Sterling has partnered with innovators leading industry transformation. We are proud to continue that tradition through our collaboration with Michael Boxer and Luxottica.




Knowledge management We use the same technology system around the world that encompasses everything from document management to law firm billing. It’s a repository of everything we learn and know, and when your team is truly global, having access to all that knowledge at their fingertips is particularly valuable. Hiring great people and building relationships Finally, there’s the key to making sure all this works—our people. I’m involved with the recruiting of every lawyer we hire and making sure they’re happy. How do you know people are happy? One of the key measures is employee engagement, and we have some of the highest engagement scores in the company worldwide. And then it’s about building great relationships. We are privileged to work with an incredibly talented and diverse team of business people. We understand what’s important to them. That’s how we become the trusted advisor. It’s not just working hard and getting the contract done on time, but making sure you understand what they care about and integrate that into your legal approach.


73,415 7,000 €7.65 B 27 employees

retail stores

2014 net sales

eyewear brands

11 130

retail brands

countries of operation

45 11 lawyers



Just the Right Touch Linda Vogel on leading the Aerosoles legal team with grace and candor—even in arduous times AS TOLD TO BRIAN BARTH

I believe it’s always good to think about pushing beyond your comfort zones. When I was contacted by a headhunter about leading in-house counsel at Aerosoles, I had been doing predominantly employment and celebrity work, but general counsel requires a very different set of skills; you have to involve yourself in the business completely, which involves many areas of the law. There are a lot of different hats to wear in our legal department, but we do it all with a team of just four people. I came to Aerosoles in 2003 and was tasked with building the legal department from the ground up. I brought in a real estate lawyer, someone to handle IT work, and someone to manage our trademark portfolio. We have to be partners to every aspect of this business. We need to be nimble and responsive. We need to ensure that our counterparts in the business look at us that way and don’t see us as an impediment. I think that happens with a lot of businesspeople. They are reticent to go to their legal departments because they’re afraid they’re going to be told, “no.” So we meet informally very frequently, sharing department lunches and things like that. I’m not very hierarchical, nor am I a micromanager. I want my team to be able to come to me and discuss any roadblocks, and I want them to be comfortable with the business people. It’s key that they see themselves as business/legal people. It’s also important for the people in the company not just to see me as the legal department, but to see the whole team—to see who they are and appreciate their work. When I speak to our business department heads, I try to make them see how much of what happens is because of my team. One of the biggest challenges we’ve had as a legal department was when our company was acquired by a private equity firm in June 2014. A merger requires very precise, very exact strategies, and we spent almost a year managing that process. Everybody was very tense, there was a lot of stress. We had to be careful to communicate regularly, even if it was just to vent.

We had a war room during the merger, which really helped. I remember one day when everyone was feeling really overburdened, and I said, “Okay, what can I do to bring clarity?” I put together a chart by hand—and my drawing skills are about that of a five-year-old—but I tried to illustrate all of the plates that were spinning. I brought this to one of our daily sessions, and it really helped the team see everything that each person was doing. We were all going the extra mile—and then some—in order to make the merger happen. Looking at this very rough drawing, including what I was doing, gave them such an appreciation for the big picture and how everything was interconnected. It made us laugh, but I think that was one of the key moments we had in getting through the merger. Bringing humor, getting the tension out—I think that’s very important. We have this little local diner that we go to, and it’s very helpful to be able to interact that way. It’s good to get out of the office, sometimes, just so you can talk to one another in a different environment. The best part about this department—and I think this is the proof in the pudding—is that we’ve been together for almost 10 years. I think that’s a testament to the comfort level and the trust that we have, and the ability we have to communicate. I want them to tell me what issues they have, what they’re feeling. If they can do that, then we’re going to be effective.

Lackenbach Siegel applauds

Linda Vogel

on her countless accomplishments AD Pending and well earned professional recognition. An Inspiration and Role Model

Lackenbach Siegel is an intellectual property boutique law firm providing specialized legal counsel in connection with trademark, patent, copyright, advertising, trade secret, licensing, internet, domain names and related IP causes. We have effectively and efficiently provided intellectual property legal services for over 90 years.

Editor’s Note: At the time of press, editors were notified that Linda Vogel had moved on from Aerosoles. Modern Counsel wishes her the best in her future endeavors.



signature insightful manner of distilling complex situations to core pivotal issues has inspired us all and served her company well. She has overcome many significant business challenges relying upon her cleverness and well honed legal prowess.” – Howard Aronson, Managing Partner

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Chain of Command

Dianne Ralston is no stranger to change. In the last three years, she’s tackled a diverse leadership portfolio for three different companies. She shares how her experiences have built upon one another and her best practices for smooth transitions. BY MELISSA SILVERBERG

Modern Counsel : You started with FMC in early 2015. How did your previous roles prepare you for where you are now?

DIANNE RALSTON General Counsel and Corporate Secretary FMC Technologies




Dianne Ralston : I began my legal career as a litigator in private practice. After litigating for several years, I became increasingly interested in strategies to prevent disputes prior to litigation. Having worked for Shell Oil Company prior to law school, I had a business background, so I began looking at in-house opportunities. I took a role with global oilfield services company Schlumberger Limited and spent 17 years there. I was attracted to Schlumberger’s focus on finding good lawyers who would fit in their culture rather than a specific private practice specialty. They believed in developing lawyers through diverse legal roles. My career included legal roles with different business units and different legal functions. I also took a business role outside of the legal department. Those experiences expanded the breadth of my legal knowledge and practical business understanding—vitally important assets for a general counsel, which I became at Weatherford International.

The diverse legal issues and dynamic business environment there provided experience and perspective that helped me transition into my current role at FMC Technologies. MC : Is that trajectory fairly standard for a GC? DR : There is this traditional wisdom, which I don’t espouse, that in order to become a general counsel you need to be a securities lawyer. That’s not my background. I believe that litigation experience gives you the perspective to better anticipate the potential negative consequences from a contract, an employment decision, an acquisition, or other business decision. By anticipating the issue, you can implement strategies to eliminate the potential outcome or to reduce its impact. MC : How do you approach transition to a new company and a new role? DR : I do my homework before I join a company. When you’re coming into an organization, you need to have authentic curiosity about the company’s history, photo: FMC Technologies


Doing business has its drawbacks. Your law firm shouldn’t be one of them.

technology, and its people. I learn as much as I can, not only about what’s currently going on with the company, but its history and where I can add value to the current needs of the organization. MC : Describe your first 100 days on a new job. DR : In the first month I get up to speed. People will make a line outside my door, and I need to demonstrate responsiveness. But, by month two or three, I need to be more strategic and start setting my own priorities. This includes doing an assessment of my department in terms of people, processes, and systems. Within the first few months I’ll make an inventory of what is working well and what is not and make a plan to address improvement areas. MC : What are the challenges of transitioning to a new company? DR : Every company’s culture is different. Everything from the mundane to the strategic will be very different. Understand that and take time to learn the culture and the history behind it. A GC is brought in to be a part of the leadership team, so you need to demonstrate where you can add value on both legal and business issues. The biggest challenge in the early days is navigating that delicate balance of knowing when to interject with new perspectives or direction and when to sit back and listen and learn. MC : How do you gain trust in a new role? DR : The three biggest factors to gaining trust with your peers are demonstrating your willingness to work hard, your desire to collaborate with and learn from your peers, and your ability to give practical legal and business advice.

So You Want to Be a GC? Ralston’s tips for making the jump to the general counsel role ROUND OUT YOUR SKILL SET. If you have been in one legal function (compliance, litigation, IP, securities), find opportunities through projects or assignments to learn about the other legal roles necessary to support your business. UNDERSTAND HOW THE C-SUITE EXECUTIVES IN YOUR COMPANY MAKE DECISIONS. When you interview for a general counsel role, you aren’t going to be talking to other lawyers, you are going to be talking to the CEO, COO, and CFO. If you don’t understand the priorities for those roles in your current company, you are not going to be in the position to demonstrate that you know how to be a business partner in the new organization.

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“When you have a malfunctioning civil justice system, new, sensible reforms and regulation are essential. As it is, overregulation makes it more difficult for businesses to be successful and simply adds to the problems.” ­– JIM EDWARDS, CUBIC CORPORATION




EVALUATE In the corporate sphere, the law can often be a limiting factor—but sometimes its constraints don’t reach far enough. Adaptation is the remedy for both scenarios and is demonstrated in this section by attorneys from MPAA, Cubic Corporation, and NRG Energy. We suggest modifying the legal aphorism: If you have the law on your side, argue the law; if you have the facts, argue the facts; if you have neither, make the most of what you have, and find a way to “Yes.”

INQUIRY How do you promote creative problem solving within your team? What resources can you employ to improve the rules and regulations governing your industry? On page 142, Matt Hamel takes us inside publicly traded, family-owned BrownForman. Read McKinsey & Company’s “The five attributes of enduring family businesses” for insights on how such institutions maintain successs.

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Not Another Napster Illegal downloads maimed the music industry. The Motion Picture Association of America is leveraging voluntary initiatives to make sure they don’t do the same to film. BY MATT ALDERTON // PHOTOS BY CALEB FOX








“This is not kids like Shawn Fanning and Sean Parker, who started Napster back in the day. The people who we’re targeting now are substantial commercial businesses. It’s organized crime at the highest level.” – STEVE FABRIZIO





People love to go to the movies. The popcorn’s smell is intoxicating. The screen’s glow is hypnotic. The seat’s embrace is warm. And the surround sound is soothing—even when its swells are a cacophony of rapid gunfire, catastrophic explosions, and bombastic battle cries. Like most good things, however, a movie’s magic is easy to take for granted. After a film’s final cathartic frame, the lights come up and the audience exits. Moments later, the magic is over— unless you’re one of the few who stay seated long enough to watch the credits roll. Then, a stream of names and job titles unfurl before you—many of which you’ve never heard of, like “foley artist,” “gaffer,” “best boy,” and “dolly grip”—and you realize it was never magic to begin with. It was work. Really, really hard work. In this moment, somewhere between the credits for assistant editor and colorist, the impact of digital piracy becomes clear: it doesn’t just steal pocket change from movie stars; it steals living wages from the many shoulders on which they stand. “Intellectual property theft is not a victimless crime,” says Steve Fabrizio, senior executive vice president and global general counsel for the Motion Picture Association of America (MPAA), a national trade association representing the film and television industries. When a major motion picture or a major television program is unlawfully downloaded, he says, the people who are downloading it aren’t thinking about the literally hundreds of people who go to work every day to make that television show or movie. “These are not the headliners who walk red carpets; they’re people who construct sets, do lighting and electrical, and who do catering and car services. There is an

enormous infrastructure of everyday people who are hurt when content is stolen.” Unfortunately, the problem of copyright infringement is as difficult to solve as it is harmful to tolerate. Two decades into the digital age, MPAA is rethinking its approach to quelling online piracy. Organized Crime Catching and prosecuting thieves is hard enough when they steal physical property. When they steal intellectual property, it can be downright impossible. “Stolen content is sold online, where it can be downloaded by millions of people,” Fabrizio explains. “This requires enforcement across borders, which is extremely difficult. These guys don’t have any of the real-world business constraints that legitimate businesses have. When one

432 million

Internet users infringe on copyrighted material every month.

site gets shut down, they open another one elsewhere.” According to a 2013 study by NBCUniversal and brand protection company NetNames, 432 million Internet users infringe on copyrighted material every month. Their appetite for illegal content is so big that the amount of Internet bandwidth used for illegal content grew 160 percent from 2010 to 2012 and now accounts for nearly a quarter of all Internet bandwidth. With numbers that large, no single entity can stop online piracy alone. A team approach is needed, says Fabrizio, who has been fighting online piracy since 1996, when he joined the music-industry equivalent of MPAA, the Recording Industry Association of America (RIAA). At that time, illegal music downloads were flowing unfettered from peer-to-peer file-sharing websites like Napster. “Although we didn’t understand the technology when Napster came onto the scene in 1999, we knew we had to take action right then and there; if we didn’t, the music industry would completely lose control of content and any hope of having its own online business model,” recalls Fabrizio, who was part of the legal team that won the landmark case A&M Records Inc. v. Napster, in which the court ruled that Napster could be held liable for “contributory” and “vicarious” infringement of music-industry copyrights. In those early days of the Internet, cutting off the snake’s head was a swift and certain solution to an emergent problem. Today, there are too many snakes and too few swords. “The theft of intellectual property has become big business,” Fabrizio says. “This is not kids like Shawn Fanning and Sean Parker, who started Napster back in the day. The people who we’re targeting now are substantial commercial businesses. It’s organized crime at the highest level.” Target: Intermediaries Given the scope of online piracy today, MPAA is fighting copyright infringement not only with traditional weapons like regulation and litigation, but also with new tools, such as voluntary initiatives, which engage the entire digital-media supply chain in volunteer efforts to self-police against piracy. JAN/FEB/MAR 2016




Steve Fabrizio witnessed the birth of digital piracy in the ‘90s when he was senior vice president of legal and business affairs at the Recording Industry Association of America (RIAA). During his tenure there, he litigated the 2001 case A&M Records Inc. v. Napster, a landmark intellectual property case during which the court ruled that file-sharing website Napster was liable for its users’ copyright infringement. Fabrizio spoke on the historic case and how it continues to shape intellectual property law today.

MODERN COUNSEL : If you hadn’t won the case against Napster, how would the music industry be different today? STEVE FABRIZIO : If we hadn’t won that case, it’s hard to see how the major, legitimate music services we have today would have been able to get a foothold, because “free” would have become the dominant business model. MC : So in a sense, the Napster case saved the music industry. But did it also change it? SF : Yes. Music was the canary in the coal mine. And in so many ways—I’m sure my friends in the music industry would not like me saying this, but it’s true—the canary died. What exists today as the worldwide music industry isn’t the same as the worldwide music industry that existed on the day Napster started. It is a much, much smaller industry. The relationship between record companies and artists is substantially different. Artists used to be able to keep so many more rights that they themselves could exploit, and record companies can no longer afford to have them keep those. In businesses like music, most of the product fails. Ten percent of the albums released end up having the support of the whole industry. That used to be okay, but now those 10 percent are also your most-stolen and pirated albums online. It is creating an environment in which record companies simply cannot afford to take chances on artistically valuable music that may not have the same commercial appeal. Record companies can no longer afford




to take chances on artists that might need an album or two to develop. So the music industry has stabilized in the sense that its spiral down has stopped. But it has not come back up to where it was. The whole industry was changed because of the piracy onslaught. MC : Are movies the next frontier in the online piracy debate? SF : I don’t consider movies next. What I really consider next is all other digital entertainment content. Music was first because music files are relatively small— although they didn’t seem that way at the time—but the rest of the creative content community is now dealing with the same issues that the music industry dealt with, whether it’s movies, television shows, video games, or book publishers. Even software publishers have to deal with stolen products. So, everybody else is now creating business models that take advantage of the demand online, and they are all very aware of the experience of the record companies. MC : How are things different this time around? SF : The record companies were decimated because they didn’t have enough lead time to protect themselves against the piracy that was occurring. When Napster hit, you didn’t get to watch the train coming down the track; by the time you blinked, the train was barreling past you. The rest of the creative community has had time to be able to develop some strong and creative business models that have helped them get out in front of the problem.

“To fully understand what voluntary initiatives are and why they’re so important, you need to understand the basic supply and demand of stolen intellectual property,” Fabrizio says. On one end, you have supply: people who steal production copies of films from production houses or record movies in theaters. They supply a vast array of websites—retailers, if you will—that offer stolen content. On the other end is demand: users who stream or download that stolen content. In between the supply and the demand are a series of actors who knowingly or unknowingly enable, facilitate, and profit from the transmission of stolen property. Voluntary initiatives engage the in-between parties, including: search engines, which help users find pirated content; payment processors, who facilitate payment for stolen content; domain name registrars, who provide the digital storefronts in which stolen content is sold; hosting services, which store stolen content; and advertisers, who subsidize stolen content. “There is a whole range of intermediaries without which these pirate sites would not be able to operate,” says Fabrizio. “We’re addressing these intermediaries because we believe they have an obligation to mitigate the harm that’s occurring through their systems, not only from a legal perspective, but from a moral perspective.” The same pirate sites that offer illegal content are often rife with other dangers to consumers, ranging from identity theft to malware to illegal drugs and pornography. “You can try to legislate rules, and you can try to litigate behavior—both of which have their place,” says Fabrizio, “but first and foremost, we believe that it’s in the long-term interest of all these players to work with us to create a safe and secure Internet.” “Voluntary” Solutions By working together, stakeholders participating in voluntary initiatives can pool resources not only to extend their reach, but also to develop more creative solutions to the piracy problem.

EVALUATE Mitchell Silberberg & Knupp LLP congratulates our friend and colleague, Steven Fabrizio, on his well-deserved recognition in Modern Counsel.

“[The Copyright Alert System] is much better than litigating our way toward a solution or trying to have Congress legislate one.” – STEVE FABRIZIO

One of the earliest examples is the Copyright Alert System, administered by the Center for Copyright Information (CCI). Formed in 2011 as a collaboration between the content-creating community and Internet service providers (ISPs), CCI includes among its members MPAA, RIAA, the Independent Film & Television Alliance, the American Association of Independent Music, and five of the nation’s largest ISPs: AT&T, Cablevision, Comcast, Time Warner Cable, and Verizon. Utilizing that partnership, the Copyright Alert System leverages consumers’ Internet services to educate them about copyright infringement when it occurs. Here’s how it works: When artists and content owners see that someone has put music, movies, or TV shows online without permission, they notify the appropriate ISP, which issues a notice—called a copyright alert—to the consumer who posted the content. The alert informs the consumer that his/her account was used for unlawful activity and educates him/ her on ways to prevent further copyright infringement. If the behavior continues, the ISP may temporarily reduce the consumer’s Internet speed or redirect the consumer to a landing page until he/she contacts the ISP or completes an online copyright education program. “Historically, ISPs and content owners were always fighting. Over the course of a couple years, however, they negotiated this voluntary initiative,” Fabrizio says. “The program is now in its third year, and it has greatly improved the relationship between ISPs and the content

community. We now sit around the table and discuss issues in a way we couldn’t before. It’s much better than litigating our way toward a solution or trying to have Congress legislate one.” Another recent voluntary initiative is the Trustworthy Accountability Group (TAG). Though it’s still in its nascent stages, it ultimately will accredit thirdparty businesses that score websites based on their lawfulness. The scores will be furnished to advertisers so they can do a better job funneling advertising dollars away from illicit websites. “It’s kind of like a credit score for websites,” explains Fabrizio, who says MPAA, likewise, is engaging payment processors, domain name registrars, and search engines to develop voluntary initiatives tailored to their specific businesses. So far, most of the companies it’s approached have been receptive, with one notable exception: Google, which, in a very public dispute with MPAA, has accused the association of trying to censor the Internet. “If there’s one con with voluntary initiatives, it’s that it takes two to dance,” Fabrizio says. “While most of the responsible players in the Internet community have expressed a willingness to work with us, there’s still a mind-set among some in the Internet community that an open and free Internet somehow means that content should be free for the taking.” Open and free are great—MPAA supports them, says Fabrizio. “But what we’re talking about here is garden-variety theft. You can put lipstick on a pig, but it’s still a pig.” Though not everyone in the Internet community has come around yet, Fabrizio thinks they eventually will. “Five to ten years from now, I envision an era in which the Internet community embraces protection of intellectual property, because it’s only through having a safe and secure Internet that the Internet is going to continue to flourish,” he concludes. “You can never end piracy, but you can contain it to a level where it does not disrupt the ability of legitimate businesses to take hold, and I believe that we will be able to accomplish that with voluntary initiatives.”

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Engineering an Image Dave Snively doesn’t deny that Monsanto is one of the most controversial companies in the world. But the biotech company’s general counsel knows that reputation is a perception—one he hopes can be improved as the company takes ownership of its story and sets the record straight BY JEFF SILVER

Monsanto is one of the most well-known companies in the world and may also be one of the most controversial. By bringing together agriculture, science, big data, and advanced biotechnology, the company has not only produced significant innovations; it has encountered resistance from opponents who are against changing traditional farming methods or established agriculture business systems. Balanced between the complexities of the company’s science, tech, controversies, and complex global markets is Dave Snively, executive vice president, secretary, and general counsel. After 31 years with the company, he’s grown accustomed to navigating global agribusiness and its maze of regulatory frameworks. And he doesn’t shy away from the hot-button issues that come with them. He believes the reason Monsanto finds itself at the center of so many disputes is the public’s lack of knowledge about the company. In fact, aside from supporters and detractors at opposite ends of the spectrum, he says there is a much larger group in the middle that doesn’t understand what the company does. What is surprising is that he believes Monsanto bears some of the blame for those circumstances. “For years, we were run by those who believed that science would be able to demonstrate how beneficial and safe our work and products are,” Snively says. “But as a lawyer, I know that perception is reality, and we need to explain our views so that people have a clearer picture of 118



what we do and aren’t afraid of the innovations we develop.” Until recently, Snively says, Monsanto was its own worst enemy. Opponents were defining it, and the company wasn’t communicating its own messages. Snively’s global legal team is part of the effort to create an objective understanding of the company’s presence and ethics. This includes participating in a three-day conference to discuss how public opinion impacts its decisions and influences what he calls the company’s societal permission to do business. “We have to earn our right to exist every day,” Snively says. “In addition to our scientific breakthroughs, we have to be more vocal about our sustainability efforts.” In addition to communicating its message more effectively, Snively says Monsanto has been doing a better job of listening. Snively points out that senior leadership spent the entire summer of 2013 holding private listening sessions with a variety of organizations, including nongovernmental organizations that had been critical of the company’s products and practices. This illustrates a more thoughtful approach to facilitating constructive exchanges with critics as well as supporters. “We want to hear what they have to say about us, and what they feel we need to do differently,” he says. These efforts are beginning to show positive results, such as more supportive media coverage, but progress is made gradually. “It requires


“Just because we have legal standing to do something doesn’t mean we should do it.” – DAVE SNIVELY

photo: Monsanto




“As a lawyer, I know that perception is reality.” – DAVE SNIVELY

a coherent, coordinated, and long-term effort to turn a supertanker,” Snively says. This includes work handled by the legal department. In Bowman v. Monsanto, a 2012 US Supreme Court case, the company won a unanimous decision that supported seed technology’s protection by existing intellectual property laws. Snively says that while the decision was a controversial one, it provides an opportunity to refute the perception that the company routinely sues farmers for saving seeds from one planting season to another without additional payment. He points out that, though approximately 250,000 farmers use Monsanto seed technology annually, the company has brought only 156 lawsuits over a 20-year period. Of those, only 12 went to trial, with all settlements and judgments donated to charity. “It would be an awful business model to be suing your customers,” Snively says. “We’re very selective about the cases we pursue, but they’re often based on reports from neighboring farmers who want to make sure that everyone is playing by the same rules. We go to great lengths to be certain we’re not overreaching. Just because we have legal standing to do something doesn’t mean we should do it.” Recruiting and Preparing New Lawyers The combination of Monsanto’s position in the public eye, the sophistication of its science and technology, and the complexity of its worldwide business create a legal portfolio that is somewhat staggering in its breadth and depth. For example, a small sample of the range of the legal department’s responsibilities includes managing intellectual property rights, understanding scientific processes and principles, and establishing appropriate foundations for global export of products. And that’s just the legal work. Snively estimates that it takes six months to a year for new hires to understand the matrix of internal groups and departments that is so complex it can’t be adequately displayed on a single organizational chart. “There’s simply no law school that teaches the issues we handle—whether it’s developing a new system for paying for seed, like we’ve done in Brazil; the issues in the Bowman case; 120



or working on matters that are part of developing a new breed of corn for a particular region in Africa,” Snively says, “there’s an immense amount of business, scientific, and legal information new lawyers have to absorb here.” To develop the talent needed to manage all of these details, Snively has created an in-house training program for recent law school graduates. The program’s methodology is a detailed and methodical approach to immersing new hires in the company’s culture, networks, science, and the law in order to create from the ground up the type of attorneys Monsanto needs. The program, which is in its early stages and is expected to require five years of training to complete, is modeled on Snively’s own experience, through which he benefited from the attention of “very patient” scientists and IP lawyers. The goal is to enlist a community approach in which senior staff, mentors, and managers are all accountable for new hires’ training, progress, and assessment of when they are ready to independently take on substantive assignments. One of the precepts Snively stresses to new recruits and established staff lawyers alike is that the issues they handle are too complex to be managed alone. Teamwork is essential. This extends to Monsanto’s outside counsel. Though the company actually works with hundreds of outside firms, 80 percent of its assignments go to approximately 20 firms that have the required sophistication, legal, and scientific expertise and institutional knowledge of Monsanto and its culture. Philip Perry, a partner at Latham & Watkins, leads of one of those outside teams. “Dave manages perhaps the most complex and interesting portfolio I’ve seen in any company,” says Perry. “He does a terrific job of bringing in the right people and cutting straight to the core issues. He drives novel legal and business solutions when ‘simply ordinary’ just isn’t enough.” Perry previously served as the general counsel of two federal agencies and handles a wide range of biotechnology matters. In addition to the challenge of global issues, the excitement of working with high-caliber inside and outside counsel is one of the things Snively enjoys most about his job. “We get to work on cutting-edge issues that no one has encountered before with some of the top lawyers in the world,” he says. Moving Forward the Right Way Snively is a highly ethical and religious person. He is chairman of the Catholic youth ministry

Partners in High Places Snively speaks on Monsanto’s work with Legal Services of Eastern Missouri (LSEM) to provide legal assistance to low-income and elderly clients MODERN COUNSEL : How does Monsanto’s work with LSEM affect Monsanto? DAVE SNIVELY : We have great resources at our disposal that we can share with the local community. After Michael Brown, Jr., was killed in Ferguson, [Missouri] just seven miles from our headquarters, it reinforced our awareness of how much we can do to help people in need. MC : How do you do that, exactly? DS : We take several different approaches. Pledging money is one of them—$3 million toward helping to rebuild Ferguson through LSEM and several other nonprofit agencies supporting local job development, education, and economic vitality. We also encourage our staff lawyers to participate in “street law” clinics to help out. And we leverage our extensive network to encourage other local companies and law firms to contribute time and funds as well. MC : What does the company get out of the partnership? DS : Monsanto is no stranger to controversy and negative media coverage and public perceptions. This kind of effort shows us more as who we really are: people who care about our neighbors, who may be disadvantaged in one way or another but still deserve adequate legal representation and not to be taken advantage of. MC : What are some examples of activities the company’s legal team has been a part of? DS : Our lawyers have participated in LSEM-sponsored community forums, workshops, and training sessions and advised residents and business owners on a broad range of issues, from insurance to domestic matters like restraining orders and guardianship. We also hold training sessions for local attorneys so they can better represent the community.


“We have to earn our right to exist every day.” – DAVE SNIVELY

Life Teen International, Inc., and a founding director of the Roman Catholic Foundation for Eastern Missouri. As he manages Monsanto’s legal issues, he places tremendous importance on acting ethically in carrying out all of the company’s responsibilities. This commitment covers a range of activities that are spread around the globe: building schools and eliminating child labor in India, establishing legal and business systems in Brazil and sub-Saharan Africa, maintaining the company’s pledge to support human rights in its worldwide facilities, and ensuring the health and safety of all Monsanto’s products and its 23,000 employees. A former litigator with a self-described binary perspective (“You either win or lose”), Snively’s underlying philosophy is that it’s essential “to do it the right way.” Reflecting on a higher calling, he says, “Our challenges are nothing less than finding solutions in the face of climate change, global warming, and drought. We have to find them efficiently, effectively, and in ways that facilitate collaboration. And, ultimately, we have to get all of those things right, because if we don’t, the results impact people’s lives and livelihoods and whether they have enough to eat.”

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AND DORR LLP : “Dave Snively defines the standard for excellence in a general counsel. He’s fully engaged on all strategic and tactical issues, and the quality of his judgment makes him an invaluable resource to both management and outside counsel.” Seth P. Waxman, Partner

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A Promising Future The University of Kentucky was founded on a promise to lift Kentucky up with a world-class institution; 150 years later, general counsel William Thro is helping the university keep its word BY MATT ALDERTON

Each spring, on the first Saturday in May— dubbed “Derby Day” since the inaugural Kentucky Derby in 1875—America boards the Kentucky bandwagon. It fawns over the opulent hats, which bloom on the tops of heads like gardens of feathers, flowers, and felt. It coos at the front-porch cocktails: mint juleps, Long Island iced teas, and bourbon slushes. And, of course, it cheers for the thoroughbred contenders with names like Gallant Fox, Majestic Prince, and Flying Ebony. Indeed, for one day out of 365, Kentucky is the center of the social universe. But for the other 364, it’s an afterthought, mostly forgotten if not for its equine assets and barrel-aged bourbon. The tragedy of this heedlessness is what the nation would see if it ventured outside of Churchill Downs: beyond Kentucky’s beautiful bluegrass is a state with significant generational challenges, says William Thro, general counsel at the University of Kentucky in Lexington, Kentucky. “There are three regions of Kentucky— Louisville, Cincinnati, and Lexington—that are doing relatively well economically and, increasingly, in terms of quality of life,” explains Thro, a Kentucky native who was raised in a small town near Fort Knox, Kentucky, southwest of Louisville. “If you go to Eastern Kentucky, however—to the coal fields south and east of 122



Lexington—along with great beauty, you’ll see severe poverty and challenges associated with access to quality health care and jobs.” In fact, 16 of the nation’s 100 poorest counties are located in Kentucky, which is more than any state, except Texas. “People in these areas have incomes that are half what they are in the rest of the state,” Thro continues. They also have severe health-care problems: the number of people needing cardiology treatment, the number of people suffering from obesity or diabetes, and the number of people who smoke and potentially could develop lung cancer are well above the national average. Educational inequities, likewise, are stark. The high school completion rate in Eastern Kentucky has improved in the last generation under a set of far-reaching reforms, but attainment levels remain well below the national average, says Thro. He attributes Kentucky’s decline to its antiquated economy. “If you go back 30 years, agriculture tended to center around tobacco, which, of course, is no longer fashionable.” Some farmers have been able to grow other crops, but many haven’t. Another outdated major industry is coal. As the nation moves to cleaner energy sources, coal has gone out of style in a big way, and it shows in the state: As recently as 1985, there were 1,858 coal mines in Kentucky employing

Keeping the Kentucky Promise A rundown of the university’s efforts to make good on its promise of a bright future for the state NATIONAL MERIT SCHOLARS: The University of Kentucky has added 289 National Merit Scholars in the last three years, which places the university in the top 10 among public institutions in the country. ON-CAMPUS HOUSING: Before the promise, 88 percent of first-year students lived on campus. Today that portion is greater than 90 percent. $1.8 billion in new construction is underway or will begin soon. The University of Kentucky boasts the largest publicprivate partnership in student housing in American public higher education, with nearly $265 million in new residence halls built in the last three years.


“If there’s any place that could benefit from having a worldclass research institution that’s striving to improve the lives of its citizens and the quality of life in its state, it’s probably the Commonwealth of Kentucky.” – WILLIAM THRO

photo: Mark Cornelison




In-House On Campus According to Thro, GCs working in education have three primary functions: ATTORNEY : “The ‘attorney’ role is essentially making sure that the university is complying with the law—that everything is above board and that in our efforts to change the world we don’t inadvertently violate any laws. That is the traditional role for a general counsel or lawyer.” COUNSELOR : “If you look at most people’s bar certificates, it will say, ‘John Smith is admitted as an attorney and counselor at law. For me, being a ‘counselor at law’ means using my analytical skills to advise the university president and senior administrators: ‘What you’re about to do is legal, but it’s not a good idea. Here’s why.’ Just because something is legal does not mean it’s wise. In that sense, I’m a strategic thinker; I’ve got a seat at the table in terms of debating what the university should do and how it should do it.” PROBLEM SOLVER : “The third role, which I find to be immensely fun, is coming up with innovative legal solutions that will allow us to accomplish our objectives while at the same time maintaining compliance with the law. An analogy I frequently use is: The shortest way between Lexington and Cincinnati is a straight shot up I-75, which will take you about 90 minutes. However, there are other ways to get to Cincinnati. If I-75 was blocked, I could still get to Cincinnati. Similarly, if the easiest way of achieving an objective is blocked because of some legal or regulatory impediment, my job is to find the legal back roads that will get us to our objective without violating the law.”




36,814 people. In 2013, there were just 279 coal mines employing 11,885 people. “Jobs that once were providing a middle-class or upper-middle-class existence no longer exist or are threatened,” Thro says. It might seem reasonable that a public university in this socioeconomic climate would ignore or detach itself from its surroundings, especially in the interest of out-of-state recruitment of faculty and students. Instead, the University of Kentucky is one of the state’s greatest tools to change the cultural norms that have caused these conditions. When it was established as a landgrant university in 1865, the University of Kentucky entered into a covenant with the state that promised to provide Kentuckians with education, research, and services, which would ensure a bright future for the commonwealth. University of Kentucky President Eli Capilouto calls this covenant the “Kentucky Promise.” When Capilouto took office in 2011, he pledged to renew and strengthen that promise as the institution neared its 150th anniversary. “One hundred and fifty years ago, the University of Kentucky made a promise to the people of Kentucky to improve their lives and to improve the state as a whole,” says Thro, who joined the university in October 2012 to help Capilouto fulfill the Kentucky Promise. “Eli wanted to redouble our efforts to keep the Kentucky Promise and be the institution that the people of Kentucky deserve. Kentucky, in many ways, is a disadvantaged state, and if there’s any place that could benefit from a world-class research institution that’s striving to improve the lives of its citizens and the quality of life in its state, it’s probably the Commonwealth of Kentucky.” “Brain Drain” One of the chief challenges confronting the state—one the University of Kentucky can play a lead role in confronting—is what Thro calls a Bluegrass State “brain drain.” “Too often the best and brightest that Kentucky produces—the people who could make our economy grow by starting businesses and making discoveries—do

not stay in Kentucky,” he explains. “They go out of state for college, and they never come back.” Until he returned to Kentucky to join the university, that was the narrative of Thro’s career. Upon graduating from high school, he went to Hanover College in Indiana, followed by law school at the University of Virginia, and graduate school at the University of Melbourne in Australia. Apart from a year he spent in Louisville in a judicial courtship, he lived his entire adult life out of state—first in Colorado, where he was assistant attorney general and a litigator for the Colorado Department of Education and Colorado State University; then in Virginia, where he had a similar position in the attorney general’s office; worked as in-house counsel for Christopher Newport University; and served as solicitor general, chief appellate advocate for the state government. “When I was a senior in high school, the University of Kentucky really wasn’t on my radar,” Thro says. “They did nothing to recruit me or attract me, so I went out of state—and I stayed out of state for 30 years.” The University of Kentucky can help Kentucky turn itself around, Thro suggests, by stopping the mass exodus of young talent from the state. “For [Capilouto] and his team, keeping the Kentucky Promise means transforming the university in a number of important ways,” he explains. “One is enhancing the quality of our undergraduate educational experience; we’ve got to have a world-class undergraduate program because if you stay here for four years for college, there’s a good possibility that you’re going to stay here permanently.” Talent retention is one part of the Kentucky Promise. Another is research. “We need a vibrant research program,” Thro says. “This research needs to encompass all aspects of the human experience, but, in particular, it needs to improve the quality of health care for all Kentuckians—especially those people in Eastern Kentucky, who will benefit greatly from breakthroughs in cancer treatment and in major drug development.”


One of the chief challenges confronting the state—one the University of Kentucky can play a lead role in confronting—is what Thro calls a Bluegrass State “brain drain.”

Early Wins Many universities already have outstanding undergraduate and research programs. The University of Kentucky has had pockets of significant strength in both areas, but to be one of the top residential public research campuses in the country, Thro says a comprehensive commitment to excellence must be established in both undergraduate education and research. He cites the University of Wisconsin, the University of North Carolina, and the University of Virginia as examples of high-quality research institutions that the University of Kentucky aspires to emulate. These institutions embody comprehensive institutional excellence and showcase what a world-class university can mean for a state. “In the 1920s, Wisconsin was mostly a rural state with a bunch of dairy farms,” Thro says. “But the University of Wisconsin—arguably one of the great research universities in the world—made some decisions in the 1920s and early 1930s that caused it to become the major research institution that it is today. We have to catch up in that regard, and there is, at the University of Kentucky, an unyielding commitment to doing so.” Among the actions already taken under Capilouto’s renewed commitment to the

promise is construction of new housing. In 2012, the university started a six-year plan to revamp and revitalize its on-campus housing. Since 2013, the university, in partnership with Memphis-based college housing developer and manager EdR, has constructed new residence halls with nearly 4,600 occupancies. Under the terms of the agreement, EdR will have a 75-year lease on the new housing and will collect rent from students, a portion of which it will pay to the university after meeting certain profit thresholds. Along with more than 680 occupancies added in 2005, the university now has more than 5,200 modern student occupancies. By August 2016, it will add more than 1,000 new occupancies, meaning the university will house a total of more than 6,400 students. That will place the University of Kentucky at more than twothirds of the goal Capilouto laid out three years ago, which was to complete 9,000 new student occupancies. “According to all the research, if you want students to be successful, the students need to have a sense of community,” Thro says. “It’s hard to develop that sense of community if they’re coming to campus, going to class, then going home to an off-campus apartment where they never encounter another student.” The university has outsourced its on-campus dining services, resulting in better food and lower food costs. “All of this has caused many more of our students to want to live on campus,” Thro says. “We have a waiting list with our new residence halls, which also contain high-tech classroom and community spaces. We expect those kinds of living and learning spaces to lead to greater student retention and higher graduation rates.” Another important initiative has been to increase scholarships for National Merit Scholars. “By giving substantial scholarship assistance to National Merit Scholars and students who are close to National Merit status, a lot of Kentucky’s best and brightest are staying home,” Thro observes. “Under President Capilouto the number of National Merit Scholars attending the University of Kentucky has

essentially doubled to well over 100 in each entering class.” Yet another early achievement toward fulfilling the Kentucky Promise is state funding for a $265 million medical research center. Scheduled for completion in 2017, the six-story facility will conduct research on cancer, heart and pulmonary disease, stroke, and other chronic illnesses affecting Kentuckians en masse. “We persuaded the state legislature in a non-budget year to fund the creation of a new research center that will focus on medical and pharmaceutical research in order to improve the lives of all Kentuckians,” says Thro. He adds that another important development is the expansion of the university’s health-care system, UK HealthCare, which is forming partnerships with health-care providers across Kentucky to expand its reach to underserved communities. “Our goal is to make sure Kentuckians get the best health care possible, as close to home as possible.” Lawyering Change Although the Kentucky Promise is Capilouto’s vision, Thro has been instrumental in its execution. “Figuring out how to do what the university wants to do within the confines of the law can sometimes require some really innovative, outside-the-box thinking,” Thro says. “That’s where I have really been able to bring my skills and experience to bear.” Those skills are especially useful in the current fiscal environment, which demands an elevated level of legal counsel and problem solving, according to Thro, who says the University of Kentucky gets just $280 million, or 8 percent, of its $3.4 billion budget from state appropriations. The university needs to look for alternative revenue sources, including philanthropy, tuition increases, and public-private partnerships, which require legal negotiation, strategy, and maneuvering. “Long-term, we have to accept the reality that our state appropriations are unlikely to grow quickly, if at all,” he says. “That’s a huge challenge for the general JAN/FEB/MAR 2016



Good law firms help you handle legal problems.

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Congratulations to Bill Thro of the University of Kentucky on his accomplishments and recognition by Modern Counsel At Stites & Harbison, taking the initiative is the rule, not the exception. We are here to understand your business and anticipate your needs – working proactively to avoid problems and engender peace of mind.





counsel of any flagship university, but particularly in Kentucky.” Still, Thro is as optimistic about Kentucky’s future as he’s ever been. “I think we can move the needle in the short term, and I think we can move the needle in the long term,” he says. “If you can educate a generation of really bright people and get most of them to stay in Kentucky, you’re going to have a highly educated workforce that will form the backbone of your economy 15 years down the line when they are in their mid-30s—and that’s going to lead to more economic growth.” He’s also optimistic about the environment of health care in the state. “To the extent that you can improve the health care of people in Kentucky, you’re going to give them a better quality of life, longer life expectancy, and more time in the workforce, which is a good thing in terms of their need to draw on the resources of the government and also their ability to contribute as much as possible to society,” says Thro. He adds that the university’s future, in many ways, will dictate the state’s future. “One of our professors, Frank X. Walker, who was the Poet Laureate of Kentucky, wrote a poem for our sesquicentennial about the university and its contributions to the state. There is a line in it that I think is particularly poignant: ‘There is no vaccination against ignorance, but there is us. There is this university.’ We really believe that and take it to heart: that this institution can make a difference for the people of Kentucky.”



pleasure to work with. His legal acumen combined with his understanding of the higher-education environment and his client’s needs enable him to effectively accomplish the university’s goals.” – Janet A. Craig, Chair, Health Care and Insurance Regulatory Service Groups


Utility Players The compliance function is expanding by the day as it absorbs ever-increasing regulations and liabilities. At NRG Energy, it’s an element of culture BY JEFF SILVER

Power and utility companies in the United States are among the most-scrutinized and regulated enterprises in the country. This control and oversight became even more stringent when the Energy Policy Act passed in 2005, which the Federal Energy Regulatory Commission (FERC) described as making “the most significant changes in the commission’s authority” since the mid-1930s and the days of the New Deal. There are more stringent regulations that will go into effect soon. Developed and enforced by the North American Energy Reliability Corporation (NERC), these regulations assign a low, medium or high designation to almost every power-generating asset in the country. At NRG, a transformational energy company that serves more than three million retail customers, the responsibility of complying with all of these federal guidelines falls to Michael Bramnick, the company’s senior vice president and chief compliance officer. He points out that when he first joined the company in 2004, the focus on fulfilling these types of obligations was very different. “Although they’ve always been important, compliance and ethics have really come into their own in recent years,” Bramnick says. “They weren’t predominant areas of focus when I was starting out, but now they’ve truly evolved into integral elements of strategy and business operations.” Whether he is focused on corporate compliance matters or meeting FERC and NERC

standards, Bramnick feels the most effective strategy is to make compliance a holistic part of NRG’s overall culture. That requires a focus on educating everyone in the company not only on what the enforceable rules are, but also on the company’s mission, values, and expectations. “We can’t talk about codes of conduct and making ethical decisions without talking about how we’re regulated and what it means to make those kinds of decisions in that environment,” he says. “Beyond that, I want my colleagues making the right choices and behaving a certain way because doing so is part of NRG’s culture and values. If they’re focused on that, then they’ll make the right regulatory decisions.” The company’s culture can be divided into two areas: one sets general standards for its employees; the other guides its mission and business practices. Internally, the company stresses its STRIVE values: safety, teamwork, respect, integrity, value creation, and exemplary leadership. Its mission is to develop smart energy choices, and it does so by emphasizing sustainability among its employees through environmental efforts and its supply chain. This extends to “Go Green” initiatives to support a low-carbon economy; providing customers with the latest energy management tools and energy-efficient options; and balancing traditional energy generation with lower-carbon fuels, renewables, and other innovative technologies. Bramnick’s approach is to leverage the

Federal Energy Regulatory Commission AT A GLANCE

WHAT : independent agency FORMED : 1977 OVERSEES : interstate sale and movement of wholesale electricity, natural gas, and oil; liquefied natural gas terminals; interstate natural gas pipelines; and hydropower projects MAJOR RESPONSIBILITIES : regulating interstate transmission and wholesale sales of electricity and the sale of natural gas for resale AUTHORITY : answers to Congress

North American Energy Reliability Corporation AT A GLANCE

WHAT : nonprofit regulatory authority FORMED : 1968; reformed with new authority 2006 OVERSEES : seasonal and long-term reliability of North American bulk electric power system MAJOR RESPONSIBILITIES : develops, monitors, and enforces compliance standards for power system operation and monitoring and provides training and awards accreditation of power system operators AUTHORITY : overseen by FERC




“As more and more items fall in the cracks between traditional corporate functions, the CCO is an easy place to assign responsibility and accountability to the point that we become the Swiss Army knife in the C-suite.” – MICHAEL BRAMNICK




company’s mission and purpose to unite and align employees toward their goals and all aspects of compliance. “That’s what’s exciting about being here,” he says. “Our mission is nothing short of transforming the way people use and think about electricity and energy. If employees believe in the mission and how we’re going about executing it, then you get compliance and ethical decision-making as an added positive outcome.” Bramnick’s leadership style is based on trust and respect. When he was appointed NRG’s general counsel, he found himself suddenly supervising a department made up of highly experienced professionals who had been his peers. He decided the best approach was to show that he trusted them and would support their success. He carries that philosophy into managing corporate and regulatory compliance. Rather than attempting to police colleagues and staff, he chooses to provide supportive advice combined with effective monitoring. “I want our team to be viewed as a safe place for seeking guidance,” he says. Bramnick adds, “I believe in leaving talented people alone to do what they’re good at. For example, seasoned industry veterans don’t need my input on what terms should be in an agreement. We consult on strategy and approaches, but my meddling would only slow things down.” Bramnick believes transparency is essential in order to achieve compliance goals, so he relies on a multipronged strategy. First he focuses on facilitating cooperation from all employees by ensuring they understand the requirements and expectations and why they are being enforced. This means, for example, making them aware that it isn’t the chief compliance officer, but the Foreign Corrupt Practices Act, that prohibits giving certain gifts to a foreign official. “It helps everyone do their work appropriately if those kinds of details and the context of the requirements are clarified right at the outset,” Bramnick says. His second priority is ensuring transparency with NRG’s board of directors. This means that the board’s audit committee is assured of not only receiving updates on corporate and regulatory compliance programs at each meeting, but also of receiving immediate notification of specific types of allegations and concerns. These notices are published on the company’s intranet. “Once you establish and embed the kind of transparency within which the board is comfortable, management understands its role,

and employees are clear on their responsibilities, you create an environment that can foster trust at all levels,” Bramnick says. “It’s part of the culture of our company and part of the currency we need to do our jobs effectively.” This open approach extends to the corporate and regulatory groups’ relationships with the rest of the business. Rather than working exclusively from its headquarters in New Jersey, members of the compliance groups travel frequently to work directly with internal management teams at plants and offices around the country. These face-to-face interactions create more productive give-and-take and facilitate better communication among parties. Bramnick says there have been many occasions on which colleagues he has met with in-person have later contacted him directly for advice—something they probably would not have done without the personal connection. Emphasizing these interactions is probably related to the characteristics Bramnick feels are important for chief compliance officers (CCOs) to be successful (and which have more than likely played large roles in his own success in the industry): curiosity, the ability to delve deeply into an issue, and strong interpersonal skills. “When you get right down to it, these are strengths you need to help you see what may be coming around the corner, so you can effectively advise clients and help to steer the business in the right direction,” he says. Looking Ahead Bramnick plans to roll out a gamification initiative to increase employee engagement with and knowledge about compliance activities and regulations. Online instruction will present critical code of conduct information in a competitive gaming environment. Individuals will be able to test themselves and compare their scores to those of their colleagues. “This is a great alternative to traditional PowerPoint presentations and lectures that aren’t very inspiring,” Bramnick says. “And honestly, I think presenting the material as part of a scored game will be very effective at bringing out the innate competitiveness that NRG folks typically have.” Bramnick say the number of topics and responsibilities that fall under the CCO umbrella is increasing, characterizing them as “multiplying by the day.” Because compliance means different things at different companies, topics range from product safety to political action committee compliance and, in some photo: Jeff Weiner


“[Transparency is] part of the culture of our company and part of the currency we need to do our jobs effectively.” – MICHAEL BRAMNICK

organizations, even social media. “As more and more items fall in the cracks between traditional corporate functions, the CCO is an easy place to assign responsibility and accountability to the point that we become the Swiss Army Knife in the C-suite,” he says. Far from being a negative assessment, he feels this evolution provides tremendous opportunity for CCOs to learn more about their businesses and become more integrated into the strategic decision-making process. For this to happen, the CCO has to understand how the business earns its money, serves shareholders, and conducts day-to-day operations. “By mastering the big picture, the CCO can lend his or her voice to a range of diverse issues, gain insight into connections between compliance and strategy, and, hopefully, offer education and context that’s invaluable,” Bramnick says. “Ten years from now, CCOs will be more associated with a broader range of key business decisions than they are today.” It’s all part of an evolving future in which Bramnick sees behavior-based approaches taking on increasingly important roles and in which universally accepted, systemized, and flexible sets of standards will be implemented across industries. He predicts the results will be business environments that allow companies’ missions and cultural values to be more directly and dynamically translated into ethical decision-making within an accepted framework.

INNOVATION AND ACHIEVEMENT Baker Botts congratulates Michael Bramnick, Executive Vice President and Chief Compliance Officer at NRG Energy, for his corporate and regulatory compliance achievements. Michael has been instrumental in the success of NRG through his insights and leadership. Over the past 175 years, Baker Botts has partnered with leading energy industry companies and professionals, and we are proud to continue that tradition with NRG Energy and Michael Bramnick.





JAY STIEBER General Counsel Lettuce Entertain You Enterprises





Overtime Under Review As wage earners await a final ruling on overtime pay, employers prepare to pass on new costs. For restaurateurs, that could mean more than higher food prices. BY MELISSA ANDERS // PHOTOS BY CALEB FOX




President Barack Obama announced in June 2015 a plan that would make 4.7 million Americans eligible for overtime pay in its first year. The Department of Labor proposed extending overtime pay to most salaried workers earning less than $50,440 per year, up from the current threshold of $23,660, with future updates tied to inflation or wage growth. After considering public input, the department planned to issue a final rule in 2015. The restaurant industry isn’t completely opposed to raising the salary threshold for overtime pay, but many leaders say the president’s proposal goes too far. “We recognize it’s probably time to increase [the threshold],” says Jay Stieber, executive vice president and general counsel of Lettuce Entertain You Enterprises (LEYE). “We think the quantum leap is certainly larger than we would like to see. The consequence is the restaurant industry is going to have to reevaluate its labor model as it relates to management personnel in stores.” Stieber, who also serves on the board of the National Restaurant Association, oversees the legal and financial functions of LEYE, a Chicago-based firm that owns more than 100 restaurants across the nation. Stieber says overtime is the latest in a string of regulatory issues challenging the industry, including the Affordable Care Act, minimum wage increases, and mandatory paid sick time. He says restaurants that operate on tight margins are already pressured by increased costs of commodities, utilities, real estate taxes, and insurance. “This is a low-margin business, and these additional costs are difficult to absorb and are therefore barriers to growth and job creation,” he says. He says restaurant 132



In Context

A look at proposed salary changes in today’s socioeconomic environment $50,440 : Annual salary threshold under which most white-collar, salaried employees are eligible for overtime pay under President Obama’s proposed rule 4.7M : Estimated number of workers who could receive overtime under the proposed rule change in the first year (affected workers) 988,000 : Number of affected workers who regularly work overtime 3.3% : Affected workers as a share of total employed workforce 53% : Share of affected workers who are college graduates $2B : Total first-year costs for private employers, including direct employer costs, transfer of income from employers to workers, and deadweight loss $111.5M : Total first-year costs for state and local governments 0.04% : Private employers’ total first-year costs as a percentage of total private sector payrolls Source: US Department of Labor

owners could end up raising menu prices to accommodate the change. The current threshold of $23,660 has been raised twice in the last 40 years, and it is about $600 below the poverty threshold for a family of four. Total costs for employers is expected to be a fraction of a percent of payroll costs and revenues, according to the Department of Labor. Hence, a “full macro-economic analysis is not likely to show any measurable impact on the economy.” Supporters say the overtime proposal would boost the middle class and increase standards of living by raising workers’ earnings and helping them achieve better work-life balance. “That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve—since those who are doing right by their employees are


If Michelin rated attorneys, Jay would receive three stars.


Looking Back


A history of fair labor standards in the United States


undercut by competitors who aren’t,” Obama wrote in an op-ed for Huffington Post. “That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay.” Most restaurant workers are paid hourly and are already eligible for overtime. The proposed rule change would impact salaried managers, assistant managers, kitchen managers, chefs, and assistant chefs who earn between $23,660 and $50,440 per year, or $455 to $970 per week. All of LEYE’s salaried employees, Stieber points out, are eligible for performance-based bonus pay, which doesn’t count toward the overtime exemption threshold. Those incentive plans may change if the threshold is raised to the proposed level. The proposed rule does not amend the duties test, which is used to determine whether an employee’s primary job



The National Industrial Recovery Act is passed to spur economic growth and includes various regulatory changes, as well as the protection of workers’ rights to collective bargaining.





The Fair Labor Standards Act (FLSA) becomes law. It establishes the minimum wage, maximum workweek hours, overtime pay, and other related regulations. The Department of Labor publishes revised regulations requiring three tests for overtime exemptions: salary basis, salary level, and duties tests.













The FLSA is amended to include retail and service enterprises, and it no longer exempts people employed in “local retailing capacity” from overtime. Elementary and secondary schools are added to FLSA, while teachers and academic administrative personnel are added to the list of workers exempt from overtime. Congress passes amendments to make the equal pay provision applicable to workers who are otherwise exempt from FLSA minimum wage and overtime protections.

Laner Muchin is one of the oldest and largest law firms in the country dedicated exclusively to the representation of employers in the areas of labor and employment law, employment litigation, business immigration, and employee benefits. The firm is located in Chicago and employs forty-five lawyers. The firm prides itself on staffing cases very efficiently and being bottom line sensitive. Our attorneys are relationship builders who understand how to fit into our clients’ bigger picture. In this role, the firm seeks to resolve clients’ problems, not make a living off them. A key to the firm’s client loyalty has been its dedication to client service as exemplified by its unique Two Hour Commitment whereby the firm guarantees that every client phone call and email will be returned within two hours or less. This type of institutional commitment is unheard of in the legal profession, and no other firm we know of has ever attempted to duplicate it.

Exemptions are expanded to cover certain computer-related professions, including hourly employees who are paid at least six-and-a-half times the minimum wage. The hourly compensation threshold is capped at $27.63 per hour for computerrelated occupations. The Department of Labor raises the salary threshold for the first time since 1975.

515 North State St., #2800 Chicago, IL 60654 312-467-9800

Source: US Department of Labor




Littler congratulates

Jay Stieber of Lettuce Entertain You for his career accomplishments and contributions to the legal profession. We are proud to call you our partner in business.

duties involve executive, administrative, or professional work and are exempt from overtime. But the labor department plans to determine whether the current test is working. Stieber says he’s especially concerned that the department will change the standard. California, for example, has a more stringent test than the federal regulation that requires more than 50 percent of an employee’s time be spent performing managerial or other exempt duties in order to be ineligible for overtime. “I think the restaurant industry is unique,” he says. “To operate a restaurant, there has to be a lot of flexibility in what they do.” For example, a floor manager of a full-service fine dining restaurant could, if the restaurant is busy, be expected to greet people, clean tables, and perform other duties, in addition to managerial responsibilities. Stieber is concerned about proposed annual changes to the salary threshold. He says it’s hard to evaluate how that will impact the industry. The National Restaurant Association is evaluating the potential cost and administrative burden of the overall proposal and plans to submit comments to the Department of Labor. “While we are still reviewing the Department of Labor’s proposed overtime regulations, at first sign, it seems as if these proposed rules have the potential to radically change industry standards and negatively impact our workforce,” said Angelo Amador, the association’s senior vice president of labor and workforce policy and regulatory counsel, in a statement in June 2015. “Supporters of these regulations say they want to increase Americans’ take-home pay, but these sweeping changes to the rules could mean anything but.”


> LITTLER MENDELSON: “Jay is not only an outstanding

general counsel and key business leader for LEYE but also an industry leader. His knowledge of government relations and public policy concerns combined with his legal skills make him a true thought leader.” – Michael J. Lotito, Cochair of Littler Workplace Policy Institute




LETTUCE * CONGRATUL ATE JAY STIEBER Executive Vice President and General Counsel on his well deserved recognition by Modern Counsel.

* proudly serves as legal counsel to Lettuce Entertain You Enterprises. Cheers to its many successes.


Lettuce Entertain You Enterprises and Neal Gerber Eisenberg respect the intellectual property rights of others and expect others (although we have been surprised, see case below) to respect their intellectual property rights. No reproduction of this advertisement or use of the LETTUCE or NEAL GERBER EISENBERG marks may be made without prior written consent and may be withheld in their sole discretion. LETTUCE® LETTUCE ENTERTAIN YOU® LETTUCE ENTERTAIN YOU ENTERPRISES® LETTUCE PARTIES® LETTUCE CONSULTING GROUP® and NEAL GERBER EISENBERG® are federally registered trademarks, incontestable under 15 U.S.C. § 1065. See Registration Nos. 1,672,175, 1,603,142, 1,090,459, 1,758,977, 3,555,964, 3,120,624 and 3,154,088. The Waiter Design is a federally registered trademark. See Registration No. 4,418,644. The LETTUCE marks have been found to be a strong, distinctive family of marks. See, Lettuce Entertain You Enterprises, Inc. v. Leila Sophia AR, LLC, 703 F. Supp. 2d 777, 790 (N.D. Ill. 2010).


Brevity Is the Soul of Wit—and Good Legislation Overly complex, over-reaching regulation may be well intended, but it often negatively impacts businesses and bogs down the courts BY JEFF SILVER

American laws and statutes are extraordinarily complicated; the US tax code is a prime example. And in contemporary lawmaking, nearly every new piece of legislation is similarly complex—even those with the best of intentions. Not only can overly complex regulations introduce unexpected costs, they often unintentionally create opportunities for nuisance lawsuits that can destroy small businesses by creating financial, operational, and emotional stresses. Complex regulation can also inhibit innovation and discourage productive risk-taking even at large companies when plaintiffs troll for dubious patent infringement action. Jim Edwards, general counsel at Cubic Corporation, has seen such civil justice abuse firsthand. In one instance, a customer believed they had been overcharged by $2 and filed a federal class action lawsuit claiming fraud and other allegations. From the start, such cases cost hundreds of thousand dollars in legal fees. “Time and money that go into addressing such lawsuits are resources that aren’t available for research and development, expansion, earnings per share, productive business deals, or other highly strategic business issues,” Edwards says. He points out that because regulation— 136



or, more precisely, the degree of regulation—varies by jurisdiction, certain areas actually end up losing business opportunities and resources. “We have locations outside of California, which is a very highly regulated environment,” Edwards says. “We see huge differences in the costs of doing business in states like Texas, Georgia, and Tennessee, where regulation is more reasonable. So it’s not surprising when you see companies relocating or deciding to expand elsewhere—even to other countries, where taxation or the regulatory environment are more favorable.” Consider the Dodd-Frank Wall Street Reform and Consumer Protection Act as another well-intentioned example of complex legislation. In the wake of the recession, it made sense to enact legislation to improve accountability and transparency in the American financial system and, in the bill’s own language, “protect consumers from abusive financial services practices.” However, the very transparency that defines the act can be problematic. DoddFrank runs well longer than 800 pages, including hundreds of pages of clarifications about specific details and scenarios. Another example of well-intentioned but ultimately lengthy and convoluted

“It’s not surprising when you see companies relocating or deciding to expand elsewhere—even to other countries, where taxation or the regulatory environment are more favorable.” – JIM EDWARDS

photo: Ken Hansen


Procopio joins

policy is the Americans With Disabilities Act (ADA). Its complexity has unintentionally facilitated frivolous lawsuits. An acquaintance of Edwards ran a restaurant, and an ADA lawsuit alleged that the tables and chairs were too close together. Rather than being able to simply rearrange the furniture, he was forced to pay $5,000 to settle. At the beginning of 2015, it was discovered that just two Pennsylvania law firms and eight plaintiffs had filed 61 percent of the state’s nonemployment ADA lawsuits in an 18-month period. In California, one attorney filed more than 2,000 ADA accessibility lawsuits. Corporate attorneys like Edwards often push for arbitration, mediation, and litigation alternatives whenever possible, which can result in faster, private resolution. But smaller firms may not be able to withstand the process of getting to that point—specifically the demands of discovery, which can cost millions of dollars. This can effectively force them into unwarranted settlements with aggressive plaintiffs. “The first time a business owner becomes aware of a problem shouldn’t be when a lawsuit is filed,” Edwards says. “It should be by written notification of the problem with a reasonable time period to correct.” There have been efforts at civil justice reform that would reduce defendants’ burdens. One was the Innovation Act, which focused on regulations related to patent infringement, but it died in the US Senate after passing a House of Representatives vote in 2013. Eric Goldman, a professor at the Santa Clara University School of Law, has proposed “lawsuit-free zones” that


> PROCOPIO , CORY, HARGREAVES & SAVITCH LLP : “Jim’s broad and deep base of

experience in a wide array of legal matters make him the perfect general counsel. He is creative, practical, strategic, and effective. Jim is an altogether outstanding lawyer and leader. We applaud his tremendous efforts at Cubic and are pleased to have the opportunity to work as a part of his legal team.” – Mike Changaris, Partner

Modern Counsel

Applying Common Sense: Drafting Legislation

in applauding

Jim Edwards

for his exceptional accomplishments at

Eric Goldman’s conditions for thoughtful legislation

Cubic Corporation.

MINIMUM PREREQUISITES : Ensure all of a particular class of parties or entities receive protection without exception.

Congrats, Jim!

CONCISE LANGUAGE : Preclude unintended loopholes and gray areas. GLOBAL PREEMPTION : Eliminate all other potential causes of action, even if they overlap. SHIFTING FINANCIAL RESPONSIBILITY : Plaintiffs bear the burden of unwarranted actions that are simply fishing for settlements.








would completely eliminate litigation under certain circumstances. Such scenarios already exist through immunities for certain business models. Websites, for example, cannot be held liable for user-generated content. Safe harbor laws protect websites from copyright infringement carried out by their users. Goldman believes these zones would stop nuisance settlements and the devastating effects meritless actions have on many businesses. Goldman suggests common-sense steps for drafting legislation.  He believes simple, all-inclusive factors will facilitate much faster resolutions and limit the time and money defendants spend defending themselves. “I think these recommendations would go a very long way to improve our justice system,” Edwards agrees. “We need to be sure a fast, effective civil justice system is available to handle legitimate disputes.” Edwards adds, “When you have a malfunctioning civil justice system, new, sensible reforms and regulation are essential. As it is, overregulation makes it more difficult for businesses to be successful and simply adds to the problems.” K

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EVALUATE REGULATION Paul Matecki General Counsel Raymond James Financial

A Higher Fiduciary Standard The boomer generation is living longer than any before it and facing the cost of retirement. Financial advisors are challenged to serve this wave of investors amid increased regulation BY RUSS KLETTKE

There are enough worries for aging Americans at retirement—health concerns, the end of paychecks, and the prospect of living past their savings. Those challenges are happening on a massive scale; 10,000 people will turn 65 every day for the next 15 years. The baby boomers are redefining society once again. Economists have warned that as this retiree wave rolls in, it could affect the entire economy. One problem might be 138



a large-scale asset meltdown as boomers liquidate and spend down their investments. Given that the 65-and-older age group numbering 41 million people today will increase by 20 percent by 2030, this movement of money is no small matter. Or maybe not, says Paul Matecki, senior vice president, general counsel, and secretary of Raymond James Financial, a Tampa, Florida-based diversified financial services holding company with 6,300

financial advisors working out of 2,600 locations in the United States, Canada, and overseas. “Most retirees don’t cash out at retirement,” he says. “People are working longer, as they have not saved enough. Some of their assets transfer to the next generation, as not everyone lives to their 90s.” What’s more worrisome, perhaps, is the number of boomers who have few assets to liquidate. Boomers’ parents, the

photo: Raymond James Financial


Depression-bred “Greatest Generation,” were famously frugal and trusted in the pension funds of their longtime employers to ensure their financial security into their twilight years. Most often, that worked. But a generational shift several decades ago began as those company pensions started to disappear, replaced with self-directed 401(k) plans. Offered the opportunity to save, manage, and grow tax-deferred income that could amount to more than what a pension plan might have given them, some boomers did well. But others did not or could not. A study by the Employee Benefit Research Institute found that 56.7 percent of early boomer households are “ready” for retirement, with the balance having shortfalls of $93,576 for single men and $104,821 for single women. In family units, it is $71,299 per family member. Approximately four in ten boomers have no retirement savings at all. Exacerbating this problem, many boomers borrowed the equity in their homes, leaving them today with diminished real estate value, as well. Some near-retirement boomers are attempting to catch up. But given their life stage, they are advised to invest more conservatively in lower-risk, lower-return investments. Their better-cushioned peers who have adequate savings aren’t necessarily comfortable either since increased longevity means those nest eggs might have to last 30 years or longer. Financial advisors from companies like Raymond James do their best to work with private investors of all sizes, and as should be clear, those investors come from a spectrum of needs and resources. “There are a plethora of investment opportunities,” offers Matecki. “With more products and the fact that boomers are more sophisticated about investing, there are many things we can do to help people with planning and savings.” Historically, some financial products and sales methods have proven harmful to savers. The financial services industry



Traurig offers heartfelt congratulations to Paul Matecki on his feature in Modern Counsel. This is a well-deserved honor for his outstanding leadership and accomplishments.

has had some “bad apples,” which government regulators continue to curb with new guidelines for broker dealers. The Securities and Exchange Commission (SEC), together with the Financial Industry Regulatory Authority, issued a National Senior Investor Initiative report in April 2015 to address how financial advisors work with this somewhat vulnerable population. Bearing the weight of so many people with savings that need protection, heightened scrutiny on the industry may be warranted. The Department of Labor, which concerns itself with retirement funds, has sounded the alarm about poor broker practices relative to 401(k) rollovers and other savings programs. Of course the rules apply across the board for this industry. The “good apples” make up the vast majority of the industry, says Matecki, and they understand a general need for heightened regulation. “We are handling individuals’ life savings,” he notes. “This is more important than buying a home, where regulation has also increased.” As proposed, the guidelines establish stricter standards for brokers and financial advisors who work with retirement account investments. Intended to protect savers, it is widely seen as placing limits on how and to what extent brokers can be paid for their advice and services. The intent is to require that all investment recommendations be in the best interests of the investor—known as the “fiduciary standard;” critics say current regulations allow for unwarranted higher fees. Mary Jo White, chair of the Securities and Exchange Commission, has gone on record supporting a uniform fiduciary standard that would apply to brokers as well as investment advisors (the two are distinguished from each other in that brokers can execute trades, while an advisor provides comprehensive planning services, including investment management and estate planning). She cites calculations from the Council of Economic Advisers that show what happens when middle-class families roll over their 401(k) dollars into individual retirement accounts, typically when leaving a job or retiring: they effectively lose the protections of federal pension laws. The consequences are that those families lose about 1 percent in annual returns on their savings, which adds up to $17 billion in losses to all such investors every year.

SIDLEY would like to thank

PAUL MATECKI Senior Vice President and General Counsel Raymond James Financial For sharing his talents with our firm WE ARE GRATEFUL TO HAVE PARTNERED WITH PAUL ON MANY IMPORTANT MATTERS.


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But it’s a complicated scenario, explains Matecki, particularly because the proposed rules can be read to say the cheapest is the best for a client. These are investments that impact middle-class families in life-altering ways. “Our industry is concerned that, in some cases, what’s in the best interest of the client may not be the lowest-cost option,” he says. “Commissions charged on stocks and bonds are fairly clear. Mutual funds involve fees to multiple parties, such that who receives money is opaque. And sometimes investments that cost a bit more up-front may be in the client’s best interest.” Another concern is for smaller investors: boomers who were unable or unwilling to join investment programs earlier in their careers (e.g., the 55-yearold hoping to open a mutual fund account with $1,000, the minimum contribution). Under new regulations, it may become too expensive to service these limited-asset customers. Matecki says one option is to instead charge clients consultation fees, but it’s not hard to imagine that such up-front charges would dissuade people from seeking counsel altogether. The scenario would be a doubly vexing problem as the investor ages and, very often, experiences cognitive decline. Stories of elder abuse, conflicting wills, and quarreling heirs are the stuff of celebrity families as well as the average investor. Battles are over money, and the financial advisor can sometimes forestall the fight. “We recommend obtaining client authorization to reach out to other family members if the unfortunate event of dementia or other debilitating illness strikes,” explains Matecki. “We have to ask the what-if questions and sometimes address difficult situations.” Embedded in these situations are privacy questions and occasions in which it appears a relative or caretaker is taking advantage of a client with Alzheimer’s disease or another debilitating chronic illness. On the flip side, aging healthily is more likely than ever before. While this is, overall, good news, running out of money can keep an otherwise sprightly nonagenarian off the golf course, from which much of that vitality might derive. One way to address this phenomenon of the long-lived retiree is the longevity annuity.


Annuities come in various forms— fixed, variable, equity index—with different tax and payout implications, all of which enable annuitants to choose a product that offers the best return relative to their life variables: how long they expect to live, when they wish to start drawing income from the annuity, and whether or not it can be passed on to a surviving spouse. How realistic are people about their chances for living longer? Family histories help, as does the absence of preexisting illnesses and conditions. Some annuitants purchase them with a rollover lump sum, and others pay a premium over time. A financial advisor necessarily needs to factor for inflation, which specific annuities make sense given the taxable status of the source funds (the tax-deferred rollover), and whether or not clients are being realistic about their anticipated lifespans. “These can make sense in an era of better health,” says Matecki. “But they still need to meet the standards of suitability.” The next generations have their own financial challenges ahead, given their high tuition debt and difficulties getting home mortgages. But data show they are less inclined to take on additional debt and are adept at using digital tools to manage finances. Reportedly, this comes from observing their parents’ struggles. How the new regulations will affect these many life-stage and family factors remains to be seen. It would be unfortunate if smaller-asset investors were deprived of nuanced, in-depth counsel.

1 8 0 0 A T T O R N E Y S | 3 7 L O C A T I O N S W O R L D W I D E˚

Committed to Client Service Greenberg Traurig congratulates Paul Matecki on his recognition in Modern Counsel magazine and on his longstanding contributions to the legal profession and his community. At Greenberg Traurig, we pride ourselves on our ability to provide in-house counsel in the financial services industry with the hands-on support and resources that are essential ingredients to success.


> SIDLEY AUSTIN LLP: “Paul’s insightful

approach and focus on the big picture serve Raymond James well in the current regulatory environment. As financial institutions face greater challenges and complexity, he exemplifies the leadership and vision needed to navigate successfully.” – Neal Sullivan, Partner and Coleader of the Securities, Derivatives Regulatory and Enforcement Practice

GREENBERG TRAURIG, LLP | ATTORNEYS AT LAW | WWW.GTLAW.COM Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2015 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. Contact: George D. Sullivan in New York at 212.801.6541. °These numbers are subject to fluctuation. 25524




Distilled Over Generations Corporate governance is a little different in publicly listed, family-owned companies. Brown-Forman’s mix of several generations in a distilled-spirits business makes an interesting cocktail for GC Matt Hamel BY RUSS KLETTKE

According to Technomic, a food and beverage consumption research organization, American whiskey is among “the most vibrant spirits categories right now.” It’s favored by millennials (aged 21-34), who are a target market for drink companies. That’s good news for Brown-Forman Corporation, a 145-year-old company that produces the iconic Jack Daniel’s, the best-selling American whiskey in the world. Brown-Forman has distilled the spirit since acquiring it in 1956, but the company was founded in 1870 on the strength of the revered Old Forester brand. Such is the legacy, and long-game approach, of this company. Just as it takes years for whiskey to age according to exacting methods, BrownForman refines itself over time. At the center of the modern Brown-Forman is the fifth generation of the Brown family, several of whom are active in the publicly traded company’s governance structure. That a family can remain a driving force of a company this old is remarkable, but it’s no accident. Matt Hamel, the firm’s executive vice president, general counsel, and secretary, 142



says it is a result of a multigenerational strategy. “[Leadership] is extremely thoughtful about succession planning,” says Hamel, pointing out that five fifth-generation Browns sit on the company’s 13-member board of directors. “They say, ‘good governance is your best cousin.’” Hamel is clear this is not a family enterprise that rewards lucky scions with cushy positions. The company strongly encourages hands-on involvement by descendants of founder George Garvin Brown, whose sealed glass bottles were innovative in 1870, when whiskey was sold in barrels. To get even an entry-level job today, the Brown family requires that a family member have a bachelor’s and second degree, plus three years of experience at another company. Eleven family members currently work at Brown-Forman, which has 4,400 employees and sells in 160 countries. For Hamel, this scenario offers both challenges and advantages. “Governance rules are designed to ensure the interests of management are aligned with shareholders,” he says. “Misalignment leads

Regulations in Spirit A look at the laws and regulations applied to the spirits industry Students of accounting learn early the principle of “FIFO,” the first-in, first-out cost layering method that values the cost of goods and ending inventory. But a product that is distilled and then aged for up to seven years needs “LIFO,” the last-in, first-out method. It takes good regulatory and lobbying work to convince tax-collecting bodies at the state and federal levels that LIFO is a fairer method to apply to a company such as Brown-Forman. And that’s only the beginning of regulatory and legal standards that govern the distiller. “After the repeal of Prohibition, regulation of beverage alcohol was delegated to the states,” says Hamel, who oversees the compliance function. This includes the patchwork of restrictions on where alcohol is sold and how it is marketed. Overseas, Brown-Forman needs to know how people and products are depicted in advertising—if and where advertising and promotion is permitted in the first place.

to agency costs,” such as nonstrategic pet projects or unreasonable perks. “Family control reduces agency costs because major shareholders sit on the board. Independent directors can turn to their left and right, look those shareholders in the eye, and ask them what they think.” At the same time, Hamel says, the multigenerational time horizon of the controlling Brown family means they have a rare patience. “It takes at least four years to make a bottle of whiskey,” he says, “and, in some cases, much longer. Family members tend to have a long-term perspective.” Family engagement goes beyond the board and employment ranks. A committee composed of representatives of the more than 100 family members and senior management meets four to five times each year to discuss the industry, as well as company performance, risk factors, and executive compensation matters, among other relevant issues. “This is about the intersection of family and company,” says Hamel. “It also has the effect of averting apprehension about self-dealing and favoritism by providing the family with transparency into how management decisions get made.” He adds that the meetings provide a training ground for family members considering applying for a board position. These special circumstances are rare at other publicly listed, family-controlled companies, so Hamel thought it might be a good idea to gather other top lawyers in analogous companies to discuss common issues. He contacted general counsel at 130 such firms five years ago. Now, about 50 attorneys share thoughts and ideas periodically by e-mail, and semiannual meetings bring approximately 30 of them together in-person. They have much to talk photo: Brown-Forman


about, including governance issues, the treatment of family employees, rules on charitable donations, application of the Hart-Scott-Rodino rules to controlling family shareholders, the role of independent directors on a controlled board, and issues that arise from dual class stock. Despite the long-standing nature of this company and its industry, BrownForman has to adapt to changing markets: millennials have become a more diverse and larger cohort than baby boomers. New ways of managing and conducting business are crucial. For example, embracing diversity a decade ago has played into Brown-Forman’s success in the current popularity of American whiskeys. “Fifty years ago, this was about white, Southern men selling whiskey to white, Southern men,” notes Hamel. “We are now all over the world and have learned to hire from a much bigger pool of talent, both out there and here, at our head office. But we also look beyond demographics. We need different points of view: people from different geographic regions and socioeconomic groups. When we take a wide range of views into account, we get much better ideas and solutions.” That includes the perspectives of nondrinkers, for whom an affinity group was formed at Brown-Forman and found its executive sponsor in Hamel. “As with our LGBT group, [being a nondrinker] is a personal characteristic that isn’t visible, and, in fact, there was an element of closetedness among our nondrinkers. The perception was that it might hurt your career. But our CEO has made clear that overconsumption would be much more damaging to your career than nonconsumption.” Indeed, there are myriad laws and regulations that impact the company and its industry. For a company with this history—including the 13-year Prohibition era, when it was restricted to the “medicinal” market—BrownForman has proven to be a preferred employer that is also an integral part of the social fabric of Louisville, Kentucky, where it is based. “Family control creates a very strong, positive business culture,” Hamel says. “The average 14-year tenure of employees shows that people love to work here. We have fun doing what we do.”

GOOD COUNSEL FROM OUR FOUNDER Our founder Mr. Jack Daniel left us with precious few words. But the few he did leave us reside in a place of honor at our distillery. Helping us stay true to Jack’s guiding words as a company is the work of Mr. Matt Hamel, our chief counsel, and the good folks who work beside him. Here’s to Matt, because the best counsel inspires our best spirit.

J A C K D A N I E L’ S


We hope you’ll savor these words and our whiskey slowly and with care. Please drink responsibly. ©2015 Jack Daniel’s. All rights reserved. JACK DANIEL’S and OLD NO. 7 are registered trademarks. Tennessee Whiskey, 45% alc by vol., Jack Daniel Distillery, Lynchburg TN.




Urban Core





Few industries have faced calamity and scrutiny as has banking in the twenty-first century. Acts of Congress have curbed the work of financial institutions, but compliance doesn’t mean giving up on big ideas. One large player, Citigroup, is turning around its controls as well as its place at the center of urban progress. BY RUSS KLETTKE


isit Manhattan, and there’s a good chance you’ll see a bicycle—probably, many bicycles—bearing the CitiBike logo. It is an adaptation of the Citigroup identity, so named because the global, Big Apple-based bank spent $41 million to be the lead sponsor of the program. And while that may appear to be clever marketing, Citigroup’s executive vice president of global public affairs, Ed Skyler, positions the CitiBike program as part of something bigger. He explains it’s about the future of cities—both in the United States and internationally—and the vital role that banks play in ensuring a smoother transition into a much more urban future. “One hundred million people are moving to cities every year, and nearly 70 percent of the world’s population is expected to be urban by 2050,” said Skyler at a “Cities for Tomorrow” conference sponsored by the New York Times in July 2015. “The top 100 cities in the world will generate 35 percent of global economic growth over the next 10 years. Massive population and economic shifts are impacting cities.” CitiBikes were used for 15 million trips in the first 18 months of operations, and the program continues to expand. Pretty heady stuff, considering the

infrastructure necessary to support that kind of growth. And also a bit concerning—given the nature of the global economy, the recent financial crisis, and the significant criticisms of the banking industry and resultant regulatory changes that have followed. Indeed, banks have taken their lumps for all that happened before and after the 2008 economic plunge. And while politicians and pundits debate what has, can, and should be done to protect consumers, business, and the stability and strength of the economy, sweeping changes have altered the financial-services landscape. So what is the role of financial institutions like Citigroup? How confident can we be that they can effectively serve the needs of society, of municipalities and national governments, of shareholders, homeowners, depositors, and borrowers? Skyler puts much of it in context. Banks are the lifeblood of where people live, and they can play a very large role in how they live. He claims the very future of civilization is closely tied to the strength of a short list of urban components, including financial institutions. “There are key factors that make a city competitive, such as the strength of its government institutions, infrastructure, financial maturity, human capital, and cultural institutions,” he says. Cities, he suggests, JAN/FEB/MAR 2016



must embrace risk-taking in order to innovate, and this presents an opportunity for the private sector. “Public-private partnerships have accomplished many great things,” continues Skyler, “but to me, the real value of private-sector involvement is not measured in the amount of dollars. It’s about having the flexibility and freedom to try new ideas.” Those new ideas are birthed in many places, financial institutions and regulatory agencies among them. Dodd-Frank: the Era of Increased Oversight It’s an easy assumption that increased regulation can hamper flexibility and freedom. Skyler didn’t say that in his speech; he was actually referring to the nature of risk-taking—how cities and other government entities are restricted in how much risk they can take. Instead, private-public partnerships are what bring programs such as CitiBike and other, much more expensive, infrastructure projects to fruition. But such regulation is indeed part of how Citigroup and other banks must go about their business. The history of banking has seen an ebb and flow of what financial institutions can and cannot do, per the will of our elected officials. The laws that are enacted very often have to do with the difficult situations that preceded them. When things go awry, the human reaction is to curb what may be at the root of the problem. The aftermath of the 2008 financial crisis was no exception. The enactment of Dodd-Frank, the Wall Street Reform and Consumer Protection Act of 2010, is the centerpiece of how America reacted. It was the most significant change in financial regulation in the United States since the Great Depression (which itself begot the Glass-Steagall Act). Dodd-Frank contains no fewer than 243 new rules that are intended to improve accountability and transparency of the financial system. And it created a number of new regulatory agencies, including the Financial Stability Oversight Council, the Office of Financial Research, and the Bureau of Consumer 146



Risks still need to be taken, even under the rules and dictates of legislation that has adopted a very wary view of financial institutions. Financial Protection. Additional powers in the bill were granted to existing oversight bodies, including the Federal Deposit Insurance Corporation, the Securities and Exchange Commission (SEC), and others. One new rule in Dodd-Frank, which took effect in July 2015, after a five-year stall, restricts some large US banks from making risky, speculative bets by way of proprietary trading—i.e. using funds from their own accounts to engage in hedging that places bank customers at risk. Called the Volcker Rule (named after former Federal Reserve chairman Paul Volcker), it was largely anticipated by Citigroup and others such that they were already in compliance when it finally became effective. Perhaps this is because attorneys and other compliance staff are in abundant supply at banks. Among its 244,000 employees, Citigroup has almost 30,000 regulatory and compliance staff, about 13 percent of the firm’s entire workforce. This is up since 2008. And it addresses the need for greater scrutiny and conservatism with regard to financial risk-taking. But does this level of caution, this reduction in risk, amount to good things in the end? It may depend on how much we need the banks to do what banks do, coupled with the regulatory environment that is now in place. Laying Blame Without question there was a multiplicity of factors that fostered the financial crisis and led to the economic recession. The

story of how it transpired, who was at fault, and what could have been done differently is a tale abundant with characters. There were the subprime lenders who allowed new homeowners to borrow in larger loan-to-value (LTV) ratios than ever before. In 1994, the median LTV was 1.65 when the median loan after adjusting for inflation was $120,000 and the median income of borrowers was $73,000. By 2005, median loans grew to $183,000 against roughly the same level of income as in 1994, resulting in an LTV of 2.46. What was perceived as enabling more people to become homeowners was in fact building a significant debt bomb of underqualified, at-risk mortgage holders. Others posit that the homeowners themselves bit off more than they could chew. Senator Elizabeth Warren’s book, The Two-Income Trap, Why Middle-Class Parents are Going Broke, posits that when both spouses work they tend to buy homes that are affordable on the combination of their incomes—leaving them quite vulnerable if either were to become unemployed. Warren argues that home prices just before the housing bubble burst were out of whack from an earlier generation; but it bears noting the size of homes, the number of bedrooms and bathrooms, and features of kitchens and bathrooms increased significantly in recent decades. The average American home in 1980 was about 1,700 square feet, but by 2010 it was closer to 2,400 square feet. Was it homebuyers’ fault they were loaned enough


money to buy McMansions, which they subsequently lost in the recession years? These so-called subprime loans were largely originated by finance companies outside the banks. Most of the larger banks, Citigroup included, did little business in selling or securitizing these loans themselves, instead being involved in that business through the acquisition of subprime lenders. Arguably, owning companies in subprime lending was the mistake Citi made while growing into a global banking empire since the beginning of the twenty-first century. Or did the government-sponsored Freddie Mac and Fannie Mae secondary mortgage companies encourage all of this to happen? With such an increased volume of loans in the early 2000s, as well as the number and opacity of mortgage originators, underwriting standards suffered. Going back further, to 1999, a series of changes brought about by the GrahamLeach-Bliley Act (also known as the Financial Modernization Act of 1999) removed barriers that separated investment firms from commercial banking and insurance brokerage. Citigroup’s 1998 merger with Travelers Insurance tested the limits on this rule, and Congress’s passing of Graham-Leach-Bliley, signed by President Bill Clinton, effectively endorsed Citigroup’s move. But while this is called “the repeal of Glass-Steagall,” the 1933 act, which separated commercial and investment banks, had been eroding almost since its inception. Even Senator Glass sought to change a rule regarding banks underwriting corporate debt as early as 1935, with many other legislative challenges and rule changes in the decades that followed.

The Bailout, Paybacks, Judgments, and Settlements What unfolded in late September and early October of 2008 is, of course, historic and continues to be the subject of much debate. The Troubled Asset Relief Program (TARP), signed into law just two weeks after the failure of Lehman Brothers, halted what many considered to be a death spiral for financial institutions. There was the equivalent of a bank run on money market funds, where $144.5 billion in withdrawals happened in one week (the prior week withdrawals were only $7.1 billion). Corporations were unable to roll over their short-term debt. An indicator of perceived credit risk in the economy known as the TED spread (the difference between the interest rates on interbank loans and on short-term US government debt) reached record levels by mid-October. TARP promoted financial market stability. It collateralized difficult-to-value assets such as debt obligations, and it encouraged banks to resume lending and effectively bolster the overall economy. Of $467 billion allotted under TARP, $427.1 billion was disbursed, and as of 2015, proceeds to the US Treasury from the banks came to $441.8 billion, a net gain of $14.1 billion. Aside from government loans, there were charges levied by the US Justice Department—working under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA)—against banks that included Citigroup. The charges cited federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale, and issuance of residential mortgage-backed

Compliance officers on Wall Street are the new power brokers who arguably eclipse the influence of traders and investment bankers.

securities in the lead up to the meltdown. Citigroup paid out $7 billion ($4.5 billion of which is being paid to settle Justice Department claims under FIRREA, $208.25 million to the Federal Deposit Insurance Corporation, and multimillion-dollar claims of varying amounts have been made to the states of California, Delaware, Illinois, Massachusetts, and New York). Relief to aid consumers harmed by the crisis (and tied specifically to Citigroup) will be funded by $2.5 billion in the settlement. This includes loan modifications to homeowners whose properties are underwater, refinancing for distressed borrowers, down payment closing costs for qualified home-buyers, and donations to community organizations that work in redevelopment and affordable rental housing for low-income families in high-cost areas. The legal scenario for bank executives in the aftermath remains uncertain. The Justice Department issued a public statement in 2014 that said, “the agreement does not release individuals from civil charges, nor does it release Citigroup or any individuals from potential criminal prosecution.” The bank agreed to fully cooperate in any investigations related to the conduct covered by the agreement. What is noteworthy is that the SEC concluded two key cases in 2015 against executives at Freddie Mac and Ernst & Young (for its role as auditor for Lehman Brothers) with a muddled resolution that found no actual wrongdoing on the part of individuals who were centrally involved in the 2008 crisis. Compliance in the Aftermath Dodd-Frank and the post-2008-crisis era have chastened financial institutions, even while the industry remains a popular kicking post for those who proclaim the banks remain “too big to fail.” “There’s a huge demand for infrastructure in the world’s cities,” Skyler said in his speech to the “Cities for Tomorrow” symposium. “The need has been estimated at $57 trillion over the next 15 years.” Included in that infrastructure is the renovation JAN/FEB/MAR 2016



of LaGuardia Airport, announced mid2015 and expected to cost $4 billion. The bank is also committed to lend, invest, and facilitate $100 billion to reduce the impacts of climate change and to finance sustainable growth. Those kinds of investments—not philanthropy, Skyler is quick to clarify— require deep pockets. And to win work in the private-public sector, at a minimum, the bank has to be compliant with laws, rules, and regulations that have arisen to correct the mistakes of the past. The requirements of the Bank Secrecy Act (BSA) and the Patriot Act make that no small task. Congress enacted the BSA in 1970 as a means to fight money laundering. It’s the law that kicks in, for example, when both cash-in and cash-out transactions in currency total $10,000 or more on the same day by, or on behalf of, one person. It applies to banks, savings and loans institutions, credit unions, and all other financial institutions and money-services businesses. Initially designed to limit the activities of illegal-drug kingpins, it also found utility in detecting and restraining operatives in international terrorism. The law also identified former US House Speaker Dennis Hastert in an alleged hush-money scandal in 2015. Citigroup’s Mexican subsidiary (Banamex USA) was charged with allegedly lax compliance controls in 2012. The bank was accused of lacking appropriate internal controls on legal, compliance, and reputational risks related to money laundering (a particular concern for remote and international deposit operations). The bank responded vigorously, providing a written report on the standards and structure that underpins its compliance program. This includes documentation of its training of staff, investigations, and compliance-monitoring standards. The bank also provides lists of staff in charge of compliance-related functions in different business units, as well as how they are coordinated across different subsidiaries. Compliance efforts by Citigroup and all other financial institutions and corporations were already ramped up almost a 148



How confident can we be that [financial institutions] can effectively serve the needs of society, of municipalities and national governments, of shareholders, homeowners, depositors, and borrowers? decade earlier in the wake of the Enron and WorldCom debacles. Those events provided impetus to the enactment of the Sarbanes-Oxley Act of 2002, which added new layers of rules and guidelines to corporations. Financial institutions such as Citigroup, however, were less affected by the act because its underpinnings were modeled after the Federal Deposit Insurance Corporation Improvement Act, adhered to by banks since the 1990s following the savings and loan crisis of the 1980s. Clearly, bank compliance doesn’t only serve economic interests but also those of law enforcement. Industry observers working for Thomson Reuters wrote in 2013 that compliance officers on Wall Street are the new power brokers who arguably eclipse the influence of traders and investment bankers. Reporters Aruna Viswanatha and Brett Wolf wrote, “the



LLP : “Elaine Mandelbaum is a skilled lawyer

and an exemplary leader with whom we have worked and learned from on a number of enforcement and litigation matters. Cleary Gottlieb deeply values our longstanding, collaborative relationship with Citi and Elaine.” – Lev L. Dassin, Partner

demand for compliance expertise exceeds the pool of qualified professionals, forcing banks to poach from each other—sometimes by offering to double salaries and other perks like flexible work schedules.” The writers continue with an example of a new compliance director, who after interviewing with “a very big bank” was offered a salary of $1 million—which the candidate rejected. While that may seem like a hefty salary for what was once a secondary function, the economics are understandable. With increased government enforcement of anti-money-laundering provisions of the Patriot Act, fines levied against the banking industry rose from $26.6 million in 2011 to $3.5 billion a year later ($1.9 billion of that came from the Mexican unit of UK-based HSBC, which was found to have handled millions of dollars of drug money). Who fills these now-well-compensated compliance positions? Lawyers from top schools, say the Thomson Reuters columnists. “There are no specialized degrees required for compliance officials who were typically repurposed from other divisions of a bank,” they write. “But as demand picked up, candidates with degrees from reputable law schools started moving into the field, recruiters say.” Starting salaries might be between $65,000 and $85,000, with $150,000 salaries common after five

We are honored to work with

Elaine Mandelbaum and grateful for the trust Citi has placed in us over the years.

Paul, Weiss is a firm of more than 800 lawyers with diverse backgrounds, personalities, ideas and interests who collaboratively provide innovative solutions to our clients’ most critical and complex legal and business challenges. We represent some of the largest publicly and privately held corporations and financial institutions in the world as well as clients in need of pro bono assistance.

















is proud to work with

Citigroup and we congratulate

Elaine Mandelbaum Managing Director and General Counsel of Litigation and Regulatory Enforcement

on her outstanding accomplishments.




















to ten years experience—on up to seven figures for top professionals. Compliance positions with hedge funds are said to scale even higher. With smaller banks, the opposite is the case as the most talented compliance professionals leave them for higher-paying positions. John Gerspach, Citigroup’s chief financial officer, spoke at an institutional investors conference in early 2015, lauding the benefits of its own beefed-up compliance function. “Today, we operate global risk, finance, and compliance functions with common standards and systems, consolidating disparate functions from our businesses and regions and establishing a disciplined firm-wide, risk-appetite framework,” he told colleagues. “At the same time, we have further invested in our regulatory and compliance staff, with these control functions nearly doubling since 2008. Improved information systems, reporting, and risk management have served us well in recent years, as we successfully navigated events, such as the sovereign debt crisis in Europe and Arab Spring as examples, and as we manage today through the impact of geopolitical risks and the recent declines in energy prices on our businesses.” If earnings reports are any indication, the bank’s efforts seem to be working. Citigroup’s 2015 midyear adjusted net income exceeded expectations ($4.7 billion versus $4.1 billion) and earnings per share in the second quarter followed a very profitable first quarter ($1.45 versus the $1.34 predicted by analysts), boosting the stock price when announced in July 2015. Gerspach told the Financial Times, “I never want to predict future performance … but we are committed to hitting our targets. We are certainly well on our way.” An industry analyst put it more strongly, describing Citi’s results as the “biggest and most noteworthy turnaround story in banking.” Which gets us back to CitiBikes and what Ed Skyler says about the relationship between banks and the development of future-looking cities. Risks still need to be taken, even under the rules and dictates of legislation that has adopted a very wary view of financial institutions.

“In the private sector, risk-taking and innovation is expected by the public,” Skyler says. “But government is rarely a leader when it comes to experimentation and trying new ideas. The scrutiny on tax dollars makes governments reluctant to take risks. But that doesn’t mean this is how it has to be. Risk-taking by cities needs to be catalyzed, not constrained.” In other words, the broad-based changes of such things as infrastructure, global trade, sustainable building, and innovative companies each happen because investors identified a tolerable level of risk. Those investors, individuals as well as companies and institutions, are assured that the enterprise is honest and adherent to laws and regulations that serve important social and economic needs. Skyler emphasizes these points relative to the needs and opportunities in the mass trending toward increased urban populations. Affordable housing and energy efficiency will make new mega-cities more livable. “In the U.S., aside from being the leading lender for affordable housing, we’re helping households become more energy-efficient by providing low-cost loans for energy improvements such as installing more efficient boilers and smart thermostats,” he says. Because in the end, all that compliance, all the risk management, and certainly the resurgent profitability of Citigroup does boil down to how it affects people where they live. If that includes providing homes for low-income individuals and ensuring they can responsibly manage their utility costs—and maybe ride a CitiBike to work—then so be it. That’s what well-managed banks make happen.



encyclopedic knowledge of and vast experience with the issues confronting the financial services industry. She uses both to make principled, practical (and often tough) decisions. She is a great leader, a great lawyer, and a greater person.

Davis Polk congratulates Elaine Mandelbaum for her exceptional leadership as General Counsel of Litigation and Regulatory Enforcement at Citigroup.

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Š 2014 Davis Polk & Wardwell llp


“There are many coming behind me who need the way paved. I have to do what I do for those people who will follow.” – DESIREE





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ADAM ABERRA (p62) Deputy General Counsel Five Guys Enterprises

Aberra studied political science and law at the University of North Carolina at Chapel Hill and UNC’s law school in Raleigh. He started as a corporate finance associate at Moore & Van Allen in Charlotte before joining DLA Piper in Washington, DC. He was brought in-house to Five Guys in 2008 and serves as lead transactions counsel on several matters, including franchise and international legal issues.


Vice President, Global Litigation and Asset Protection Applied Materials

Adams was a criminal prosecutor in the Santa Clara District Attorney’s Office before joining Orrick, Herrington & Sutcliffe in 2000. He focused on intellectual property and litigation and gained experience in trade secret investigation. He went in-house at Applied Materials in 2004.


General Counsel Pandora

Bene came to Pandora after serving as general counsel at Electronic Arts, a video game developer headquartered in California. Previous positions with Fenwick and West and Bain & Company working on financing transactions, M&A, licensing transactions, and analysis of business issues prepared him for a career in creatively focused companies. Bene is an alumnus of Rice University and Stanford University Law School.




MICHAEL BOXER (p104) Executive Vice President and Group General Counsel Luxottica Group SpA

Boxer joined Luxottica in 1993. He was named general counsel for its North America division in 2005. His current title, which he assumed in 2011, places all legal and international corporate affairs for the company and its subsidiaries as his charge. Prior to going in-house, he was a corporate attorney with Winston & Strawn. He is an alumnus of Columbia University and New York University School of Law.

MICHAEL BRAMNICK (p127) Senior Vice President and Chief Compliance Officer NRG Energy

Before managing compliance at NRG, Bramnick worked in-house for Envirosource, Lucent Technologies, Millennium Chemicals, and as head of ethics and compliance for LRN, an advisory firm. He is an alumnus of George Washington University and earned his law degree at Pennsylvania State University.


Senior Vice President, General Counsel, and Corporate Secretary LKQ Corporation

Victor Casini became general counsel of Flynn Enterprises, Inc. in 1992. The venture capital hedging and consulting firm formed LKQ Corporation, and Casini has been an executive officer at the alternative vehicle parts company since 1998. Previously, he served as GC of Discovery Zone, Inc. and practiced corporate and securities law with Bell, Boyd & Lloyd LLP (now known as K&L Gates LLP) in Chicago. He is an alumnus of the Northwestern University School of Law and University of Illinois at Urbana-Champaign, where he earned a finance degree.

WHAT IS ONE NONLEGAL SKILL THAT IN-HOUSE COUNSEL SHOULD HAVE? “Accounting and finance are critical. There are continuing legal education programs, but they are not really enough. It would be very helpful to have an undergraduate degree in these areas or an executive MBA program under your belt.”




WITH CHRISTINE DEBIASE MODERN COUNSEL : What does PowerPlay do and why does it resonate so strongly with you? CHRISTINE DEBIASE : PowerPlay empowers more than 1,500 young girls in New York City through sports. We teach life lessons about self-esteem, self-confidence, healthy living, and, recently, financial acumen. I grew up playing sports in Brooklyn in the late ’70s, and there weren’t a lot of opportunities for girls athletics. When I think about what I had to do to find places to play and grow in sports—and how important that growth was for me in all of the different aspects of my life—I realize that every girl should have that opportunity. MC : Why girls, in particular, and why team sports?

“When people see you being authentic, they feel safe.”

CD : The aspect of team sports that encourages girls to rely on one another instead of being critical of one another is essential— especially given how girls and women are portrayed in today’s media. We’ve been able to bring in real female role models through a diverse corporate board and really great partners. There’s so much more to it than just sports. It’s a terrific organization.



Senior Vice President and Associate General Counsel MetLife

DeBiase joined MetLife as a litigation attorney in 1996. Prior to becoming the firm’s corporate secretary in 2010, DeBiase was the associate general counsel responsible for various federal and state regulatory matters. She serves on the advisory committee for the firm’s LGBT organization. DeBiase also serves as vice president and director for PowerPlay NYC, a nonprofit committed to educating and empowering girls through sports. WHAT IS ONE NONLEGAL SKILL INHOUSE COUNSEL SHOULD HAVE? “A good sense of humor. If you can’t laugh in this line of work, then you should be doing something different. If you’re not laughing, you’re not living.”

photo: Rick Lash Photography

BARRON DOWLING (p68) Associate General Counsel Tesoro

Dowling joined Tesoro in 1998 after working as outside counsel on exploration and production operations and related litigation. He is an alumnus of the University of Houston and St. Mary’s University, where he earned his law degree.

JIM EDWARDS (p136) Senior Vice President, General Counsel, and Corporate Secretary Cubic Corporation Edwards has worked in a variety of technology positions as in-house counsel. He has worked for both government and commercial organizations, including Getty Oil Co., Logicon Inc., Kratos Defense, Qualcomm Inc., and General Atomics. He studied law at the University of San Diego.

STEVE FABRIZIO (p112) Senior Executive Vice President and Global General Counsel Motion Picture Association of America A graduate of Georgetown Law School, Steve Fabrizio began his career as an associate at Cravath Swaine & Moore, where he spent four years before joining Proskauer Rose in Washington, DC. After another four years there, he decided to pursue an in-house career and joined the Recording Industry Association of America, where he was part of the legal team that won the landmark case A&M Records Inc. v. Napster on behalf of the music industry. From 2003 to 2013, he served as cochair of the content, media, and entertainment practice at Jenner & Block. He assumed his current role at the MPAA in December 2013.




“We were very focused on having approachable, accessible litigators and not doomsdayers and naysayers.” – RICHARD FIORE

MARY FULLER (p59) Managing Director and Associate General Counsel, IP Maxim Integrated Products Fuller’s education started in electronics, moved to electrical engineering, and then to law. Her experiences as both an electrical engineer and a patent lawyer prepared her for her leadership role at Maxim. Outside of work, Fuller enjoys cycling, gardening, bee keeping, and other outdoor activities. GIVING BACK Fuller works with the Ronald McDonald House at Stanford. Families who visit the Ronald McDonald House have at least one severely ill child being treated at the hospital, and they are trying to maintain a sense of normalcy. Fuller participates by cooking and serving meals to help families cope during extremely trying times. As active donors and volunteers, both Fuller and her husband, Stanford professor Dr. Gerald G. Fuller, are invested in this organization. “I’m honored to be a part of it to help in this small way,” she says.



Fiore made partner at Freeborn & Peters LLP just before coming to United Airlines as senior counsel in 2005. Since his arrival, he has helped the airline develop a proactive, preventative legal team. He assumed his current title in 2012. Fiore is an alumnus of the University of Illinois.

Extensive first-chair trial experience in catastrophic injury and complex commercial cases, coupled with a Freakonomics-style business approach to litigation management made Freeman perfectly suited to spearhead Walgreens’s early case assessment initiative. His customer-focused approach to the practice of law has significantly reduced costs and positively impacted the lives of patients. An alumnus of Marquette University, he earned his law degree at the Illinois Institute of Technology.

Associate General Counsel – Litigation and Intellectual Property United Airlines





Divisional Vice President and Assistant General Counsel Walgreens

Vice President and General Counsel Minnesota Twins

After majoring in sociology and criminal justice, Giesler worked as a legal secretary, then as a paralegal at Lindquist & Vennum. She attended William Mitchell College of Law at night and was promoted to associate at the firm. She joined Kaplan, Strangis and Kaplan in 1997 to focus on business law, and the Minnesota Twins soon became her biggest client. She joined the baseball team’s front office in 2014.

photo: Caleb Fox



Vice President, General Counsel, and Corporate Secretary Nuclear Energy Institute

Before assuming her current role at NEI in 2005, Ginsberg was assistant GC and then deputy GC at the trade association. She began her legal career as a clerk for the Nuclear Regulatory Commission’s Atomic Safety and Licensing Board Panel and moved to Swidler and Berlin. She is a magna cum laude graduate of Tufts University and earned her law degree at American University.

Rick McMurtry (far left) and his husband, Randall Kilpatrick (far right) and their two sons. “In a way, being a part of the struggle for recognition of same-sex marriage has meant my generation doesn’t take marriage for granted,” McMurtry says. “We’re happy we finally have it, and life is good.”

MATT HAMEL (p142) Executive Vice President, General Counsel, and Secretary Brown-Forman Corporation Hamel studied economics and political science at Yale University and earned his law degree at the University of Chicago with Fulbright Scholar credits along the way. He worked with Dow Jones and Company as associate general counsel; Factiva as general counsel, secretary, and vice president; and Colgate-Palmolive Company as division general counsel.


Senior Vice President, Legal & Regulatory Affairs and General Counsel American Beverage Association

Hancock joined the ABA in 2011 after a 26-year career with the international law firm McDermott Will & Emery. At the ABA, she leads all legal and regulatory aspects of industry issues, including official comments on regulatory guidelines such as the recently-proposed FDA labeling guidelines, and the evaluation of the Balanced Calories Initiative, a voluntary program that aims to reduce beverage calories consumed per person nationally by 20 percent by 2025.


Executive Vice President, General Counsel, Chief Human Resources Officer, and Secretary Atlas Air

Kokas has been with Atlas Air for almost nine years. Shareholder outreach, new operations, and compliance are on his mind now, but he knows the landscape

of the future will bring new focus points. Kokas was a partner at Ropes and Gray before joining Atlas, and he studied law at Boston University.


Vice President, General Counsel, and Secretary NetScout Systems Levinson came to NetScout in 2005. He was named a “Leader in the Law” by Massachusetts Lawyers Weekly in 2013; he authored “Managing the Corporate Legal Department: How to Create Plans, Develop Processes, and Lead the In-House Legal Team,” and he has written articles about rethinking the role of corporate counsel and navigating crossborder mergers and acquisitions. He earned his bachelor’s degree from Harvard University, his JD at Boston University School of Law, and his MBA at Babson. CROSS-DISCIPLINE “Two things kept me balanced during NetScout’s acquisition: my family and Crossfit,” says Levinson, who works out early mornings at Crossfit Newton and considers it a blessing to come home to his wife and two sons at the end of a long day. His favorite Crossfit training is the back squat, and his least favorite the sled push. He has a love-hate relationship with burpees.


General Counsel, Compliance Director, and Secretary Raymond James Financial Inc.

Paul Matecki was previously chief legal officer and general counsel for Raymond James, beginning in 1989. A graduate of Grinnell College and Saint Louis University School of Law, he was GC for two financial brokerage firms prior to joining Raymond James. He has been in his current role since 2005.


Assistant General Counsel Turner Broadcasting System

McMurtry studied business administration at Belmont University before studying law at Vanderbilt University. He started his career as an associate at Howrey Simon and worked at Powell Goldstein before joining Turner Broadcasting System in 2006. Today, he’s the company’s assistant general counsel responsible for intellectual property and commercial clearance groups.




“Although expertise is obviously important, so is being creative and open to a flexible approach.” – ALAN MODLINGER

Off the Cuff

WITH ALAN MODLINGER MODERN COUNSEL : Which three words best describe you? ALAN MODLINGER : Conscientious, pragmatic, ethical. MC : What do you believe is possible that others don’t? AM : That tomorrow can be better. MC : What’s your favorite legal term and why? AM : The “reasonable person” standard. It’s often useful to go outside your personal perspective and think about how a hypothetical reasonable person might view things. MC : What is your personal motto or words to live by? AM : “Keep perspective.” We constantly face personal and professional situations that don’t go our way. We can get angry or upset, but at the end of the day, few of them are really game-changers. MC : What’s the best piece of advice you’ve ever received? AM : When I was a new lawyer, a partner told me, “Make yourself indispensable.” He said to learn everything there was to know about the documents being produced so that the team couldn’t live without me.




ALAN MODLINGER (p55) Counsel and Director, Office of the General Counsel Merck & Co. Inc Modlinger’s experience as a US Department of Justice trial attorney and Lowenstein Sandler PC litigator laid a groundwork of expertise to manage outside counsel. Modlinger studied political science as an undergraduate at the University of Pennsylvania and completed his graduate work at Yale Law School.

GJON NIVICA, JR. (p90) Senior Vice President and General Counsel Celanese

Nivica joined Celanese after 13 years at Honeywell and five at Gibson, Dunn & Crutcher. He is an alumnus of Florida State University, earned his law degree from Boston University, and is an alumnus of the General Manager Program at Harvard Business School.


Vice President and Associate General Counsel Parallels

Norton joined Parallels in 2012—a great fit given her specialty in international business law. As in-house counsel, Norton enjoys that her role at Parallels is always changing and bringing something new every day. Norton is an alumna of the University of Michigan, Seattle University, and University of the Pacific.

KARAH PARSCHAUER (p22) Vice President and Associate General Counsel Allergan

Parschauer started her legal career as an associate at Latham & Watkins in 2003. She joined Allergan as senior counsel in 2005, and has risen to associate general counsel and vice president of the company. She hopes to be general counsel of a company in five years.

BARRY PARSONS (p98) Associate General Counsel, General Litigation and Investigations Freddie Mac Parsons was an associate and then counsel at Crowell and Moring LLP for nearly 14 years before accepting his current position at Freddie Mac, where he specializes in complex litigation. Since joining the company in 2010, Parsons has received the General Counsel Impact award in 2011, and was named one of the company’s first two fellows to the Leadership Counsel on Legal Diversity in 2012. Parsons is an alumnus of American University’s Kogod School of Business and George Mason University School of Law.


Off the Cuff


MODERN COUNSEL : Why did you become a lawyer? DESIREE RALLS-MORRISON : Like most lawyers, because I think I’m always right. MC : What was your favorite thing about law school? DRM : Weekends. MC : What was your least favorite? DRM : The culture at Harvard Law School.

Off the Cuff

DESIREE RALLS-MORRISON (p16) DOUG SANDBERG (p28) Senior Vice President, General Counsel, and Secretary Boehringer Ingelheim USA

Senior Vice President and General Counsel Worldpay US, Inc.

Ralls-Morrison joined Boehringer Ingelheim in October 2013 from Johnson & Johnson. She earned her bachelor’s degrees in economics and political science from Wesleyan University and studied at Harvard Law School. She specializes in regulatory law. She was honored as a Woman of Power and Influence by the National Organization of Women in 2015.

Sandberg joined Worldpay US in May 2000 as the company’s first general counsel. Worldpay US is the US division of the Worldpay Group headquartered in London. Prior to joining the company, Sandberg spent 12 years in private practice in Atlanta, where he specialized in the areas of corporate law as well as commercial and civil litigation.


DAVID SLOAN (p64) Senior Vice President and General Counsel Sunstone Hotel Investors

Ralston is a more-than-20-year veteran of the oil and gas industry. She worked her way up through several positions at Schlumberger Limited before joining Weatherford International as general counsel and secretary. She was named GC of FMC Technologies in 2015. She is an alumna of Texas A&M University and University of Houston Law Center.

Sloan joined Sunstone in 2007 and was promoted to vice president of legal in 2010. He became senior vice president in 2013. Sloan began his legal career at a real estate and litigation firm in San Diego after graduating from the Thomas Jefferson Law School. He earned his undergraduate degree at Ball State University.

Senior Vice President, General Counsel, and Corporate Secretary FMC Technologies

WITH KARAH PARSCHAUER MODERN COUNSE L: How did your biology major prepare you for law? KARAH PARSCHAUER : Personally, I have a real interest in science and an interest in medicine, so being at a pharmaceutical company is a perfect combination for me. It’s nice that I appreciate science, and I’m not scared of it. A lot of people don’t like getting into the science pieces because it’s complicated and different than what lawyers are used to. Biology did not prepare me for actual general law at all. Being a science major, I was very used to having a right answer and a wrong answer. I would walk out of an exam knowing whether I passed or failed. I would walk out of my law exams, and I would have no idea how I did. There was nothing to look up or review. I was either right and argued it well, or I was wrong and had no idea what I was talking about.

DAVID ROYSTER (p75) Vice President and Deputy General Counsel Zimmer Biomet Royster earned a bachelor’s degree in political science from Duke University and studied at the Washington University School of Law. He began his legal career in 1997 as a litigation associate with Baker and Daniels. He joined Zimmer in 2000.





Executive Vice President, Secretary, and General Counsel Monsanto

Snively joined Monsanto more than 30 years ago. He was mentored to be general counsel by predecessors Charles Burson, a former Tennessee attorney general, White House counsel, and chief of staff to Vice President Albert Gore; and R. William Ide, the former American Bar Association president. Snively is an alumnus of Indiana University’s Robert H. McKinney School of Law.


Executive Vice President and General Counsel Lettuce Entertain You Enterprises Inc.

Stieber has been with Chicago-based LEYE for 20 years. He advocates for the restaurant industry as a board member of the National Restaurant Association. Stieber earned his bachelor’s degree in accounting at DePaul University and studied at the Northwestern University School of Law.

DAVID STRAUSS (p12) Vice President and Associate General Counsel Experian Strauss graduated from Duke University with a bachelor’s degree in political science and psychology. He studied law at the University of Wisconsin–Madison and graduated in 1993. Based in the Chicago area, he’s worked at Experian for 13 years and serves in a general counsel capacity for multiple business units of the global information business. 160



“We had employees who had worked here longer than I had been alive. There were decades of institutional knowledge and inertia. We wanted to keep all the wonderful parts but play a role in creating a more modern and competitive sports franchise.” – LYDIA WAHLKE

HIRO TACHIBANA (p10) Vice President and General Counsel Capcom USA

WILLIAM THRO (p122) General Counsel University of Kentucky

Hiro Tachibana began building expertise in commercial law when he switched from tax law to commercial practice at Fujitsu America. He has bachelor’s and master’s degrees in applied mathematics and has worked for law firms and technology companies, including Digeo and MIPS Computer Systems.

Thro came to the university in 2012 after representing public universities for more than 20 years. He also taught and continues to teach law. He spent time as the Solicitor General of Virginia. Thro is an alumnus of Hanover College, the University of Melbourne, and the University of Virginia School of Law.

photo: Caleb Fox



Deputy General Counsel and Assistant Corporate Secretary Sharp Electronics Corporation

Tyler graduated at the top of her class at Brooklyn Law School. As a former litigator, she can identify, anticipate, and mitigate legal and business risks in her current role as a corporate generalist. She handles commercial contracts, employment matters, internal investigations, oversees major litigations, and offers strategic advice to management in the United States and Japan.

“When I was injured, I spent weeks in traction in the hospital and then months at home in a body cast. I was told I would never compete athletically again. I could not stand up when I got out of the cast and there were days when I thought I was not going to make it. [...] Five years later I was playing Division I basketball for the University of Pennsylvania. [...] (That) taught me to be tenacious, aggressive, work hard, make good decisions, never quit, to stay positive, and always look for the opportunities in every situation.” – KEVIN WARREN


Former Senior Vice President and General Counsel Aerosoles

Before joining Aerosoles, Vogel was the vice president and head employment lawyer at L’Oreal USA. She worked as associate general counsel at Dun & Bradstreet. Vogel joined Aerosoles when the company had no formal legal department, so she built the in-house team from scratch.


Vice President and General Counsel Chicago Cubs

After earning her bachelor’s degree in cinema-television production from the University of Southern California, Wahlke was an editor and field producer for Miramax on projects like Shakespeare in Love, Cold Mountain, and Serendipity. Wahlke finished law school in 2005, clerked for Judge Amy J. St. Eve in Chicago, and joined Kirkland and Ellis in 2005. In 2010, Wahlke joined the Cubs as assistant general counsel and was promoted four years later.



Warner joined Motorola in 1997 after spending the previous six years as an associate in two Chicago law firms. She spent nearly 13 years as senior counsel, and later vice president, for Motorola’s transactions department before assuming her current role.

Prior to joining LG in 2004, Wingate was senior managing counsel at Sony Electronics for 19 years. He is concurrently an associate professor in the paralegal program at State University of New York, Westchester Campus.

Corporate Vice President, Deputy General Counsel, and Secretary Motorola Solutions

KEVIN WARREN (p72) Chief Operating Officer Minnesota Vikings

Warren was previously EVP of legal affairs and chief administrative officer with the Minnesota Vikings, VP of player programs/football legal counsel and VP of football administration with the St. Louis Rams, and SVP of business operations and general counsel with the Detroit Lions.

General Counsel and Vice President, Human Resources LG Electronics USA, Inc.

PUTTING OUT FIRES “I began volunteering in my hometown fire department shortly after 9/11, along with several other guys in my neighborhood. It’s taught me the value of community, teamwork, and safety. And whatever we pay the professional firefighters, as far as I’m concerned, it’s not enough.”




“We tend to think a lot about business and networking and the alliances we build to help reach our goals, but they are essentially about the people that are involved, the way we treat them, and acknowledging their importance in what we are trying to achieve.” – KEVIN WARREN, MINNESOTA VIKINGS






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