ACC Update - January 26, 2007 (Plain Text Version)

CLO Insights: Protecting Your Company’s Reputation

CLO’s Role in Helping to Ensure & Protect the Company’s Reputation: Assessing Risks, Managing Client Confidences, and Being a Front-line Practitioner

Insights from Michael Roster, Executive Vice President, Golden West Financial

“The time when CLOs really earn their stripes is when they advise clients in situations when there isn’t a clear answer. This requires a very good understanding of the company and very close rapport with the others in senior management. It also means putting in place processes to monitor legal developments that might clarify the situation going forward, and to continually monitor the risks that are created until there is clarity. Lawyers who take the view that there can be no risk and require absolutes are doing their clients a disservice,” explains Mike Roster, who since 2000 has been the Executive Vice President and General Counsel of Golden West Financial Corporation/World Savings. “But this also means, don’t get too cute and don’t push the envelope. At the end of the day, it all turns on professionalism and good judgment.”

Roster’s experience as an in-house legal leader and leading private practitioner also includes his roles as general counsel for Stanford University (including the Stanford Medical Center) and, prior to that, managing partner of Morrison & Foerster’s Los Angeles office and co-chair of the firm’s banking group world-wide. Roster is set to retire from Golden West in mid-February and has graciously shared below his key insights on assessing and advising on risks, managing client confidences, and being a front-line practitioner.

ASSESSING AND ADVISING ON RISKS: A MUST FOR CLOs AND IN-HOUSE LAWYERS
“When faced with a tough set of circumstances, too many lawyers tell their clients ‘it’s a business decision for them to make.’ This is a cop-out,” says Roster, who relays his view that in today’s business environment, there is too much concern about personal risk. “Lawyers need to know the law and to explain the law to their clients, but they should also know the business well enough to be able to share their views on what they would do if they were in the client’s shoes,” explains Roster.

Steps that CLOs can take to help promote this important advisory role include:
•    Set the right ‘tone at the top’: Communicate to your legal staff the importance of understanding the business and the company’s internal clients, and bringing professional judgment to the table in addressing difficult issues.
•    Implement Processes to Monitor Legal Developments & Identify Risk: Track legal developments, and marry substantive expertise with knowledge of the company’s business, in order to help identify what risks there may be. And then, be ready to advise on implementing further changes where necessary.
•    Create a culture that encourages in-house lawyers to be trusted advisors: During law department staff meetings, talk about client needs for guidance and input on risk, and encourage idea exchanges during meetings with senior business leaders. CLOs can convey to their lawyers that the company culture supports engagement with business clients and offering real counsel without imposing burdensome bureaucratic processes.
•    Watch out for the lone ranger: Having this kind of interaction with clients means no lawyer should go it alone. As part of the process, lawyers need to talk with the CLO and other in-house attorneys about the tougher issues and ways to handle them.

MANAGING CLIENT SECRETS
“To be an effective lawyer—whether in-house or outside counsel—and definitely to be an effective CLO, you need to have sufficient standing with your clients so that the clients feel they may come to you and share information early on,” explains Roster. The ‘upside’ of this kind of open exchange is that lawyers receive important information on difficult and challenging issues at very early stages. The ‘downside’ is that lawyers receive highly sensitive confidential information—information that clients believe is too preliminary to share further up the chain but which they are seeking advice on.

Overlaying all of this is the ethical responsibility that the CLO has to the company: the client is the company, not the individual executive. However, the realities are that lawyers work with people, and so experience, judgment and people skills are critical to successfully navigate these situations. The end goal is to encourage internal clients to come to the CLO and other in-house lawyers with their concerns; to help the executives see possible solutions early on; and obviously to encourage the executives to communicate these sensitive company problems to their bosses, including the CEO, sooner rather than later.

Read the rest of this article.

See the report from the CLO ThinkTank that inspired this article: "Navigating the Complexities of C-Suite Relationships".

More CLOs Plan to Increase Use of Outside Counsel

More than 25 percent of chief legal officers say that they will increase their use of outside counsel this year, according to ACC’s 2006 Chief Legal Officer Survey. This is highest response to this question since 2001 and up from 16 percent in 2005.

Since 2000, ACC has conducted the Chief Legal Officer Survey in conjunction with the Annual Meeting in order to learn about current issues and topics that are important to you. This year ACC received 848 responses from in-house counsel, who serve as the top lawyers for their clients companies.

In another shift, CLOs say that they consider training such as seminars and CLE sessions as something expect and appreciate from outside firms. In 2005, in-house attorneys were more interested in communications initiatives, such as a monthly meeting with relationships partners, publications, and newsletters from outside counsel partners. See the full survey results to find out what else is on the minds of chief legal officers.

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Addressing Top In-house Concerns: CLO ThinkTanks

How are top Chief Legal Officers dealing with some of the latest legal issues? Find out about controversial topics that face today’s law department leaders. ACC’s CLO ThinkTanks bring a select group of successful CLOs together for a “deep dive” into current issues. Check out some of the current reports, such as:

•    "CLO's Role in Governance & Compliance—Canada" hosted by David Allgood from the Royal Bank of Canada
•    “CLO’s Role in Governance & Compliance” hosted by Laura Stein from The Clorox Company
•    “Compensation & Career Advancement for In-House Lawyers” hosted by Rick Palmore from the Sara Lee Corporation
•    “Corporate Liability—Prosecutorial Trends & Tactics” hosted by Bill Lytton from Tyco

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Online Resources for You and Your Team

ACC is continually adding resources to its website that can help you save time and money. The Virtual Library holds articles, in-depth analysis, benchmarking tools, and samples forms and policies all just for in-house counsel. Here are a few examples:

• Conflict of Interest and Ethics Sample Policy
• Online CLE courses from ACC’s 2006 Annual Meeting
• PLC’s Cross-Border Quarterly
• Top Ten Lessons Learned by CLOs about Executive Compensation From the Stock Options Crises

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Invest in Your Legal Department

As the chief legal officer for your company, you likely have attorneys and paralegals who could benefit from training on the inner workings of a corporate legal department. Not sure where to send them? Check out ACC’s Corporate Counsel University.

Now in its 5th year, Corporate Counsel University (April 29 – May 1, Hyatt Regency, St. Louis, MO) has become the gold standard for best practices for attorneys who are new to in-house, or who would like to sharpen their management and in-house practice skills. Like all ACC programs, Corporate Counsel University will emphasize practical tips and hands-on advice, with plenty of opportunities to interact with faculty and other attendees. Topics to be addressed include:

• Creating a Business/Legal Partnership with Your Clients
• Insurance Basics
• A Practical Forum on In-house Ethics

New this year, ACC has added programming developed by in-house paralegals for in-house paralegals, where they will have the opportunity to build networks and learn valuable skills. Restrictions do apply; see the website for details.

Sending your attorneys and paralegals to Corporate Counsel University is an investment in your company's legal department and the quality services it can provide to your client. Register by January 31 to receive the special advance registration rate. Register today. Questions? Contact the education team at education@acc.com or 202.293.4103, x. 451.

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Find Your Next In-house Superstar: In-house Jobline

As a Chief Legal Officer, you want to have a top-notch team and that requires the best talent for your in-house department. Or, perhaps you’re looking for your next career move. Either way, your first stop should be ACC’s In-house Jobline, the premier career website exclusively for the in-house community. ACC’s In-house Jobline provides you with multiple options to make your job easier:

•    Find positions that match your practice area, geographic location, job title, and other criteria by searching more than 900 current job postings
•    ACC members get a discount on job postings
•    Targeted advertising exposure—job listings will be seen by an exclusive audience of in-house professionals, reducing the workload when applications arrive.
•    Easy online job management—employers can enter job descriptions, check the status of postings, edit information, renew or discontinue postings, and even make payments online.
•    Resume searching access—with a paid job listing, search the database of resumes and proactively contact candidates; use an automatic notification system to receive email when new resumes match your criteria.

Visit In-house Jobline today.

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