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LIFE OF IN-HOUSE LAWYERS

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					LIFE OF IN-HOUSE LAWYERS




Standing, left to right: Wells Fargo Senior Counsel Priya Sanger; Senior Company Counsel Ted Kitada; Assistant General Counsel
John Wright; and Senior Counsel Damier Xandrine. Sitting, left to right: Counsel Seta Arabian and General Counsel James Strother
                                                                                                                                   Leslie A. Gordon




F
       or Priya Sanger, senior counsel at Wells Fargo                          she says, “the intellectual challenge of dealing with a wide
        & Company, a typical day at the office is, she says,                   range of legal issues and being in touch with the business.”
       “actually pretty exciting.” It may go something like                    On the flip side, the biggest challenge is staying abreast
       this: begin the work day at 7 a.m. with a phone call                    of news related to her industry. “I read four papers every
to India and throughout the day attend three or four                           day, plus I skim the American Banker,” says Sanger, who
meetings with clients and colleagues on legal matters re-                      also serves as secretary for the BASF Board of Directors.
lated to anything from mobile payments, export control,                        “There is a lot of responsibility to our customers, to the
and joint ventures to online fraud control. Sanger spends                      bank, to your department, and to the internal business
the rest of the day responding to emails from business                         client you represent. Sometimes those interests can
units, seeking advice on issues                                                                          collide. Keeping it all straight is
ranging from “What is our                                                                                a challenge we all face on a
blogging policy?” or “Can I                                                                              daily basis.”
ship this server to the UK
without violating export                                                                                      Yet in-house counsel like Sanger
laws?” to “Please approve the                                                                                 are, it turns out, pretty happy
content of this wireless ad”                                                                                  lawyers. According to the Associ-
and “We want to make an eq-                                                                                   ation of Corporate Counsel’s
uity investment in another                                                                                    Eighth Annual Chief Legal Offi-
company—what issues should                                                                                    cer Survey, 85 percent of chief
we be concerned with?”                                                                                        legal officers and general counsel
                                                                                                              find their careers rewarding. Sur-
Sanger’s favorite thing about                                                                                 vey results are based on responses
being an in-house lawyer is,                                                                                  in late 2007 from 1,166 lawyers

                                                                                                               Priya Sanger and James Strother
24 SUMMER 2008                                                                                                 All photos by Jim Block
working at companies with annual                                                    tices such as brush clearance and
revenue ranging from less than $500                                                 unexpected heavy-lift helicopter haz-
million to more than $10 billion.                                                   ard removal to promote local commu-
                                                                                    nity safety.”
Seventy percent of respondents focus
on corporate transactional work,                                                    For law firm lawyers who think they
while 28 percent handle compliance                                                  want to move in-house, Harris advises
and 21 percent focus on board rela-                                                 becoming familiar with a company’s
tions. More than 32 percent of gen-                                                 business and values to make sure it’s a
eral counsels expect to add more                                                    good fit. In-house counsel must do
in-house lawyers during the next year,                                              more than “pure legal work,” she
which may be good news for attor-                                                   adds. “We are expected to bring other
neys looking to leave law firm life.                                                strengths and talents to the table.
                                                                                    Sometimes we have to work through
Nicole Harris joined the commercial                                                 the legal analysis, distill it, and then
transactions group in the law depart-                                               stop thinking like a lawyer to truly
ment at Pacific Gas and Electric                                                    add value.”
Company more than six years ago. Nicole Harris
Each day at work is different, she says,
                                                               I N -H OUSE P RO B ONO
because priorities shift based on business needs and dead-
                                                               Once exclusively the domain of law firm lawyers, pro
lines. “As in-house counsel, we work more closely with
                                                               bono work is gaining attention among in-house attorneys.
the business units than outside counsel typically does,”
                                                               Through newly established programs that make pro
Harris explains. “Not only do we want to provide excel-
                                                               bono accessible to corporate legal departments,
lent legal advice and service to the business units, we also
                                                               in-house lawyers are now handling everything from
want to be part of the team that comes up with a collab-
                                                               landlord-tenant litigation to equity deals for low-income
orative way to get the work done for the company in a
                                                               entrepreneurs.
logical, practical manner.”
                                                               The in-house pro bono movement was sparked at least in
Harris, a member of the BASF Board of Directors, spends
                                                               part by Corporate Pro Bono, a national project of the As-
most of her time in the San Francisco office, but period-
                                                               sociation of Corporate Counsel and the Pro Bono Insti-
ically makes field visits to places such as Nevada City,
                                                               tute. At the urging of several progressive chief legal
Redding, Merced, and Salinas. “My practice group sup-
                                                               officers, Corporate Pro Bono two years ago initiated the
ports a number of business units, so the types of transac-
                                                               Corporate Challenge, a voluntary statement of commit-
tions are equally varied from constructing a transmission
                                                               ment to pro bono service by in-house legal departments.
line to providing additional reliability for customers to
                                                               Challenge signatories receive free guidance and tailored
creating an agreement that will build buy-in among sev-
                                                                 support to strengthen existing pro bono programs or
eral utilities to participating in a renewable energy
                                                                          start new ones. Bank of America Corporation,
credit database or providing advice on state
                                                                                   Clorox Company, Intel Corporation,
and local political laws. Some of
                                                                                            and Hewlett-Packard Com-
the work is of the type you
                                                                                              pany are among the sixty
might expect, such as multi-
                                                                                            signatories to the Corporate
million dollar services and
                                                                                           Pro Bono Challenge.
procurement agreements,” Harris
explains, “but I also support the Natu-                                             At Wells Fargo & Company, the legal
ral Resources Management Forestry                                                   department’s diversity committee es-
team when it engages in forestry prac-                                              tablished a pro bono program to iden-



                                                                    THE BAR ASSOCIATION OF SAN FRANCISCO SAN FRANCISCO ATTORNEY 25
tify opportunities for the bank’s attorneys who are inter-     BASF members’ time.” Defining diversity in the broadest
ested in pro bono. The committee also helps resolve con-       way, he added, “We want everyone to go to an office where
flicts issues, which can be especially tricky for lawyers      equality, diversity, inclusion, and retention are matter-of-
practicing at financial service companies. “It’s one of the    fact things. They just are.”
peculiarities of our business,” explains Wells Fargo General
Counsel and Executive Vice President James Strother. “The
areas of expertise where we add value to pro bono matters—       Law firms must also invest in
such as bankruptcy law—are also areas we have conflicts.”
                                                                   high school and college
Other historic challenges to in-house pro bono work in-
clude lean staffing, a lack of malpractice insurance, little
                                                                  “pipeline” projects, which
litigation infrastructure, and the fact that corporate         encourage and support minority
lawyers may not be licensed to practice in certain jurisdic-
tions. To overcome some of those hurdles, Jeffrey Hyman,        students interested in entering
a lawyer at Intel Corporation, developed at his company              the legal profession.
a collaborative pro bono program that pairs in-house
attorneys with lawyers at legal aid agencies and law firms
that already have the infrastructure required for pro          State Bar President Jeff Bleich of Munger Tolles & Olson
bono work.                                                     echoed Donato’s sentiment, describing the State Bar of-
                                                               fice’s “portrait after portrait” of white men who have
According to Tiela Chalmers, executive director of BASF’s      served as bar president. “I can’t help but think about what
Volunteer Legal Services Program, there are compelling         the profession lost due to narrow-mindedness and big-
reasons for in-house lawyers to take on pro bono cases. In     otry,” Bleich said. He added that the legal profession’s
addition to increasing the company’s visibility as a good      demographics “don’t come close to the diversity of the rest
community citizen, handling pro bono matters can be a          of society.”
team-building experience for corporate counsel and also
enables in-house lawyers to gain practical experience.         In further deliberation of these issues, BASF Diversity
                                                               Director Yolanda Jackson moderated a discussion between
BASF C ONFERENCE ’ S D IVERSITY M ESSAGE                       Wells Fargo’s Strother and Arthur Chong, general
In opening BASF’s Law Office Diversity, Inclusion, and         counsel of Safeco Insurance Company of America.
Retention conference on the fortieth anniversary of Mar-
                                                               According to Strother, Wells Fargo became especially in-
tin Luther King, Jr.’s assassination, BASF President James
                                                               terested in diversity when it determined that its
Donato of Cooley Godward Kronish cited “dismal figures”
                                                               employees—everyone from branch tellers to high-level ex-
related to diversity in the legal profession. Those figures,
                                                               ecutives—should mirror the makeup of the bank’s 30 mil-
he said, represent an inadequate rate to preserve law firm
                                                               lion customers. “We need to reflect the communities we
diversity, let alone improve it.
                                                                                     serve,” he explained. “And you get a
But “rather than wringing our                                                          better [work] product with a di-
hands and giving up,” BASF in-                                                         verse group of lawyers.”
stead brought together firms and
                                                                                        Chong added that soon the
clients to strategize about how to
                                                                                        majority of the country will be
diversify the legal profession.
                                                                                        nonwhite. As a result, “Diversity
That mission, Donato explained,
                                                                                        is good business; it’s not just
is “the highest and best use of
                                                                                        the right thing to do,” Chong




26 SUMMER 2008
said. “I can’t think of a Fortune 500 company that’s not      share that mission. “As a profession, we are second to last
interested in diversity.”                                     with respect to diversity. We are the legal profession. We
                                                              should be first.”
Both companies insist that their outside counsel also be-
come more diverse. When Chong hears pitches from law          All of the in-house lawyers on the panel said that a law
firms, he doesn’t just want minority lawyers as “window       firm’s diversity has tipped the scale in terms of that firm
dressing. We want minority lawyers actually doing the         receiving work. Minority hiring, partnership, advance-
work,” he insists.                                            ment, and retention as well as diversity committees and
                                                              mentoring programs are analyzed. For smaller firms, the
At Wells Fargo, outside-lawyer hiring statistics related to   general counsels take a flexible approach and focus espe-
diversity are a part of the evaluation of every in-house      cially on improvement in diversity statistics. The compa-
lawyer at the bank. “We create measurements and use           nies, according to their general counsels, want law firms
them to make distinctions between people,” Strother said.     to succeed.
“It works.”
                                                              Minority associations and affinity groups at law firms, as
In a later conference panel, other corporate counsel—in-      well as providing opportunities for community and profes-
cluding James Potter of Del Monte Foods, Hyun Park            sional involvement, have proven to help attract and retain
from Pacific Gas and Electric Company, Angela Hilt of         minority lawyers. According to the panel, law firms must
the Clorox Company, and Michelle Banks from the Gap,          focus on the so-called onboarding process—that is, ensur-
Inc.—discussed the importance of diversity at their com-      ing that minority lawyers receive from the outset engaging
panies and their outside firms.                               work, direct client contact, and feedback from partners.
                                                              Law firms must also invest in high school and college
At the Gap, for instance, the legal team signed public
                                                              “pipeline” projects, which encourage and support minor-
pledges to improve diversity among its in-house and out-
                                                              ity students interested in entering the legal profession.
side lawyers. “My legal team works better with diverse
teams,” Banks explained. “The ideas are more innovative       A former lawyer, Leslie A. Gordon is a freelance legal journal-
and more creative solutions result.”                          ist living in San Francisco, not to be confused with
                                                              BASF’s own Leslie Gordon. She can be reached at
At Del Monte, equal opportunity is “a core value,” Potter
                                                              leslie.gordon@stanfordalumni.org.
said, and his lawyers will work only with law firms that


                             “We want everyone to go to an office
                              where equality, diversity, inclusion,
                             and retention are matter-of-fact things.
                                         They just are.”
                                                                                   James Donato


                                                                    THE BAR ASSOCIATION OF SAN FRANCISCO SAN FRANCISCO ATTORNEY 27
                                                               Comprising 275 such specialists, Wells Fargo’s legal de-
                                                               partment is spread over nineteen states with the largest of-
                                                               fices in San Francisco, Des Moines, and Minneapolis.
                                                               Attorneys are divided into twelve sections organized along
                                                               functional lines, such as consumer real estate, litigation
                                                               and loan workouts, corporate transactions, capital mar-
                                                               kets, employment, corporate-owned property, and intel-
                                                               lectual property. Deputy general counsels lead teams of
                                                               four or five attorneys.

                                                               Not surprisingly, Strother, who became the bank’s general
                                                               counsel in 2003, wouldn’t discuss the legal department’s
                                                               budget, aside from saying, “It’s big.” He added, “You can
                                                               extrapolate by considering what would it take to run a
                                                               group of 500 employees. Interestingly, our inside and
                                                               outside budgets are similar. They’re not 50-50, but it’s not
                                                               far off.”

                                                               What may be surprising is that Strother spends more time
                                                               on legal matters than on management, becoming directly
                                                               involved in individual legal matters whenever senior exec-
                                                               utives or the board ask him to. “If I’m not handling it [my-
                                                               self ], I need to be familiar with it,” Strother explains. “If
                                                               we have a big litigation matter, I will stay close to it. I’m
                                                               involved in strategy and settlement. I read the pleadings.
                                                               For big merger and acquisition deals, I’m in on the deci-
                    James Strother                             sion on major deal issues.”

                                                               Strother has worked hard making sure his team under-
                                                               stands when he needs to know details about individual
                                                               matters. “My rule of thumb? If it’s reported in the paper,
                                                               I’d better know about it.”

                                                               When hiring in-house attorneys for his department,
                                                               Strother says he looks specifically to fill a business need.


James Strother/Wells Fargo                                           “I go in in the morning
In the Wells Fargo & Company legal department, attorneys
                                                                   and know that something’s
quickly become specialists. “Once you’ve learned bank reg-          going to come up that I’ve
ulation, that’s a huge investment that adds a lot of value,”
explains General Counsel and Executive Vice President             never seen before, perhaps
James Strother, a former BASF board member. “We give                  a real knotty problem.
people opportunities to work on big, interesting stuff, and
they develop deep expertise.”                                     But I have a great team, and
                                                                   the job is very stimulating.”
                                                                                                          James Strother


28 SUMMER 2008
The average candidate has been out of law school for four       munity. “Be active in your bar association and affinity
to ten years and has worked at a law firm or other corpo-       groups. Publish articles in your area of expertise. Let peo-
ration. “I want them to go right to work, with client con-      ple know you’re interested in being hired” by corporate
tact and responsibility,” he says.                              counsel, she says.

Priya Sanger, current secretary for the BASF Board of Di-       For Strother’s part, the best thing about being general
rectors, for example, became senior counsel                                counsel is the breadth of issues. “Wells Fargo
at Wells Fargo almost eight years ago.                                           is a very large, very diverse corporation,
She started in retail credit and tech-                                                with 160,000 employees and
nology but is now part of the                                                            eighty-four business lines all over
strategy and operational risk                                                               the world. The variety of is-
group, working on e-com-                                                                      sues that come up is mind-
merce issues, joint ven-                                                                        boggling. But it’s a mixed
tures, corporate law, and                                                                         blessing. I go in in the
information security.                                                                              morning and know that
She also handles wire-                                                                             something’s going to
less payment projects                                                                               come up that I’ve never
and online banking                                                                                  seen before, perhaps a
matters. International                                                                              real knotty problem.
issues, which have                                                                                  But I have a great
increased during her                                                                               team, and the job is
tenure, have her work-                                                                            very stimulating.”
ing frequently with
counterparts in India and                                                                       The biggest challenge of
the United Kingdom.                                                                            being general counsel,
                                                                                            Strother says, is that “nobody
When retaining law firm lawyers,                                                          can know enough to do the job.
Strother says there are “two ex-                                                     You can’t be 100 percent sure you’re
tremes.” He explains, “In areas where a lot                                      always right. The legal environment we’re
is at stake, such as big litigation or a regulatory                    in is so complex and it’s getting more and more so.”
issue, it’s a very individualized process for that matter. In
that case, we hire individual lawyers. Sometimes there’s a      A Midwesterner who received his college and law degrees
request for proposal process, but we usually have a pretty      from the University of Minnesota, Strother lives in Pied-
good idea of who we’re going to hire.”                          mont. When he’s not working, he spends time with his
                                                                family, including one child who just finished college and
At the other extreme, though, are the smaller matters that,     another in high school. “I prefer that to golf,” he says.
he says, “are important in a different way.” In those cases—    Strother and his wife keep a lake cabin in Minnesota where
usually consumer collections or bankruptcies—Wells              they visit during the summer.
Fargo has “lots and lots of legal retentions. We identify
firms that do good work at a very reasonable price. We          One of Strother’s goals for his legal department is to pre-
look at multiple firms and determine who’s best for the         pare for what he calls demographic issues. “We have a lot
price. It’s a wholesale process.”                               of long-tenured people, attorneys who have been at Wells
                                                                Fargo for twenty to twenty-five years. These baby boomer
To be hired in either situation, Sanger advises law firm        lawyers will be retiring at the same time, and when that
lawyers to maximize being in the right place at the right       happens a lot of experience is going to walk out the door.
time so that their names become known in the legal com-         We’ve got some years to work on it, but I want to focus on



                                                                      THE BAR ASSOCIATION OF SAN FRANCISCO SAN FRANCISCO ATTORNEY 29
developing junior lawyers so they step in and don’t miss
a beat.”

Otherwise, though, Strother says there’s little to improve
on. “The legal department is a high functioning group,”
he says. “Our lawyers are very effective. It’s really a pre-
mier law department—certainly for financial services
companies and for any corporation in America.”



Hyun Park/Pacific Gas and Electric
As senior vice president and general counsel of Pacific Gas
and Electric Company, Hyun Park oversees the corpora-
tion’s regulatory and securities law compliance, litigation
strategy, and significant corporate transactions. He’s served
as general counsel at two other corporations; before that he
was a corporate transactional lawyer at Latham & Watkins.

Making the choice to become a general counsel, just a
year after making partner at a law firm, was difficult for
Park. “You work so hard to become a partner, and you
wonder, ‘Am I giving up what I’ve earned?’” he recalls.
“Looking back, what appeared to be a risky move entailed
not much risk at all. I didn’t lose any skills [by leaving law         Hyun Park
firm life]. If anything, my skills improved. Going in-
house was a great decision.”

Park’s legal department consists of eighty-six lawyers di-
vided into four groups: corporate; litigation; generation,
supply, and transmission; and distribution and customer
service. Like Wells Fargo’s Strother, Park wouldn’t reveal
his legal department’s budget, but he did say that inside

“I’m very much a fundamentals                                    expenses constitute slightly more than 50 percent and out-
                                                                 side counsel expenses are slightly less than 50.
 person, and for a golfer, the
fundamentals are grip, stance,                                   Park gets directly involved in specific matters “if it’s of
                                                                 extreme importance to the company, [then] I am one of
and swing. There’s an analogy                                    the primary lawyers,” he says. “I try to pick out my top-
    to the legal function. The                                   priority items and become substantively immersed in
                                                                 those. It’s comparable to how a partner-in-charge would
fundamental is providing great                                   manage a corporate matter. I spend less hours than other
  legal service to our clients.”
                                               Hyun Park




30 SUMMER 2008
people, but I try to roll up my sleeves and get into a mat-       department cuts across the organization, “I’m pulled in a
ter in sufficient detail to understand the key risk drivers. I    lot of different directions. Every day I have to ask, ‘What
stay at a strategic level.”                                       are my most important priorities? Where should I spend
                                                                  my time?’ I need to step back and think strategically.”
Park says he “enjoy[s] being part of an organization with a
sense of mission.” Diversity, for example, is a core corporate    Born in Korea, Park moved to Queens when he was eleven.
value at PG&E and, as a result, last year the legal depart-       After college, he entered graduate school in economics but
ment rolled out a unique summer associate program de-             soon felt it was too theoretical so he switched to law school.
signed to give regulatory experience to law students who have     When he’s not working, he spends time with his family, in-
demonstrated a commitment to diversity. Developed in re-          cluding a high school age son and two younger daughters.
sponse to law firms that bemoaned a lack of minority lawyers      “I’m a terrible golfer, but my daughters started playing golf
with regulatory experience, the program this                                     when they were young. I like to take them to
year has expanded to eight weeks.                                                   play,” he says. Park also does community
                                                                                       work, including serving on the board of
“The company feels strongly                                                                   the San Francisco Food Bank.
about the need to achieve ex-
cellence,” explains Park, who                                                                 When asked about his goals for
reports directly to the CEO.                                                                   the PG&E legal department,
“We want to take the company                                                                   Park replied, “I mentioned I’m
to the next level, to become a                                                                 a bad golfer, but I use golf
leading utility. We want to                                                                    analogies a lot. I’m very much a
provide great customer service                                                                 fundamentals person, and for a
and deliver for our sharehold-                                                                 golfer, the fundamentals are
ers. We have great, engaged                                                                    grip, stance, and swing. There’s
employees. I’m part of the                                                                    an analogy to the legal func-
team that owns all of that. It’s                                                              tion. The fundamental is pro-
not just pure legal advice.                                                                        viding great legal service to
It’s immensely interest-                                                                                our clients. It’s not very
ing and fulfilling.”                                                                                     different from what
                                                                  outside lawyers do. At the end of the day, you need to
While some chief legal officers complain that legal depart-       know your clients’ needs, do great substantive work,
ments are viewed by executives only as a cost center, Park        achieve great results, respond in a timely manner and meet
says, “I don’t feel that one bit. I have an important role in     deadlines, communicate well, be clear and concise, and
trying to manage the company’s downside as efficiently as         provide practical solutions clients can use. Speak up when
possible. We do enhance shareholder value in corporate            something’s not right. Be efficient. Work hard and put eth-
transactions. If we negotiate deals well, it can translate into   ical values at the top. Strive for great teamwork. So,” he
shareholder value. We take very seriously the notion that         concludes, “there will be no radical changes [to PG&E’s
the money we handle is not our money—it’s our share-              legal department]. I have no plan to take half our func-
holders’ or our customers’ money.”                                tion and outsource to India. We have a world-class team.
                                                                  We’ll just work really hard to serve our client.”
One of the biggest challenges of being general counsel is,
Park says, “the enormous demands on my calendar. I want
to help anybody who asks for my help, but there are only
a certain number of hours in a day.” And because the legal         All photos by Jim Block




                                                                          THE BAR ASSOCIATION OF SAN FRANCISCO SAN FRANCISCO ATTORNEY 31

				
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