HP Loses a GC
September 28, 2006 | Filed Under Governance, In the News
The Wall Street Journal reported first this morning that general counsel Ann Baskins has resigned. The New York Times picked up the story as well. This comes the very day of expected congressional testimony from HP CEO Mark Hurd and former board chair Patricia Dunn. The Journal reprinted a portion of a letter from lawyers for Ms. Baskins to the committee informing them of her intention to take the Fifth:
“Please understand, however, that Ms. Baskins very much wants to testify and discuss these matters,” her lawyers said in a letter to the House Energy and Commerce Committee. “Were she to do so, we are firmly convinced that the Subcommittee would recognize that she acted legally and ethically at all times. Given the current environment, however, Ms. Baskins simply has no choice.”
The full press release from HP is here. Rather curt, but understandably so.
I have avoided commenting on the HP imbroglio since I don’t like to dissect the legal work of a given corporation without knowing all the facts. Suffice to say that a valid governance concern (boardroom leaks to the press) developed its own inertia that apparently wasn’t adequately controlled over time.
One emerging lesson seems to be that everything comes out in the press eventually and that has to be weighed when examining options. What is possible may not be wise. What is legal may not be right. And I know that some alleged conduct of HP is of dubious legality.
The phrase “the cure is worse than the disease” seems somewhat apt here.
Wired GC — Unplugged Show #6
September 14, 2006 | Filed Under Unplugged - Audio, Compliance
“Legal Literacy for Business”
It seems like an almost daily occurence: you pick up a newspaper and read about a company that has a CEO, a board member, or even a GC under some ethical cloud. Once a matter has come to the attention of the public (and the regulators), a company is in damage control mode.
One way to guard against this is for corporate counsel to practice preventative law and educate managers in the business case for ethical conduct.
In today’s audiocast, we address this timely issue with Hanna Hasl-Kelchner, a corporate counsel and author of “The Business Guide to Legal Literacy.”
Today’s show is here (just click on the “mp3″ link):
mp3 (9:12 min; 2.1 mb)
Show Notes:
– Ms. Hasl-Kelchner’s website is found here.
– Her bio is here.
– The Legal Literacy weblog.
– A link to Ms. Hasl-Kelchner’s book on Amazon. Buy it! It’s cheaper than litigation…
The World DuPont Model
September 11, 2006 | Filed Under Law Firm Trends, Offshore Services
BusinessWeek profiles the moves of DuPont to take more legal work offshore, in this case with OfficeTiger. Here’s some interesting quotes by the numbers:
– “By going offshore, DuPont aims to save 40% to 60% on document work and cut up to $6 million from its annual $200 million-plus in legal spending.”
– “If DuPont does well with this, you will find other companies taking a good look,” says Bradford W. Hildebrandt, chairman of the legal consulting firm Hildebrandt International Inc., which estimates U.S. firms can save 25% to 35% by farming legal work to Asia.
– “For OfficeTiger, success could mean a surge in business. By the end of 2007, [they predict the] Asian legal team could reach 1,000 with several hundred lawyers.
The entire article is worth a read. Some have been thinking this offshore trend was always years away. Certain (most?) law firms might prefer to ignore the news; forward-thinking firms would be wise to consider how they can be involved in developing higher value solutions for their clients.
If they don’t, someone else will…
Once companies get comfortable with document and discovery related services, you can bet they will start moving up the offshore chain.
A tip of the Wired GC cap to DuPont for making a move that many Fortune 500 GCs are probably thinking about, but up until now have settled for “… you go first.”
Here’s a summary for the visual types among us:
Bonfire of the (Associate) Vanities?
September 1, 2006 | Filed Under Law Firm Trends, In the News
I wanted to resist the temptation to comment on the NY Times law firm associate article today but I …just…can’t…
Here it is if you missed it. The WSJ Law Blog also weighed in.
First off, you have to love the picture, with two compliant Weil Gotshal newbies dutifully holding a BlackBerry for the photographer. The dapper WG associate with the belt holster ought to know better than to stand in front of the “Weil,” though.
But then there’s the punchline: the new starting rate in NYC is clearing out at $145,000.
That may not be a lot of money in the Big Apple. It does, however, get the attention among some of the faithful clients of Weil Gotshal. They see this for what it is: their law firm is paying lawyers with no experience more than it pays anyone save top-level managers. You’d think that this would have repercussions long-term for such firms. Apparently you’d be wrong.
But the money is not the worst part.
The worst part is that some firms float this trial balloon:
The inevitable issue for clients as well as the firms is whether higher salaries are reflected in increased hourly rates. But Michael J. Gillespie, a partner at Debevoise & Plimpton, another law firm based in New York, said: “There’s not really a connection between salary levels and hourly rates. We set salaries at whatever is necessary to attract and retain the best associates. We set hourly rates by client demand and market conditions based on firms operating at our level in the market.”
Say what?
No connection between associate salaries and hourly rates?
That means partners are taking less to give first year associates more? And more to the rest of the associate classes to avoid overly compressing them?
Perhaps partners should try these on when standing next to clients:
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