A New Specter on Corporate Crime

December 8, 2006 | Filed Under Regulation, Compliance

Senator Arlen Specter weighs in on righting some of the wrongs in the prosecution of corporate crime. There may be some reason for optimism.

According to the New York Sun, the legislation introduced yesterday by Senator Specter:

[…] would nullify portions of corporate crime guidelines issued to federal prosecutors in 2003 as part of the response to business frauds, such as the collapse of Enron. The directive, authored by the deputy attorney general at the time, Larry Thompson, has come under fire from many quarters as an erosion of attorney-client privilege.

[..] would also bar the Justice Department from making prosecutorial decisions based on a company’s provision of legal fees or legal counsel to its employees. In March, a federal judge in Manhattan, Lewis Kaplan, ruled that prosecutors violated the constitutional rights of defendants in a tax shelter case by pressuring the accounting firm where they worked, KPMG, not to pay for their legal defense. The government’s appeal of that ruling is pending before the 2nd Circuit.

However, since Senator Specter is the outgoing chairman of the Judiciary Committee, it is not clear that this legislation will ever see the light of day.

And the NFL owners are probably happy about that…

Play ball....

Pfizer Gets Wiser

December 6, 2006 | Filed Under GC as CEO Springboard, Crisis Planning

The GC-to-CEO phenomenon is still news, I guess. When something happens to a lawyer-led company, the legal background is often noted.

Today’s Wall Street Journal mentions the ex-GC status of Pfizer CEO Jeffrey Kindler in an article about the cessation of clinical tests of the promising heart drug torcetrapib. As the WSJ sees it:

The debacle has revived doubts on Wall Street about whether Mr. Kindler is the right man to run the world’s largest pharmaceutical company. After all, he joined Pfizer only a few years ago, and before becoming CEO functioned only as general counsel. He won out over two industry veterans with deep experience to get the top job. Does he really have what it takes?

Just how stopping development of a drug because of deaths is a debacle will be left to the biotech or stock-picking bloggers out there. Perhaps someone at Pfizer had heard of Vioxx.

But most lawyers (and any GC) has to love the characterization of Mr. Kindler’s prior Pfizer job history as having “functioned only as general counsel.”

Somehow when US CEOs for decades came from finance or marketing or engineering, those disciplines were seen as good seasoning.

Mr. Kindler made a tough call. One driven by the high risks faced by big pharmas imposed by the FDA process, uneven law and gunslinger plaintiff attorneys. Just ask Merck over the aforementioned Vioxx.

Was his GC experience a liability in this case? I think not. I think it was a clear asset.

And, by the way, the real news is that the Pfizer legal department develops exceptional attorneys who deliver creative, bottom-line solutions.

Mere functioning? Hardly.

Google Splits…

December 4, 2006 | Filed Under Managing, In the News

… GC and CLO positions, that is.

Law.com reports that Google has hired a new general counsel and made current GC David Drummond chief legal officer.

Filling this new stand-alone GC position is John Kent Walker Jr., who was deputy GC of eBay.

While not common, this arrangement may be considered by larger, growing companies as they realize that legal is bigger than just the law. In addition, since Google pushes the envelope in certain emerging areas of the law, corporate and legal strategy are very much intertwined.

You can bet legal headhunters are taking note…