Small Successes: 10 GCs prove size doesn't matter

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Ask most general counsel how they do it, and they tend to praise the teams of in-house lawyers supporting them. But every day, GCs across the country go it alone or get it done with just one other in-house lawyer and, if they're lucky, a paralegal here and there. Some may rely on a strong outside team, but many strive to take on as much as they can--which, in these economic times, is a cost-saving inspiration and a study in efficiency for all legal departments. Herein, 10 small department or solo general counsel from an array of industries share the joys and struggles of their jobs.

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Manik Rath

It may only have two in-house lawyers, but LMI's legal department not only runs smoothly, it also boasts a healthy in-house pro bono program. That's thanks to Manik Rath, LMI's vice president, general counsel and corporate secretary.

When Rath joined the non-profit government consultancy four years ago, he was the organization's only in-house lawyer--replacing its former GC, who retired.

Rath gained experience representing government contractors while working at law firms. As LMI's solo practitioner, he handles transactions, governance issues, mergers and acquisitions, employment, IP, tax and real estate matters--to name a few. As the organization began to grow, he hired a second lawyer. But still, Rath runs a tight ship.

"We use outside counsel when we need unique expertise, but we try to do the majority of the work in-house," Rath says. "Ultimately, the success of every matter is our responsibility.

Despite limited time and resources, Rath is committed to giving back. "I came here as the general counsel, so I thought it was my responsibility to incorporate pro bono work into the legal department," he says.

Because LMI's legal department is so small, it isn't well suited to handle time-sensitive work. So with the full support of LMI's CEO, the two lawyers advise non-profit organizations--a practice that allows them to further hone their legal skills while dealing with areas of law LMI would handle anyway.

Rath, who--through his vice president and corporate secretary responsibilities--has 40 direct-reports throughout the organization, says he's constantly focused on adding value to his enterprise.

"By being business oriented we can have a big impact on the company," he says. "Business clients appreciate a legal department that is focused on the business objectives. Once they recognize that, they will come to you more frequently. And that enables a small department to have a huge impact."

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Nancy Dawes

For Nancy Dawes, becoming general counsel of New York-based Five Star Electric was both familiar and foreign. She had worked with similar legal issues in the transit industry, where she spent most of her career leading up to the position with Five Star, an electrical construction contractor. But she also was used to being a part of a larger legal team--and when she joined Five Star she was its first and only in-house lawyer.

Initially, the company had no programs or policies in place, which created a welcome challenge for Dawes. "I really needed to come in using my background and set up these corporate policies," she explains. Dawes spent much of her time in the beginning working on new employment and governance policies--among many others.

Getting her arms around the corporate culture was Dawes' next step. Five Star has seen rapid growth in the past 10 years--going from only 15 employees in the late 1990s to more than 1,200 today.

"It was a challenge to get this small family business to look at the big picture," she explains. "While they're excellent at making it happen constructionwise, my job is to be protective and conservative."

Although she doesn't have another lawyer working with her, Dawes still consults with her legal peers. "I have close relationships with former colleagues," she says. "I have begun reaching out more with networking groups. And I go to outside resources for basic legal help as well."

Dawes also is very active in pro bono work, which has been close to her heart since she first began practicing law nearly two decades ago. Over the years she has served as a small claims court arbitrator and editor of the New York Women's Bar Association's newsletter. This year, she plans to take a teaching position on a pro bono basis.

Matt Kendrick

Matt Kendrick has been a one-man legal department for three different companies over 15 years. No doubt, he has plenty of experience managing a wide range of legal issues. But he faces new challenges in his current post as a general counsel in an industry in crisis.

A year ago, Kendrick left his position as general counsel of Mitsubishi Lithographic Presses in Chicago and joined Mercedes-Benz. Based in Vance, Ala., at the German car legend's only U.S. automobile manufacturing plant, Kendrick oversees labor and employment issues arising from 3,000-plus workers, who produce SUVs shipped to 135 countries. While that could be a full-time job in itself--particularly in this time of downsizing--Kendrick also handles transactional work, supplier contracts and issues involving quality, customs, tax, product liability and intellectual property. He serves on the U.S. subsidiary's board of directors and works as the local compliance manager, too.

But far from feeling overwhelmed, Kendrick welcomes the opportunity to help guide the company through difficult times.

"As a professional member of the management team, when you are involved with a changing environment as the auto industry is, it is very rewarding," he says. "The natural human tendency is to be a bit adverse to change. In today's environment, if you don't change, you may not be there tomorrow."

Change for Mercedes-Benz U.S. has meant reducing the workforce by 10 to 15 percent through a voluntary separation program, cutting temporary workers and squeezing other costs.

"For an organization like Mercedes-Benz, which had 15 years of growth here in Alabama, it's been a paradigm shift over the past year," Kendrick says.

As the only lawyer, Kendrick says he benefits from having broad exposure throughout the company. But he acknowledges that "nobody can be a jack of all trades. Sometimes you are faced with things you may not know a lot about, so you have to know where to go for help."

For Kendrick, that means consulting the Mercedes-Benz legal team in Germany. He also calls on outside counsel for advice, but does not substitute that for his own judgment based on his insider's understanding of the company.

"Outside counsel can give a legal opinion; inside counsel needs to give a realistic opinion," he says.

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William Leatherberry

Few people claim the title of general counsel before their 40th birthday, particularly at mid-sized and large public companies. But Bill Leatherberry did just that in April, moving into the GC role at Century Aluminum after five years working on securities, mergers and acquisitions, and financing matters for the Monterey, Calif.-based company, which posed 2008 revenues of $1.97 billion. And he is gratified by the appointment.

"I'm proud that it was recognized that I had the capacity to take on this position at this company," he says. "I'm proud that what I have achieved and accomplished was recognized, so age did not really become a factor and merits were rewarded."

Leatherberry worked at a law firm doing M&A and securities work, and in-house at VarTec Telecom, a privately held company, before joining Century after VarTec filed for Chapter 11 bankruptcy in 2004. He sees both experiences as being key to his success.

"Outside law firm practice is essential because it develops a work ethic, a sense of quality, which is hard to replicate," he says. "And having an in-house role, regardless of where you want to end up, is equally important because it gives you an appreciation of the political dynamic in-house lawyers face which you don't always see when you are representing them from the outside. So I have been very fortunate that my career took me to an in-house role [at VarTec]. It allowed me to understand and start to appreciate the various roles that an in-house lawyer plays."

Leatherberry has one other lawyer in his department but feels stretched thin--the main disadvantage to small legal department life, he says.

"There is instantaneous access to the legal department," he says. "Everything to those clients is an urgent matter, so you have to be able to effectively communicate with them and manage their expectations."

A key challenge in managing those expectations is determining which matters justify the expense of being referred to an outside firm.

"The hardest thing for small legal departments to do is balance expectations with expense," he says. "Getting it right is a challenge because every dollar you put toward an outside law firm is an expense to the company."

While he draws on outside counsel to handle matters beyond his areas of expertise, he feels constantly challenged to expand his knowledge of the law through attending CLE courses and reading legal periodicals.

"You act as an intermediary between your outside lawyers and your senior managers-- they want you to act as a filter," he adds. "And you can't do that if you don't understand what you are dealing with. So you have to be deep in a large number of areas of practice."

On the positive side, he relishes his role because it allows him to stay involved in all aspects of the business.

"We are involved in every substantive decision-making process," he says. "So it gives you a sense of ownership and responsibility that would not necessarily be the case if we had 20 other lawyers running around here."

Rick Koske

Rick Koske spent 11 years as an electrical engineer before he went to law school to become an intellectual property lawyer. Later in his legal career, he took a break to try his hand at product marketing. In between, he worked in a law firm and as chief intellectual property counsel at Fluke Corp., handling a variety of acquisitions, international contracts, IP disputes and litigation issues.

These diverse work experiences give Koske valuable perspectives in his role as the first general counsel of Verathon Inc., a Bothell, Wash.-based medical device company. He can draw on his technical expertise when he sits down with the engineering group. He can relate to the problems faced by the marketing department. And he understands the financial issues related to litigation. Still, he acknowledges the challenges of being a one-person legal department.

"The biggest challenge--it's the breadth of the demands," he says. "Verathon makes medical devices, so you have FDA rules and the different language of medical technology. The company has grown into a global presence, so I am always concerned that we remain compliant in areas of Foreign Corrupt Practices Act and that corporate structure is what it should be from a tax perspective. The company has gone from small to $100 million in revenues with a global presence and all the good and bad that go with it."

Koske says when he arrived one year ago, Verathon managers recognized the need for in-house legal help but weren't sure how to use him. So he soon realized the importance of being assertive.

"If you are the first in-house counsel, either something very bad has happened in the past or the legal problems have just gotten complex enough so the business people say, 'We can't handle it anymore,'" he says. "They are bringing you in because they need you, but they don't know how to use you yet. Don't expect the leaders in the business to lay out what they want you to do, because they don't know. You have to assert yourself."

He also soon realized that because Verathon had been handling some legal matters on its own, he had to build relationships so employees would reach out to him for things like crafting a contract and bring potential issues to him sooner rather than later. The fact that they are now doing so gives him a sense of accomplishment.

In the first six months, one way he asserted himself was by conducting training on confidentiality issues. "It was received very well, and I have seen a change in the way people act with regard to our proprietary information," he says.

Koske acknowledges that he could use more help as he moves into his next priority: developing compliance and corporate governance processes.

"The key is, if you add one person, that is a 100 percent increase," he says. "I have to make sure I think it through so I have the right kind of person and structure it properly, because it could be more work than it's worth if I don't do it properly."

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Barbara Kolsun

What does a fashion law veteran do on her lunch break? Barbara Kolsun, general counsel of shoe legend Stuart Weitzman, comes this close to fulfilling the outsider's fantasy of a fashion executive before extinguishing it with certainty. "I went to Bergdorf's today during lunch for half-an-hour," she begins, "and I couldn't stand it. I really did fall into fashion law."

She may not like shopping, but fashion is clearly Kolsun's thing. Her resume reads like a stroll through a department store. Early in her legal career, while doing IP work at a law firm that happened to count Ralph Lauren as a client, Kolsun found her niche. Next she became outside counsel to Tommy Hilfiger. Armed with her private practice experience, she took her first in-house job handling IP at Calvin Klein Jeans (the designer's denim licensee, later acquired by Warnaco) and at home textile company Westpoint Stevens. In recent years, Kolsun has made her name fighting fakes as GC--and sole in-house lawyer--first at Kate Spade, then at 7 for All Mankind. A 2002 Spade-era New York Times profile called her "a pit bull who lunges at brand counterfeiters."

The problem is less apparent at Stuart Weitzman, Kolsun's new perch--shoes don't provide the easy manufacturing process that has made handbags and denim prime targets for counterfeiting. But Kolsun still leads the charge when it comes to protecting company designs. She goes further than most in her field, filing not just for copyright protection over shoe designs but also for design patents, which few fashion companies pursue due to their high expense.

"Because we've taken the time to obtain the protection, when somebody knocks us off we can be successful in stopping them," Kolsun says. "It's fun when you work for a creative company to be able to enforce your designs like that." Kolsun eschews unnecessary use of outside counsel, instead taking a do-it-yourself attitude. Hands-on and free of pretension, she doesn't even have a paralegal or secretary. "With a computer, we don't need people to type our letters anymore," she explains, adding that she relies on law school interns and "a handful" of outside counsel. Instead of farming out licensing, distribution and employment agreements, she drafts most of them herself. Even rarer, she handles all trademark prosecution in-house.

"I think I do more than most people--because I've been around longer than most people. ... I like working in a small department, frankly," she says. "If something has to be turned around quickly, I can do it."

That's a setup that works for her legal invoices as well. Kolsun is no longer tackling fake bags on Canal Street--these days she aims that fire squarely at controlling outside legal spending.

"When you're a small entrepreneurial fashion company, it's very easy to be absolutely charmed by outside law firms because no one's reviewing the bill," Kolsun says. "No one's saying, 'Wait a minute, it couldn't have taken you that long to do this.' I'm absolutely brutal on our outside counsel, but the ones I like and use over and over again are the ones who send fair bills."

Howard Malovany

In June, CNN called Green Mountain Coffee Roasters (GMCR) "recession-defiant."

The Waterbury, Vt.-based coffee company supplies McDonald's with coffee, sells brewers and coffee at Wal-Mart stores throughout the U.S. and in 2006 acquired Keurig, the maker of increasingly popular single coffee serving "K-Cups." In the past year, GMCR's stock price increased 120 percent--almost unheard of in the current economy.

Howard Malovany joined the company as its first general counsel in February, during this period of massive expansion. Previously, he worked as the first GC at Wm. Wrigley Jr. Co. in Chicago, where he built the department from just himself to 28 attorneys. GMCR's CEO and board of directors want to develop a strong, sizable legal department--and that's where Malovany fits in.

"Part of the reason they hired me was because I had [built a legal department from scratch] before," he says. "I have support from the other managers, the CEO and the board. Part of the job description was to grow the department."

By the end of the calendar year, Malovany plans to have at least one more lawyer in Vermont as well as in Redding, Mass., where Keurig and another in-house lawyer are already based.

Although helping build a new legal department is familiar territory to Malovany, working at such a rapidly growing enterprise is a new challenge.

"The biggest differences between this job and the job I had at Wrigley are the disclosure issues and the contact with investment communities that we have on a regular basis," he says. "As a growth stock, things tend to change rapidly. So people who follow us tend to have a strong appetite for information."

But there are several continually relevant tips Malovany has learned from more than 30 years of practicing law--a big chunk of the time in small departments.

"Don't ever be afraid to say 'I don't know,'" he says. "Make sure your Rolodex is up to date so you know who to call. You can't possibly know everything, so you need to know where to go to get what you don't know. Develop a network of other GCs who you can contact. It usually comes free, other than having an obligation to give it back to them."

In small departments, time is always in short supply, but Malovany feels an extra pinch because he is GMCR's first GC. So he's constantly deciding which work to keep in-house. His main factors are time constraints, cost, risk and competence.

"I'm good at some things, and I'm not good at others," he says. "The things I'm not good at, I have somebody else help me with."

Whether he is dealing with companywide issues with the CFO and CEO, negotiating supply agreements or thinking about new policies, Malovany's work runs the gamut.

"There is no regular day," he says.

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Bradley Thies

Brad Thies has seen the good, the bad and the ugly of running a small legal department for a global company. Being effective in the job, he believes, is about being accessible.

"For us that means being accessible around the world," he says. "Sometimes that means late nights and early mornings. Sometimes it means traveling coach. Sometimes it means eating worms. It is important to be in the place where the client is and make them understand that you will come to them and you will be responsive to their needs."

Thies is on his second round as general counsel of FEI Co., a Hillsboro, Ore.-based manufacturer of electron microscopes. A veteran of two law firms, Thies held GC posts for a restaurant company and an enterprise software company prior to joining FEI for the first time in 1999. After a year, Webtrends--then a hot, publicly held Internet company--lured him away. But soon Webtrends was sold and FEI wanted him back, so Thies rejoined the company in 2001. "I've been here ever since, so it must have been the right decision," he says.

The prior GC of FEI wasn't interested in tackling global legal issues, but Thies changed that. "We have built a real general counsel function that tries to manage risk across the enterprise," he says. That means staying abreast of legal developments in the 25 countries where FEI does direct business as well as hiring outside firms with global savvy.

With such far-flung operations, and with 1,300 of the company's 1,800 employees overseas, Foreign Corrupt Practices Act issues are one of Thies' priorities. He developed a multilingual online training program on the company's code of conduct--and did it cost effectively by recruiting headquarters staffers fluent in Dutch, Czech, German and Chinese to translate the code into their language and do voiceovers for the slide show.

"That was extremely well received because before it was only in English, and although English is the official language of the company, it is very helpful to have it in the native language of our employees," he says.

At FEI, which produces electron optics and focused ion beam technologies, including the world's most powerful commercially available microscope, Thies also is proud of developing an IP strategy and processes.

"When I got here, [we had] a haphazard collection of patents administered by a bunch of technologists who were skeptical about the value of patenting," he says. "We still have work to do, but we've made improvements."

Thies has one other attorney and two paralegals in his department and says benchmarking shows he runs a lean department for a company with $600 million in revenues. If the company realizes its growth objectives, he can see his department growing correspondingly--something that will have its pros and cons.

"The advantages of being small are that you can be very flexible," he says. "You can work closely as a team. You are forced to address a huge range of issues, which keeps the work more interesting. But you can't cover the board as much as you would like to. You are forced to make more choices and to leave some things behind."

Paul Murphy

After more than 30 years in private practice, health care attorney Paul Murphy ventured in-house for the first time last year, becoming solo general counsel at LibertyHealth. He came well prepared. His experience--almost solely in boutique health care law firms and a short spell as a solo practitioner--has uniquely trained him for the task of single-handedly running legal affairs for a health system encompassing two New Jersey hospitals.

So how's the view from in-house? Busy, for one thing. Murphy shuts down any talk of escaping law firm life for better hours. "That's dead wrong, from my experience, especially being a solo practitioner within the health care system," he says. "I work very long hours, probably longer than I did in private practice."

Like many industries, health care is dealing with tough times. "Everybody in the industry is running extremely tight margins, many hospitals are losing money, and they need to economize as much as possible," Murphy says. The effect on LibertyHealth's legal spend means Murphy doesn't have the opportunity to hire additional in-house lawyers and must carefully manage the outside lawyers. This often leads to doing a lot of the work himself. And it means long hours.

Murphy takes it in stride. "So long as you are only modestly overburdened, you're OK, meaning that you have a lot more to do than you really could be reasonably expected to do, but it's not overwhelming--then it's fine," he says.

Instead of being a multitasker, Murphy aims for efficiency by tackling one task at a time and then moving quickly to the next. He's found support from elsewhere within the company by asking LibertyHealth colleagues to help him concentrate on the legal questions. For example, if he's asked to review a software licensing agreement, it's brought to him with all the business-side analysis already done--he need only review for legal compliance. Using the software example, Murphy has deployed a checklist the IT department completes before sending him any licensing agreements.

"Part of what I do to get my job done is to try to educate the people I work with about how best to use my time. That's an ongoing process," Murphy says. "It's been well received because people understand that it actually helps things get done more quickly."

Also driving him through the hard work is his love of the health care field and the great diversity of issues he deals with every day. A typical day might mean reviewing financial statements with the CFO before heading off to consult with the chief nursing officer.

"They all have different interests and different skills," Murphy says. "It's a very rich and rewarding environment. It's also a lot of work."

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Karen Guest

Given the shifting state of the newspaper industry, Karen Guest, the chief legal officer of newspaper publisher Lee Enterprises Inc., has a lot on her plate these days. Much of her work stems from newspapers trying to maintain profits while also updating their online presences to take advantage of cutting-edge technology. She also deals with a multitude of employment matters, litigation and, most frequently, contracts and licensing issues.

"Newspapers are very involved in setting up and making their Web sites more interactive and effective for consumers, so the sheer number of licensing agreements coming through is pretty high," Guest explains.

For example, Guest has worked with sports leagues, such as the NFL, MLB and state collegiate associations, working out permissions for the newspapers to post video from games on the Web.

With the myriad issues she faces, determining which work to keep in-house is a constant task. It's especially pressing because Lee, which owns 49 daily newspapers and 300 weekly newspapers, has only one other in-house attorney. During her first year on the job, Guest cut $750,000 from the legal budget by bringing work in-house.

"Some of it is timing," Guest says about how she decides which work needs outside help. "[And] a lot of it is just practicality."

If she is buried with work and something needs to get done quickly, she might hire a firm. Or if she needs very specific knowledge, such as a real estate expert in Minnesota (the company recently sold a printing facility in that state), she'll find outside counsel.

Still, she says the biggest challenge of leading a small department is finding a way to get all the work done, especially because she is "constantly bombarded with cost-reduction efforts."

Unfortunately, Guest's department has recently needed to give up association memberships, drop subscriptions and attend fewer continuing legal education programs in order to save money.

In the midst of sacrifices, she says a few qualities become even more important to leading a small department.

"You have to react very quickly. You have to trust your instincts. When you're a smaller department, people expect you to act more quickly than when you're at IBM."

However, Guest appreciates the benefits of working on a two-person team.

"It's incredibly important to have a good working relationship with the business people, and it's harder to do in a large legal department," she says.

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