How General Counsels Drive the Legal Profession

Episode Notes

Transcript

Advertiser: Welcome to In-House Legal, where we cover a variety of the issues pertinent to the general counsel and in-house legal departments of small, midsized, and large organizations. Join host Randy Milch each month as he discusses the latest developments, trends and best practices for this very busy and often complicated area of law. You’re listening to Legal Talk Network.

Randy Milch: Hello, my name is Randy Milch and I’m the host of In-House Legal on the Legal Talk Network. I‘m honored and happy to have as a guest today, Bill Ide, one of the great leaders of the American Bar. Bill is currently a partner at the global law firm Dentons, and he has served as general counsel of Monsanto. But these are only two entries in a distinguished resume. He clerked for a future United States Attorney General, served as the president of the American Bar Association, was counsel to the U.S. Olympic committee, and has been and remains a director on a number of public company boards. He has also become a leading voice in corporate governance questions, a very important topic today. Bill, welcome to In-House Legal.

Bill Ide: Thank you, Randy, glad to be here.

Randy Milch: It’s a real pleasure to have you and you taking time from your busy schedule to be with me. Bill, let’s dive right in. Give us a flavor of one of the first big decisions you had to make here. And it was interesting, I read your bio. You were a UVA law graduate and you were debating whether to go into big law at the time, although it wasn’t quite as big as today or to go clerk for a federal judge. What kind of decision was that for you and how did you make that decision?

Bill Ide: What I found Randy – and I kind of moved from one place to another – it’s usually been from the gut. When I was honored to get an offer from a New York law firm after I clerked the second year, and yet, my gut said if my best friend was number one in our class, a smart guy, and he said I’m going to go down and clerk for a judge in the 5th Circuit. I’d just think that experience would round me out more before I started a private setup, that would make sense. And the 5th Circuit, now called the 11th, was the southeast and there was a lot going on with the Civil Rights Era there. So just something in me said this is something to do, you should do, and I went down and had an interview with Judge Bell and he has quite a captivating personality. So I made that leap and it turned out it transformed what I would have been a Wall Street lawyer commuting from Long Island, perhaps, and I ended up with a career in Atlanta. I’m glad I did.

Randy Milch: Tell us a little bit about the era of great public litigation over the integration questions and the segregation questions in the south. What kind of an atmosphere was it to clerk on the 5th Circuit at the time, given all the social tumel that was around the decisions those judges were making.

Bill Ide: I was raised in a segregated society, segregated school, segregated fountains. I never challenged it, I’m embarrassed to tell you that today, but that was the way the south was. I went to a small school and we had this group that wanted to invite Dr. King to come and ultimately he turned them down. But that’s the world I came from, and when I went down and clerked, my eyes were just opened. I could not believe the courage and the zest of these civil rights lawyers from the south and frankly, a lot had came down. And all of a sudden, the injustice, once they started educated, Brown V. Board of Education happened long before. But it was not until Dr. King did a march and police chief Bull Connor unleashed the dogs on public television. All of a sudden, everyone started seeing the injustice and it was magnificent how lawyers and judges transformed the social fabric of the south. It changed my life to be sitting in the courtroom watching all that happen. And quite frankly, the majority of southerners who had been looking the other way were reached by that leadership, and we had a few instances of violence but very little. And quite honestly, I think the south moved past some places in the north when you look at the Watts riots and things that happened later on.

Randy Milch: It is interesting to note, of course, that the judge you worked for and the other judges, they were hardly outsiders to the status quo. They were some of the top people, socially and intellectually of their era, and they seemed to move pretty quickly to right some of those wrongs.

Bill Ide: It was fascinating to watch the legal training judges. There were one or two district court judges. They were still utterly resistant and they ignored Brown v. Board of Education with Plessy v. Ferguson, but still a law. I mean I heard that, I heard that argument. But to get to your point, most of the judges came from the same condition as I did. They believed in the law so much that they wanted to do the right thing and then I think as they started seeing the injustices when the evidence came down, we just all were looking the other way. And that court process and litigation opened everybody’s eyes to what was really going on and what needed to be fixed.

Randy Milch: It’s a fascinating story and a fascinating time; I know it’s been written about. But what’s also interesting to me is it seems as though, you mentioned, you could have been another commuter lawyer here in Long Island coming into the city for big deals. And instead, it seems like this moved to clerk for judge – later, attorney general – Bell, further sealed the fate of you being a lawyer that stuck to the south. What was your next move after leaving the clerkship? It seemed like you stayed put right in Atlanta.

Bill Ide: I did, there was a lot later in my career. I commuted from Atlanta to St. Louis and Montana and ultimately New York. But the energy from the Civil Rights Movement brought the business community into – not under the ordinance of civil rights, but all of a sudden this we can have a dream, and Atlanta became a very vibrant and high energy city. So I went with King & Spalding which today is a huge firm. I was the 34th lawyer at the time, and tried cases for 3 or 4 years. Back then, young lawyers could try cases and argue with fellow attorneys. Then, Atlanta was audacious enough to say we’re going to have a rapid transit system, we’re going to be like New York and everyone else. And I rolled the dice. Again, this was the gut. I left King & Spalding, which was pretty secure, I could see where it was going, to join a little law firm that represented the Metropolitan Atlanta Rapid Transit Authority. It was going through referendum. If the referendum passed, I had this huge billion dollar capital program to work with. If it didn’t pass, I was going to be looking for the next job. And so there were 461 votes majority out of 110 cast. And then we had to recount them, they were paper ballots, and we recounted every single one of them and got up to 471. That gave me five years. When you do a bill with rapid transit in a city, you just deal with all the social fabric of the city. So again, it was dealing with the community, if you will. But it was a very intriguing, exciting time. We built our firm up to 30 and realized we were so dependant on one client that we went to a new strategy they merged with Kutak Rock out of Omaha. Bob Kutak was a leader in the American Bar who I met, and we believed in the city concept – this was in the 70s before you had that – and we built Kutak Rock up to 13 offices and 400 lawyers and I was vice chairman of the firm. So it’s just one thing that led to the other and I guess the one thing I would’ve done if I were young and do it over again, I would say, if you see an opportunity, take the risk. Go with your gut but don’t be a status quo because there’s constant change in the world and it’s the opportunities that come. You have to have risk to it but you have to have opportunity to it as well.

Randy Milch: I think your advice is incredibly well taken, Bill. I’ve always told folks, just like you did, that finding an opportunity and having the guts to jump at it are the things that lead you to new opportunities, new successes. Staying put can be a real death nail to having an interesting life. So Kutak was an interesting leader in the American Bar. Is he the one who brought you into the American Bar Association or whetted your interest in that organization?

Bill Ide: No, what happened was at King & Spalding, there were some great mentors and one was a guy named Kirk McAlpin, he was a fabulous lawyer, and I had gotten active in Georgia. Back then when you joined the law firms, they encourage going to Bar meetings, which was very broadening. You build a network but you also heard and saw how other people did things and I loved it. We created a statewide legal aid program, which I’m very proud of, when I first got involved with a majority of young lawyers. And then I started going to American Bar lawyers because of my King & Spalding mentor and started meeting there and I just found it so interesting to meet people from other parts of the world and other parts of the United States with different perspectives. So I got hooked and saw what lawyers collectively could do. They were working on legal services, they were working on access to justice . So that got me invested in that and I met Bob Kutak. A lot of wonderful people I met through Bar work, and as I emailed you, I just think lawyers have an obligation to do the right thing by working intellectually. And two, you do very well, because you do a lot, you meet people, you do that work. So the American Bar has been awfully great to me and I’m very fortunate to have been involved in it.

Randy Milch: Well, this of course culminated in your serving as president of the American Bar Association in ‘93 and ‘94. What would you say about your term in office? Did it match up to your expectations? Was it more duty than pleasure? When you look back on it now, how do you think about it?

Bill Ide: You talked about decisions and change. When I left the first law firm, King & Spalding, I couldn’t sleep for three nights before I made the decision. The change was sort of gut wrenching. The ABA, I got very active and all of a sudden it became clear that if I wanted to become president, I was going to need to be in a contested race. So I didn’t sleep for another three nights and I almost threw up twice that day. It was so emotional to me, and again, I said I want to take the risk. I may fall flat on my face. So the election process – and it was a contested election – it was a wonderful experience of working with people. So getting elected caused a coalition of people who we started talking about what I would like to do if I were president. They were supportive, so that’s sort of how I got there. A good description of the American Bar is if you were on San Francisco Bay and you saw this huge ship with all these lights and you say it’s magnificent and then you get close to it and you’d see it’s a thousand little boats with lights bumping into each other. So it’s slow moving in some ways, but it was a great experience because the Bar – not only the American Bar, state Bars, local Bars, because you work with all – they really are our justice system. If people think government and think and having office buildings where there are judges is the justice system, that’s not true. It’s the people that come and the culture that come and the lawyers that build up justice. But they have to have someone that’s constantly helping them shape and form the system all the way from ethics and disciplinary. Not only for lawyers, but for judges, but also to developing law and restatement of law. All of that is what the Bar does and it was very exciting. And even back then, 15 years ago when organization aspects were really coming into play and so many other parts that overlooked the United States and the American Bar, certainly, but then to be helpful in building rule of law. I was in 12 of the countries – Africa was a big one – trying to work and help spread the rule of law and share it with others.

Randy Milch: I think that you think that the American Bar Association still has a large role to play today in the legal business and legal environment that seems to be , in some respects, altering for the worse. Do you think it still can play a good role in leading the Bar toward greater social justice and those sorts of issues?

Bill Ide: I’m very concerned right now about where we are as a profession. We are the only profession really left standing that’s self-regulated. The accountants have lost it, the doctors have lost it. And I think too many lawyers don’t understand that they have this fantastic opportunity as lawyers, but also obligations as lawyers. And as the latter part, we’ve got to work harder on. I’m worried about bigger law firms becoming so commercial focused. You saw that come to play when there was a very strong movement to create a level of disciplinary practices. It’s gone all around to the rest of the world, accounting firms have acquired law firms, and there was a big effort to try and do that and it’s coming back. If that were to happen, then I think that the Bar would become very small and it would be sort of like the Bannisters in the UK. I think there’s a group of fiercely independent lawyers that will always understand that the justice system is competitive on them now. What I’m trying to say is if we don’t protect the judges, we don’t protect the system, then you go around to the rest of the world and you’ll see what happens. I spent a lot of time in the former Soviet countries, and their department of justice has jurisdiction over the courts; so it’s very, very easy for the government to control. And the John Adams of the world, or diplomatic figures, those are real. That’s what makes us different, and there are a lot of lawyers out there that would do that. So yes, the organized Bar has a critical role to play. I think we’ve got to get a sort of renaissance going to get lawyers to understand individually and collectively that they must spend time on the justice system. And true Bar association is part of that, because certainly you have to do it collectively and you can’t get it done individually.

Randy Milch: There are significant access to justice issues that we face here in this country, and we’ll get to those in a minute.

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Randy Milch: Welcome back to In-House Legal on the Legal Talk Network. I’m Randy Milch, and today we have Bill Ide, partner at Dentons and former general counsel of Monsanto with us. Bill, before we went off, we were talking a little bit about access to justice issues and the ABA. The current president of the ABA issued a report and he detailed some of the great divides in access to justice in the United States. 80% of the people who are poor and many others with moderate means do not get simple legal assistance. They need, in some states, 95% of the cases. In family courts, at least one party is not represented by counsel. And more disturbing, most disturbing perhaps, half of those who apply for legal aid, as a result of those items, are turned away because

legal aid organizations lack the resources. How do you think beyond the established Bar and the Bar associations we should make attempts to solve this access to justice issue?

Bill Ide: Well, ironically, just as we had this demand not being met, we have what one would say an oversupply of lawyers. Law graduates are having a much more difficult time finding jobs, and one of the things that’s being worked on which I think is fantastic is the idea of incubators that help law graduate, law students, modify their practice. Because not only is it the very poor that have lack of access, but frankly, it’s the middle income people also that can’t afford. And we can use technology at a much better way than what we’re doing. So I think we can get some of this through lawyers. Law schools won’t teach how to go out and set up a practice. And there are a lot of wonderful people that want to go back to smaller communities and just serve people, which is what law is all about. It’s really a calling, but they don’t have the tools. That’s one thing that will be very important and I think courts and Bar associations are going to need to take a hard look at are there just as we finally can prepare legals as a way to reduce cost. Are there ways to do legal tech admissions or some equivalent, because there’s a lot of money going into access right now to the Legalzoom and that kind of thing. But the money isn’t going to lawyers and the Bar associations. And the ABA is working very hard to rethink all of this.

Randy Milch: There’s a lot more to come, Bill, and I know that you’ll be integrally involved in helping rethink these issues. You had a stint outside of the private practice as a general counsel of Monsanto. I take it this was another one of your gut wrenching decisions that you considered and you made the leap. Give me an idea. This was a while ago, you retired from Monsanto in 2000 and went back to private practice, but you stayed very involved with general counsel’s corporate decision making. Do you see the role of the general counsel as changing at all between the time you were general counsel at Monsanto at the end of the ‘90’s to today?

Bill Ide: I do. Honestly, I never thought that because of my American Bar exposure, I was called and asked if I would consider Monsanto. It was in St. Louis and I was in Atlanta and quite honestly, I went out thinking there’s no way I’d ever do this but it would be nice to meet the people and maybe I’ll have a new car. But then when I met the people in the company, I thought wow, this is a world I don’t even really know, but it’s powerful. And of course, Randy, you’ve been inside. And I thought I could learn so much so that’s why I went. And I’m a big believer and I saw it with some general counsels then, but I see in many more now, that a lot of the big firm leadership used to drive a lot of the profession going and how it’s going to be. I think general counsels are going to drive it much more now. And they have the perspective that’s needed and they have the resources needed. And quite honestly, they are in the leadership positions because big law firms are going to listen to their clients, and I see that growing. And I’m seeing the caliber of people that become general counsels become much more of a broader sect than initially. And some time passed, people would come up to the company but they were more technical in certain areas and you can’t do that anymore as a general counsel for a large corporate company, because you’re dealing with all the stakeholders and that’s really the general counsel’s main job.

Randy Milch: Exactly, I think you’re exactly right, Bill. People frequently say that any public corporation has stakeholders that range from the employees to the shareholders to regulators, to society at large. There’s no company that has a god given right to exist. So I agree with you, the general counsel has to be among those principally responsible for ensuring that all of those stakeholders are at least respected as critical decisions come up. Even today, today is the day that the CEO of Volkswagen had to step down because of the apparent problems with their admissions testing. Would have been quite a time to be the general counsel of Volkswagen as they’re dealing with that. And in the future, those sorts of issues with that company and another company are going to be coming up, so it’s quite a set of issues to deal with. But let’s talking about the general counsel and the board for a second. Because I know that you spend a lot of time, both as a public company director and as a counselor to public companies. How do you see the board aspect of the general counsel’s role evolving along with board governance questions?

Bill Ide: Well, after WorldCom, Enron, and the great failures was at play, there was a great deal of concern and criticism that lawyers had not properly protected the companies. And that even led to where lawyers had to take it up a chain to take it out. And the ABA created a taskforce which I served on to say how did WorldCom, Enron happen and where were the lawyers and what are the issues. And out of that, one of the key findings – which frankly I was the advocate for – was to say the general counsel represents the entity. The general counsel does not represent the board. The general counsel does not represent management, it represents entity. And the general counsel is driven not only by what the law is but also by their ethical standards for the profession. And I keep reminding – when I speak to lawyers in-house – I say the key question is are you an employee who happens to be an employee or are you a lawyer that happens to be an employee, because it’s a huge distinction. And one of the things that I’ve always said to myself – and it’s not easy – is you’ve always got to deal in the walk. If you’re in a company and you think something’s wrong and you’re not listening to it, you’ve got to leave. So when you deal with the board, and my question always is how many times do you round the CEO with the board without the CEO knowing it and the answer is once, because then you’d be fired. But you do hae that delegate, you are not managed but you need to be with management and then board dynamics are fascinating and you’ve seen that, Randy. Because people have come together in saying you’re board so often that the time has not been spent in them bonding together and so they’re also nervously trying to figure out where will I come out on this. So the general counsel has this obligation in my view as the entity to help steer, and that’s the key, very subtly. So there’s a silent hand working and I’ve seen general counsels be too obvious in what they’re trying to do and be asked to leave. So it’s a client relationship thing, in my view. And the good general counsels do it very well. They work with the CEO because as you know, the CEO is so dominant in a public company, and hopefully then for the CEO, everything’s presented the right way to the board. But at the same time, they make sure that the board asks the right questions and it’s been so much easier than it was before. Before it was clearly an imperial CEO. Now you have protocols with the directors that make it easier with the various committees in which some of the lawyers will say what do I do. That’s one of the great art forms. The real, true general counsel that converses a lot can do that very skillfully, but it is very challenging.

Randy Milch: As a public company director yourself, how do you approach the general counsels of those companies? Do you sit back? Do you let them approach you? Are you always concerned that you’ll not be seen as a shadow GC?

Bill Ide: That is a fair question. But what I did, before I went for a board meeting, you get all these materials and if you get a CFO that sends you the numbers, I want to know what’s behind the numbers. So I would call the CFO and say let’s just talk about that. So it was just for an education kind of thing for me, and then try and not always be respectful for GC, never look like Ghandi and a lawyer in the room. But frankly, both public boards I was on, the GC and the CEO or chair, it’s still the real hard tricky ones.

Randy Milch: Let’s talk for a second about the direction you see board governance and corporate governance headed. I know that you work as the chair of the advisory board of the conference board’s governance center. And in that role, I know you spent a good deal of time thinking through governance questions for the corporate sector by itself. We’re in an age of activism. We have a presidential candidate suggesting changes to the law to stop short termism. Where do you see these sort of issues headed today?

Bill Ide: Well, what has happened – and I’m very concerned – market forces have moved that have all of their relationships between boards and shareholders. And it’s been without any policy recognition that there are issues and it’s been more marketplace than it’s started right after. Corporations had a tremendous loss of trust. And you can imagine if you were running a mutual fund, you would say how could you let that happen and on a world economy that they’d know about it. And one by one, those defenses have been removed and broke the dealer. So today there is much more opportunity for shareholders, sort of directly intervened and it’s still at play. I think the failure of companies to get ahead is again a loss of trust, which then leads the pendulum that starts swinging. So what we’ve been working on the commerce board, which we started about 5 years ago, was why all of a sudden our governance questions have to go through a shareholder instead of in the old days going through investor relations. And in the old days, if you didn’t like what you saw, you just walk and sell the stock. You can’t do that today with index funds. And they all say we’re not leaving until you’ve got a change. But what has happened is that money now has gone to hedge funds, and this I find somewhat disturbing, who then come in and they demand. And too often, when you study that – and there’s debate on both sides of this – but I think it’s going to show that the decision, the act of the funds are pushing so rapidly, may pop the stock initially, but five years later, you probably wouldn’t want to make that decision if you look back. So I worry about opportunists who come in pop the stock, they sell, they’re gone. That times the short termism to long termism. And I face that on one of the boards we’re on, we turned down the act because we wanted to make some investments that would decrease earnings in the first year but we really saw that five years out to be much stronger. But this policy on this is just sort of embalming and I find that very troublesome. The other thing that’s the key ingredient is this activity’s encouraged by shareholder values should be the dominant metric on the performance of companies which gets away from stakeholder. And many of us believe that the companies have the social life in our country to operate as public companies under a stakeholder mindset. Shareholders are a key part, employees are a key part, the public’s a key part. And that debate, we’ll see. I don’t know whether it’s going to come up in the next election, but really, the long term funds need to sit down with boards and we need to hae a real resolution of this, because it’s not a healthy situation right now, in my view.

Randy Milch: Well, Bill, thank you very much for spending time with me today on In-House Legal, it’s been hugely informative.

Bill Ide: Randy, thank you very much. I just think when lawyers talk together it’s a good thing because there’s no more noble profession and I’m just honored that you elt me be a part of this conversation.

Randy Milch: It’s been a real pleasure. And I would like to thank all of you who have listened to our podcast today. For all of you listeners who would like more information about what you’ve heard today, please visit www.LegalTalkNetwork.com. Or you can also follow us on iTunes, RSS, Twitter, and Facebook. That brings us to the end of our show. I’m Randy Milch, thank you for listening and please join us next time for another great episode of In-House Legal.

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