Louise Parent began her career in 1975 at the law firm of Donovan Leisure Newton & Irvine...
Randy Milch is the former executive vice president and general counsel of Verizon Communications. Mr. Milch has...
Louise Parent served as general counsel and executive vice president of American Express from 1993 until 2013 and has since been Of Counsel at the firm of Cleary Gottlieb Steen & Hamilton LLP. For eight years at AMEX, Parent worked to prevent and remove global anti-competitive barriers caused by Visa and Mastercard rules. But before that, she had a strategic path to general counsel, one that did not always involve vertical promotion or even a strictly legal direction.
In this episode of In-House Legal, Randy Milch interviews Louise Parent about her ambitious path to general counsel of AMEX, how she successfully dealt with AMEX’s battle with Visa and Mastercard in the U.S., Europe, and Latin America, and how the role of general counsel has changed since 1993. She discusses how she started in state legislative affairs but migrated to typical corporate practice by taking on more complicated tasks as available. Parent then decided to become general counsel of a subsidiary, at best a lateral move. In that position, however, she learned to show value to the sales process as a lawyer, she learned how to work with an executive team, and was confronted with a wide variety of legal issues. After discussing the litigation with Visa and Mastercard, Parent then reveals how technology and regulation has changed the role of a general counsel. It is now imperative to become involved in the business as a whole, be familiar with the global legal climate, and understand the expectations of regulators.
Louise Parent is Of Counsel at the firm of Cleary Gottlieb Steen & Hamilton LLP. She joined American Express in 1977 and was General Counsel and Executive Vice President from 1993 to 2013. Louise is also a member of the Supervisory Board of Deutsche Bank AG, and the director of Zoetis Inc., a multi-billion dollar animal health company. Louise has bought, sold, litigated, and counseled at the highest levels and has an interesting perspective from both sides of the big law divide.
In-House Legal: Vertical Promotion is Not Always the Route to General Counsel – 5/5/2015
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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 today to have as a guest, Louise Parent. Louis was for over two decades the General Counsel at American Express. She has since 2014 been of counsel at the firm of Cleary Gottlieb and so can give us an interesting perspective from both sides of the big law divide. Louise is also a member of the Supervisory Board of Deutsche Bank, and a director of Zoetis Inc., a multi-billion dollar animal health company. Louise has bought, sold, litigated, and counseled at the highest levels, so I know we’ll have an interesting conversation today. Louise, thank you very much for being with us on In-House Legal.
Louise Parent: It’s a pleasure.
Randy Milch: Louise, let me start and take you back to your college days. It’s the early 70’s, it’s Smith, what leads you to go to law school?
Louise Parent: So I actually think there’s a great connection between education and the profession. As you said, Randy, this was the early 70’s, the women’s movement was really in full flower and at Smith, the ethos was women could do anything. And it was really at Smith that I understood and thought about what I was going to do with my life and I was encouraged to think ambitiously and broadly, and that’s where I made the decision to go to law school. I really didn’t have a lot of role models as a young girl growing up in a small town in Connecticut. There was one woman who was a professional and she was a lawyer, and another woman who was a professional and she was a doctor. And there was no chance I was going to medical school, so law was it for me.
Randy Milch: Well that’s good enough. So you didn’t have what I had which was a mother who went to her grave wishing you had gone to medical school, I take it.
Louise Parent: No, not at all.
Randy Milch: Well that’s interesting. So you went to Georgetown law school and then it was off to Donovan Leisure. What prompted you to come back to NEw York and go into a litigation firm like Donovan?
Louise Parent: Well although I had a great experience at Georgetown, I was there during the Watergate era. And even though I was a poor law student, I could afford a subscription to Washington Post and read about what was going on. I could actually go to Judge Sirica’s courtroom and listen to Senator Ervin’s hearings on the hill; it was a fabulous time to be in D.C. But my roots were really in New York and I knew I didn’t want to practice administrative law so New York made sense. Donovan Leisure was a great firm and I thought that was a good place for me to good started.
Randy Milch: You know we have Donovan in common, I was a partner at Donovan for a short while, a little while after you left. And it was a great firm but it sounds like Donovan, if anything, convinced you that you didn’t want to be a litigator.
Louise Parent: Yeah, it did actually. Of course, this was a long time ago, there were no women partners at Donovan Leisure, it was heavily litigation-orientated as you said, and I quickly realized that I was a very extroverted person and I really thought that an in-house environment would allow me to spend a lot more of my time with the clients. So I made the decision very early on in my career to switch in-house. And just about the time that I was thinking of making the move, I got a call from somebody from American Express, which was actually was in the legislative affairs area where I knew I was going to rely on oral advocacy and be deeply involved in the business and I thought that was going to be a good step for me.
Randy Milch: Were you at all concerned that moving over to state legislative affairs was going to be a detour out of the law at the time or did that occur to you at the time?
Louise Parent: I wasn’t thinking that far ahead, I just knew that it was going to be a good change for me and I figured once I got inside American Express I would work to find the path forward and that’s actually what happened.
Randy Milch: I think that’s a valuable lesson if I could divert for a second. I’ve always told folks thinking about going in-house to worry less about where you start in-house and more about the nature of the place you go to.
Louise Parent: I think that’s exactly right.
Randy Milch: A meritocracy, you can do anything in, and doesn’t do to limit your opportunities by being too hard on yourself about your first job.
Louise Parent: I think that’s absolutely right and I would also say that one thing that makes an in-house lawyer successful is an interest in and commitment to the business. And so if you are presented with the opportunity to work in a business that really interests you and intrigues you, then I couldn’t agree with you more. I think the best thing to do is to find a point of entry, not be too picky about it and just feel confident that you can navigate your way through and continue to get opportunities to grow and advance once you’re part of the team.
Randy Milch: When did you transition into a strictly legal job with AmEx? How long did that take?
Louise Parent: Actually, what happened is probably after two years or so, I recognized that there were more things that I wanted to take on so I kind of morphed into a SEC and corporate M&A lawyer and I found that in-house there’s always more work to be done than there are necessarily people to do it. So that if you’re prepared to volunteer for something and you’re prepared to say I’ll take that on, chances are you’re going to have the opportunity to do that. So I gradually migrated out of the state legislative affairs area and into the typical corporate SEC and M&A kind of practice.
Randy Milch: At AmEx was the M&A practice a little bit rarified in the sense that you got to hobnob with the most senior folks in the company?
Louise Parent: Yes, it was, actually, it was great. American Express was building a very strong and diversified financial services supermarket in those days and I had some really iconic clients, including Jim Robinson and Sandy Weill. And you did have the opportunity to be and work alongside with the highest levels of business people as you were pulling together these mergers and acquisitions. So it was a very heady time and very exciting time to be practicing law there.
Randy Milch: So at a certain point though, Louise, you decided that the M&A, despite the fact that it got you face time with the bigwigs, it might not be the route to the top. Tell me about the decision you made later on to divert away from M&A
Louise Parent: Yes, thanks for asking. At some point in time I did, I decided to become the general counsel of one of our subsidiaries and it was called the Information Services Company of American Express, which later was known as First Data which became a public company and is now private again. This was not an intuitive career move, it was at best a lateral move. The Information Services business was not the core business of American Express. The people I was going to be working with, my clients, were not going to be the next CEOs of American Express. And the common perception of the legal work that was done at Information Services was that it wasn’t very sophisticated, it was kind of standard form of agreements and the like. And so many people thought that it was not a smart move for me to take the job but actually it was a great move for me. I learned how to lawyer a salesforce, which is very, very different from being an M&A lawyer. I learned how to insinuate myself into a situation to be accepted as adding value to the sales process. I learned how to be a part of an executive team of a business. And I think more importantly, honestly from the point of view of my career progression, I was confronted with a wide variety of legal issues, some of which were in my subject matter expertise, many of which were not, because I was the general counsel. So I learned to develop some intuition to ferret out and understand legal issues early on. And I also learned the self confidence to deal with issues even if I hadn’t spent 15 years as a subject matter expert. So I fully believe that if I hadn’t taken this detour into being the general counsel of the ISC group, I wouldn’t have been the general counsel of American Express.
Randy Milch: I think it’s a great lesson. You and I talked in the past about how important it is to seize opportunities, even if they seem a little bit odd and to take some risks in an in-house career, because I think that you’re going to find more gold in those opportunities than people think sometimes.
Louise Parent: I absolutely agree, I often counsel people that vertical promotion is probably not the endgame. And people who solely focus on getting promoted in place or within their particular practice group are oftentimes not going to be developing the wide range of skills that’s really going to be the best route that they have to ultimate success within a corporation.
Randy Milch: Yeah, and in so many ways, lawyering a salesforce brings up so many of the problems and issues that confront a general counsel later on. Salesmen are absolutely necessary to a company, but there are obviously many times as a general counsel when you wish they didn’t exist.
Louise Parent: I always thought a business person cannot do a mergers and acquisition agreement without the lawyer so they have to come to you. Salespeople don’t necessarily have to come to you, you have to find a way to come to them and to be perceived as an asset to the sales process and not really the stumbling block or an obstacle.
Randy Milch: That’s right, and figuring out how to make money the right way is always the key to successful lawyering to those people.
Louise Parent: Exactly.
Randy Milch: So you’re at the Information Services part of AmEx and then in 1993 you’re offered the brass ring.
Louise Parent: Yes, I was.
Randy Milch: And that’s tremendous. My recollection, I went back and did a little Google search; I don’t think there were very many women general counsel in the financial services industry at that point. Is that correct?
Louise Parent: No, although the general counsel of Discover was a woman at that point time, and the co general counsel of Goldman Sachs was a woman and she came on shortly after us. And then the woman who was the general counsel of JP Morgan came after that. So I might’ve been the vanguard but not for long.
Randy Milch: That’s right, and I know some of those other women with you in the vanguard, all very strong general counsels. So it’s 1993 and one of the first things that’s on your plate is a bit of an existential problem for American Express facing its competitors for Visa and Mastercard. Can you give me a second and explain the business issue that was confronting AmEx at the time?
Louise Parent: Yes I can. The American Express competes against Visa and Mastercard as a card network. And as you all know, Visa and Mastercard have thousands of banks that issue cards on their network. American Express at the time only had one issuer on the network the American Express card. So we realized that in order to compete more vibrantly with Visa and Mastercard as a network, it would be to our advantage to be able to get other banks to issue on the American Express network. We thought that would be good for competition and ultimately for consumers as well. The obstacle that was put in our place was that Visa and Mastercard had rules. Both of them had rules that said that any bank that issued a card on the American Express network would be automatically kicked out of Visa and Mastercard, and that would forfeit their existing portfolios. So not surprisingly, no bank was prepared to give up its existing portfolio in order to issue on the American Express network. So we didn’t rush to create a legal battle on this issue. We really tried to partner with banks and see if we could find a way around this, but we really couldn’t. And so we had a choice, we would either give up the network services business before it started, or we would battle to get the rule essentially overturned and we decided to take the latter course.
Randy Milch: And how long of a battle was that?
Louise Parent: Well it was a long battle, actually. It ended up being a global battle and from beginning to end it was probably 8 years and we started really by trying to get some early wins in the EU. The EU didn’t have the rule, Visa and Mastercard were considering adopting the rule, and we realized that we needed to confine the problem to where the rule existed which was in the US and needed to block the spread of the rule globally. So we actually brought a complaint in the EU to stop Visa and Mastercard from implementing the rule in 1996 and that was very, very successful. And within a few months, essentially, the competition authorities in the EU had indicated that they didn’t think the rule was consistent with the EU law and Visa and Mastercard pulled away from the adoption of the rule.
Randy Milch: But they didn’t change their views about the rule in the United States, I take it.
Louise Parent: No, no they didn’t. The rule already existed there so that took considerably longer and we worked with the Department of Justice which ultimately determined to sue Visa and Mastercard to challenge the rule, which they did. And in 2001 we received that the district court opinion that the court had sided with the DOJ and then the appeals followed and ultimately the case finally ended when the Supreme Court denied cert.
Randy Milch: So this is almost a decade’s worth of litigation; 8 years.
Louise Parent: I used to say it might not be a bet the company kind of case, but it was probably a bet the general counsel kind of case. So yes, it was a long time, it was a very long time.
Randy Milch: And how did you approach your business partners about the fact that this was going to be a long haul before they saw results? This is sometimes very difficult for them to understand.
Louise Parent: Yes, it’s very true. So I often say that this was a comprehensive approach to a business problem, so I had strong partnership both on the government relations front, the PR front and from the business. So it was important to get a strong partnership from the get go. One of the things that I did, I think sometimes there’s a presumption that large companies will not be aggressive and that they’re not going to be out there and fight. I saw that it was very important that we be as aggressive as possible so that the business would understand that we were not in any way backing off from fighting as hard as we could for them. And having an early win in the EU, we also had a very strong showing in Latin America. We brought injunctive actions on the same day in about 6 different jurisdictions which was as close as the general counsel’s office ever came to a shock and awe campaign. So we were really, really aggressive and let the business people know that we would leave no stone unturned in fighting for them, so that helped a bit. But I will say that you’re absolutely right to point out that there is a lot of stress when the business is under a microscope with bigtime litigation. And I would say that there’s really no substitute for having strong lawyers who are partners with the business team. It’s not just up to the general counsel, it’s really having a strong team of lawyers who are working hand and glove with the business. And I also think at the end of the day, you have to under promise and over deliver. I always try to have a contingency plan in place. So I always wanted the business people to know that it was going to be a long battle in our case. We perceived it to be an uphill battle because there was some bad precedent in this area that we were going to need to essentially distinguish. So part of it was setting the expectations, part of it was working hard with your team to be really close to the business people. And I also think at the end of the day, the idea of leaving no stone unturned was really important. So I wanted the business to understand that we would just do everything we could to be successful. And as you all know, there are ups and downs in these kinds of things and I always felt it was important when you’ve got a setback that you try to retain your composure because people would really look at you to see whether or not things were going badly or well. And maintaining composure and focusing on the long haul helps everybody to stay committed to the course of action.
Randy Milch: All good points for bet the general counsel litigation. We’re now going to take a minute now, Louise, and go to our quest for sponsorship. And so we’ll be right back in a minute with more from Louise Parent.
Randy Milch: This is normally the time in our show where we hear a word from our sponsors, and this could potentially represent an opportunity for you. In-House Legal is seeking sponsorship. If you are interested in participating in our programming or would like more information about our rates, please contact the team at Legal Talk Network, at Info.LegalTalkNetwork.com, or go to their website at www.LegalTalkNetwork.com and click on advertise.
Randy Milch: Welcome back to In-House Legal on Legal Talk Network. We’re here with Louise Parent, the former general counsel of American Express and currently of counsel at Cleary Gottlieb. Louise, you have the benefit of a long perspective on the general counsel’s role and I’m interested if we could discuss for a few minutes how you have seen that change over the course of the 20 years that you were so important to AmEx and doing that important work. What comes to mind?
Louise Parent: I think it’s safe to say that the role of a general counsel in a large company is more central and more influential now than certainly it was 20 years ago or even 10 years ago. I think it’s now pretty much accepted that the general counsel is going to wear multiple hats. The CEO will instinctively say that they want a business partner. The general counsel will also be the legal manager of a very large budget, will also be a leader of a global team. Is called upon to be a strategic advisor, is called upon to also deal with other issues whether they be compliance, government relations and the like. And just as important in particularly the post-crisis environment, the general counsel has really got to be an ethical role model for people in the company. So I think all of those factors make the general counsel’s position in a large corporation a really critical one.
Randy Milch: I agree with that. In your current role in providing advice to corporations, how do you find that general counsels today are coping with these sorts of issues?
Louise Parent: I think that Cleary Gottlieb was one of the strongest partners to me on a global basis and I’ve really enjoyed working with them a lot. And since I’ve been at the firm, I’ve really reached out to a lot of the firm’s clients and their general counsel. And actually, this January I convened a forum of general counsel to talk off the record with partners of this firm about the issues that were really important to them, including things like dealing with the new regulatory environment and successfully meeting the challenges of globalization. So that’s been a really fun part of my responsibilities at Cleary. I’ve also been able to work with a number of new general counsel as they’re stepping into this multifaceted role and that’s been really fun as well.
Randy Milch: So let’s take a few of the items you mentioned and dig a little deeper for a second. How do you How do you recommend that in-house counsel really achieve the strategic partnership that is so critical to the business folks, particularly in this highly regulated environment that almost any large business finds itself and particularly in the financial industry. But there seems to be some tricks of the trade here. What do you do to make sure the CEO values and seeks and incorporates your advice?
Louise Parent: I think there’s probably no substitute for knowing the business well. So I think that it’s incumbent on the general counsel to understand the firm and its business to understand how the firm makes money, to understand the way the business operates and to really put a business hat on as they think about the issues that are confronting the company. So I do think not waiting until someone asks a legal question but really diving in and understanding the company is the first step to being perceived as a strategic advisor. I will also say that I think that being a strategic advisor is more than risk assessment. So very frequently, the general counsel is engaged in an analysis and a description of risks and I do think that for the general counsel to be perceived as a strategic advisor, that has to be balanced by working with the business people to seize on the opportunities that actually exist for the business and for the company.
Randy Milch: I agree, I think we both know that general counsels are lawyers who are reduced to calling balls and strikes in business situations are quickly ignored. And we have to figure out at some point that no one makes money without undertaking some level of risk; that’s where the money comes from. So it’s important to temper the things that we learned so well in law school about citing issues and picking winners and losers and get into the business string. One of the other things that has changed so much since both you and I started has been technology. How do you see today’s general counsel, today’s legal departments effectively using technology in a way that would have been impossible for us who used telexes and faxes back in the day.
Louise Parent: I think you’re absolutely right about technology. It’s certainly important for the way that the global legal department functions, I would say it’s even more important as you strive to be that strategic advisor for the business because the potential for technology to be a disruptive event is just huge for many, many businesses. And also I would say because technology platforms are global – they’re a facilitation of the global expansion of the business – but just because the platform is global doesn’t mean the regulation is global and the lawyers I think are really critical in helping the business people find the path forward as the company expands internationally. And in terms of just the operation of the legal department itself, knowledge management, the sharing of information, I always thought that one of the benefits of a really well-run legal department is that oftentimes the lawyers understand what’s happening in different parts of the business even more than the business people do themselves. So they can be the people who are kind of the early warning system and facilitate, essentially, the business moving forward. So I do believe that the ability of the technology to help us do our job is huge and it’s really continuing to change. But even more important, the impact of technology on the way our businesses run is really I think at an inflection point and is something that definitely is going to influence the way we counsel our business partners.
Randy Milch: Louise, you mentioned in the litany of things that you have to worry about these days, the increase in regulation that large businesses face. Do you believe that it’s really true that the regulation has changed, both generally and specifically in the financial area? And if so, what’s the best way for general counsels to react to that and get their businesses to understand the changes that have happened?
Louise Parent: I think that when I step back and look at the financial services landscape, there are new financial services regulators in the EU, the US, and they are making their voices heard. So the landscape has definitely changed, even existing regulators are stepping up to their initiatives; very vigorous enforcement, whether that be the FCC’s broken window policy, the huge fines and guilty pleads that are being demanded in settlements. So it’s certainly safe to say that the environment has changed. What I think is important for general counsel is a couple of things. First of all, I think that it’s important to recognize that this is not something that’s a passing phenomenon and will change within the next administration or further time since the crisis. I do think this is a new world order for financial services and it’s important to recognize is it’s going to persist for a while. I also think that it’s important for the general counsel not to simply be the person who resolves difficult issues and concludes difficult conversations with law enforcement and the regulators. It’s really important for the general counsel to try to step ahead and help the company to adhere to the standards that exist. And that ends up being a comprehensive exercise, both from the point of view of the board and its oversight responsibility to the tone at the top of senior management which is really so critical to a strong compliance program to really understanding what operational excellence means. Because many regulatory issues stem from operational problems, technology that doesn’t work, programs that don’t deliver what was expected by the customer and the like. And finally i think the general counsel has the unique perspective on reputational risk and it’s very clear that firms that fall short of the regulators expectations suffer more than simply monetary fines and penalties. But there is a serious reputational risk that results as a consequence. So it’s really the general counsel’s responsibility along with others in the management team to understand the expectations of the regulators and to work very hard to make sure that from the top of the house down into the deep depths of the operations that people are focused on meeting the expectations of the regulators and really dedicated to doing the right things for their customers and for the firm.
Randy Milch: Yeah Louise, I couldn’t agree more. It’s a big job and one that you did so brilliantly for so many years. Thank you so much for spending time with us today on In-House Legal; it’s been a hugely informative half hour and I very much appreciate it.
Louise Parent: Thank you so much, Randy, it was a pleasure.
Randy Milch: 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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|Published:||May 5, 2015|
|Category:||Best Legal Practices|
In-House Legal, hosted by Randy Milch, covers a variety of issues pertinent to the general counsel and corporate in-house legal departments.