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Best Legal Departments 2012: Best of the Rest
In June we recognized the lawyers at four companies as Corporate Counsel' s Best Legal Departments. We also found much to admire in the other nominees. Here is the third and final installment of snapshots of the 2012 finalists.
CBRE Group Inc. general counsel Laurence Midler started 2011 by letting out a big sigh of relief. The Securities and Exchange Commission decided not to take action against the Los Angelesbased commercial real estate company for alleged bribery of Chinese government officials.
In an era of high FCPA enforcement, CBRE's ability to secure a "no action" letter is noteworthy. Months before it received that welcome piece of paper, the company had voluntarily disclosed what amounted to possible violations of the Foreign Corrupt Practices Act. The SEC credited the company's early decision to self-report, its thorough internal investigation, and the swift remedial actions it took to rectify the situation.
We were just as impressed to see the department convert its brush with the law into an opportunity for growth. Not only did CBRE's China business emerge from the investigations stronger than ever, the department reinforced its dedication to maintaining a robust ethics and compliance program.
It was a productive year for the department that employs 60 lawyers (38 in the United States). Highlights included settling an overtime class action for far less than CBRE's lawyers had anticipated. In-house lawyers also led the $1 billion acquisition of ING Group's global real estate practice, doubling the size of the company's investment management business.
With so much going on last year, other GCs might have postponed instituting a formal legal pro bono program. Not Midler. He launched a partnership with Goodwill Industries International, and his active participation has encouraged other members of the department to join in.
Massachusetts Mutual Life Insurance Company recognizes that most of its new lawyers don't arrive knowing how to manage vendor relationships. That's why GC Mark Roellig's department provides targeted training to these new hires, showing them the ropes of outside counsel management.
Teaching those skills translates into direct cost savings for the department down the road. The Springfield, Massachusettsbased company cut outside spending by 5 percent last year. MassMutual consistently manages to stay within its outside counsel budget, and has eliminated automatic fee increases by preferred providers that were once routine.
It's also found other ways to rein in litigation costs. Last year the company's dispute resolution team effectively used early case assessment to better manage its litigation. Since 2009, the team's tactics have cut MassMutual's litigation caseload by an impressive 20 percentplus. Last year the team racked up two summary judgment wins in unrelated district court cases, which were later affirmed on appeal.
MassMutual is staffed by 101 lawyers worldwide, 52 of them based in the United States. We were impressed by the department's focus on diversity. Roellig established a diversity committee to promote awareness in the department, and it seems to be paying off. Forty-three percent of the lawyers hired last year were people of color. Almost half of MassMutual's lawyers are now women, and 10 percent are openly gay or lesbian.
The motto of Milwaukee-based Rockwell Automation Inc.'s law department is "preventing problems before they occur." If 2011 was any indication, its 21 lawyers (15 based in the United States) do a pretty good job of meeting that objective.
Metrics tell part of the story. The product liability docket stood at seven last yearan all-time low. And Rockwell had a low rate of employment litigation for a company with 21,000 employees.
How does the industrial automation company keep those numbers down? To minimize legal risk, lawyers need to be where the action is. The product safety group reports to the VP of litigation. When there are product notices or recalls, legal gets involved early. And when lawyers identify a litigation trend associated with a certain product, they apprise Rockwell's engineers.
GC Douglas Hagerman's department takes the same preventive approach to managing employment issues. Last year the department took the lead rewriting the company's key policies, making them easier for employees to understand. An in-house employment lawyer works hand in hand with human resources, and the department actively encourages participation in its ombudsman program, which has significantly cut lawsuits against the company.
When legal disputes do arise, Rockwell's lawyers are often able to resolve them quickly, and at minimal expense. Last year the company reached an early settlement in a product liability case involving multiple deaths. After an intense investigation showed that Rockwell's product was not to blame, the in-house lawyers aggressively negotiated the agreement at a low cost to the company.
The department has wrung additional savings from its outside counsel spending. Between 2004 and 2009, it cut those costs in half. Although it spent 3 percent more last year on outside services compared to 2010, as a percentage of revenue, spending actually shrank 17 percent. Numbers like that are what GCs' dreams are made of.