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Ready or Not
It's a September evening at Harvard Law School. Twenty-two students are being asked to imagine that they are the general counsel of Hewlett-Packard, circa 2010. They've worked with the boss, CEO Mark Hurd, for years, and they consider him a friend, too. Then one day Hurd steps into their office with a letter from the high-profile attorney Gloria Allred, claiming that he has sexually harassed her client, a company contractor, and revealed secrets about the corporation.
The instructors want to know what the general counsel should say to Hurd.
Pooja Patel, a third-year, jumps into the hot seat: "I'd ask him if it's true."
"Is [Hurd's answer] a privileged statement?" asks Ben Heineman Jr., former general counsel of General Electric Company. "I believe so," she says. Heineman corrects her. "No," he says. It's not privileged as far as Hurd is concerned.
Sitting next to Heineman is his coinstructor, professor and vice-dean David Wilkins, who prods further. "Is this just a question of [Hurd's] personal ethics or morality?" he asks. "Why is this not solely a personal matter?"
Another student chimes in. "Because he was in a position as an employer." Others keep going: He was allegedly using company funds. Hurd is the face of the corporation. He was allegedly dispensing insider information. "So why isn't this privileged?" Wilkins asks.
Now Patel's got it. "Because there's a conflict between his interests and the company's interests." Bingo. The general counsel represents the company, and the privilege belongs to it, not the employees.
The exchange sets the stage for the challenging questions to follow, including how to inform the board about the allegations, what role the GC should play in the internal investigation, and whether it's worth ousting a CEO for lying about several thousand dollars in expensesas Hurd eventually was.
Welcome to "Challenges of General Counsel," a new offering at Harvard this fall, taught by Wilkins, Heineman, and Ernst & Young general counsel Michael Solender. While Heineman and Solender originated the course at Yale Law School in spring 2011, this semester it's Harvard students who are wrestling with about a dozen case studies that range from global sourcing at IKEA to BP's handling of the Gulf oil spill. The guiding principle for each discussion is (to paraphrase the syllabus) not just "what is legal," but "what is right."
"This is really a course about how to be a lawyer when the law is only part of any question you're dealing with," Heineman explains in an interview after class is over.
Heineman's 18-year tenure at GE earned him recognition for helping to transform the role of general counsel into that of a high-level corporate decision maker. Since his retirement at the end of 2005, he's been busy articulating his blend of idealism and realism through a number of writings, among them the book High Performance with High Integrity, the 2010 article "The General Counsel as Lawyer Statesman," and regular contributions to this magazine. Now, through case studies of businesses in crisis, the course is introducing those ideas about leadership and ethical problem-solving to a new generation of lawyers-in-training.
Wilkins calls it a "cutting-edge" approach to legal education. A pioneer in his own right, Wilkins has studied the legal profession for more than 25 years. Law schools have been doing a better job at teaching students "some of the skills of lawyering," he says. "But what they haven't been doing a very good job of is teaching them how to think about the role of the lawyer, and how to approach the kinds of complex problems that are inevitably at the intersection of law, business, public policy, psychology, and human relations."
Alumni from the course echo these sentiments. Mark Fitzgerald, who graduated from Yale Law in May, took the class last spring. Prior to law school, he and his brother started, and then sold, a specialty food company. So he already had a good idea of how business and legal decisions are intertwined ("We couldn't make a move without calling our lawyer," he says). But by his third year at law school, Fitzgerald was feeling burned out and frustrated with scholarly courses that seemed to offer a "very narrow" window onto the law.
The GC course proved the perfect antidote. He found the seminar crisp and fast-moving, and enjoyed the push-back from Heineman and Solender, as they tested the students' judgments. Fitzgerald draws a contrast between those discussions and, for example, learning a doctrine like the business judgment rule. "Okay, so I understand that rule now. But you don't then think about, well, if this business had been in Thailand, and it had come to the general counsel's attention that the corporation was violating local labor laws, what would they do?" he says. "This class, for me, was really the first class that implicated all of those concrete issues."
Nafees Syed, a 2L at Yale, also raves about her experience in the class. It made her think beyond the "legal consequences" of advice given to a client. "You, as a lawyer, need to consider ethical aspects," she says. "You need to consider business aspects, you need to consider what's going on in the world at largepolitical factors, public relations factorsin order to be the best lawyer that you can be. And I don't think that other law school courses can teach you how to be that well-rounded kind of lawyer."
The instructors readily admit there are no easy answers. Solender points to the running theme of "the lawyer in the cauldron of a business crisis." The GC must deal with executives, the board, shareholders, the media. "By definition, these were challenging legal circumstances for many experienced legal professionals who had years of experience under their belt," Solender says. Expecting students "to absorb this material, and process it, and analyze it at a sophisticated level is a big ask."
Back in Cambridge, the case of Mark Hurd is only the first business crisis under the microscope. As class winds down, Heineman steers the discussion to the PR aspects of Hurd's messy exit. Although Allred's client ultimately settled with Hurd, HP's internal investigation had turned up Hurd's false expense reports, and indicated other possible inconsistencies in his story about their relationship. Essentially, Heineman explains, the directors lost faith in their chief executive.
But the board's public statement did little to convey that sentiment when Hurd resigned, contributing to the public relations firestorm that ensued. "Does anyone have any idea of how they could have handled it differently?" Heineman asks.
Daniel Doktori raises his hand. Suppose the board had said this: "He was a great CEO, in the business sense, but HP is bigger than that." Heineman reads aloud the one line from HP's statement that explains Hurd's resignation: "The investigation determined there was no violation of HP's sexual harassment policy, but did find violations of HP's Standards of Business Conduct."
Doktori may be onto something.