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California State University: Going 4.0
The headquarters of the largest four-year university system in the world is located in Long Beach, California. Not far from the town's huge eponymous port and the retired Queen Mary ocean liner, the California State University offices overlook a point where the Los Angeles River meets the bay, and ferries set sail for Catalina Island. Here, in the Office of the Chancellor, CSU administrators oversee the goings-on of 23 campuses and nearly 440,000 students. And they're still grappling with the $1 billion in budget cuts they've been dealt the last few year
General counsel Christine Helwick once thought she'd be at CSU for a year, tops. Sixteen years later, the woman who is considered one of the best legal minds in higher education has only just left Cal State, bound for retirement. During her tenure, she served 10 board chairs, three chancellors, and dozens of campus presidents, all under the watchful eye of the state legislature. As the school searches for her successor, Helwick leaves behind a great law department that's strong enough to last beyond her tenure.
So much so that, for the first time ever, Corporate Counsel has selected a university as one of our annual Best Legal Departments. We're honoring a department with a strong record of client satisfaction (having scored an 87 percent approval rating in their last internal survey), and a dedicated group of attorneys who have reduced CSU's number of litigated cases by 70 percent since Helwick arrived, down to 66 cases filed against them in 2012. Legal spending dropped 15 percent last year. They've also chosen their battles wisely: They didn't lose a single case in 2012.
Helwick, who previously managed litigation in-house for the University of California, cites a number of factors that have led to the success of CSU's legal department. One is litigation prevention.
Here's how it works: Each campus has its own culture, like the population of student cadets at the California Maritime Academy, and quirks, such as the conversion of a former mental hospital into CSU's newest campus at Channel Islands. The lawyers are well versed in the specifics of each school. Seventeen in-house attorneys are assigned to one or two campuses each, working with that particular school's president, practically functioning as the campus GC.
In consultation with their campus clients, counsel can choose to settle claims under $100,000 at their discretion, and each one manages the suits that arise at his or her school. Meanwhile, five CSU attorneys are dedicated litigators. Together, the in-house lawyers will analyze a claim and decide almost immediately whether to settle or litigate. "If lawyers do their job well, it's invisible," Helwick says.
CSU's lawyers also have a personal attachment to their client. Unlike the more prestigious University of California system, a research institution with fewer campuses and students, the Cal State system aims to make higher education as affordable and as accessible as possible to Californians. Many undergraduates are the first in their families to attend college. Tuition costs about $5,500 a year, and, typically, if a student's family earns less than $70,000 a year, it's free: Around 160,000 undergrads pay no tuition at all. So any resources saved by preventing mistakes and curbing litigation can be put toward educating the students, according to Chancellor Tim White. "It makes us better public stewards of the public dollars," says White, who took the helm at CSU in January.
Some in CSU's legal department can personally attest to the school's mission. Helwick's interim replacement is a CSU alum. Andrew Jones couldn't afford to attend Notre Dame when he was accepted to his dream school. But he became the first person in his family to attend college, at CSULong Beach, just a few miles away from the Office of the Chancellor. He then attended the University of California Davis School of Law, and went on to practice general business and commercial litigation before returning to his alma mater. Now, he says, "I can give back to a place that gave me a start."
Recent hire Juanda Daniel is grateful for the scheduling flexibility at CSU Dominguez Hills, which allowed her to work full-time and attend classes at night. She eventually went on to Emory Law School. Lynn Rivera, a member of the support staff, first started in the law department as a student assistant in the mid-1980s.
One afternoon in early April, CSU's spring break is drawing to a close, and Helwick has just a week until her last day in the building. After work, she heads for the parking lot, recalling along the way one of the more harrowing moments in her career. During a 2011 board of trustees meeting, a protest over student fee hikes got out of hand, and the massive glass doors in the lobby were shattered. "It was scary. It was really scary," says Helwick, about to get into her blue Prius. "But it was a lot like when I was at Berkeley."
Helwick saw Berkeley through the turbulent days of the 1980s, and would have remained happily ensconced in the UC system her whole career. She landed in the University of California legal department in 1978 after spending five years as a litigator at Crosby, Heafey, Roach & May (now part of Reed Smith), where Helwick, a University of California Hastings College of the Law graduate, was one of the very first women hired. Higher education captivated her. (She also became active in the National Association of College and University Attorneys and eventually became the group's president.)
But when CSU was looking for an interim general counsel, her name bubbled up in NACUA circles, she says, and California's other major public university system came knocking. Helwick initially hated the idea of moving her children from their home in Oakland, and also the thought of leaving the more elite school. "It took me a long time to get over my superiority complex and understand that CSU has a different mission," she says. She accepted the position only because she was technically on loan from the University of California to Cal State. But that year in Long Beach helped change her thinking, so much so that Helwick commuted between Long Beach and Oakland every week for six years, until her youngest child graduated from high school.
Her bosses appreciated her judgment and her honestyand they worked closely together forging legal strategy. Helwick worked for Chancellor Charles Reed, who retired last December, for 14 years. Together, he says, one of the toughest issues they took on was changing CSU's preference to litigating cases rather than settling. "The people on the campusvice presidents, deansthey'd give everything they could to make a problem go away," he says. "And Chris had a backbone."
Equally important was her sense of empathy, according to former board chair Jeffrey Bleich. "The relationships within a university are very intense, sometimes very personal," says Bleich, a former Munger, Tolles & Olson partner who's now the U.S. ambassador to Australia. In resolving claims, Helwick "managed to diffuse the personal tensions and allowed people to see the bigger picture," he says.
Helwick's own high expectations helped reshape the department. She shifted more duties to her in-house lawyers by assigning them responsibilities for one of four substantive policy areas: academic and student affairs, business and finance, human resources, and litigation. And while she's not a boastful person, she'll allow herself plaudits for changing legal's strategy on hiring: to go after the best lawyers, "not to go into the market with our heads down."
As a result, she has filled the department with alums from Big Law and the public sector alike. Helwick's longtime NACUA colleague, Stephen Hirschfeld, who has a leading higher-ed practice at Hirschfeld Kraemer in San Francisco, praises her skills: "She's somehow figured out a way to hire really great peopleand keep themon a limited budget." Bleich likens her management talent to that of Oakland A's general manager Billy Beane, of Moneyball fame, who, despite "a very low salary cap . . . finds the high-value players who have been overlooked."
Like many of his colleagues, Victor King still remembers seeing an opening in CSU's legal department advertised in the Daily Journal, a local legal publication. A high-octane lawyer, he was a partner at Lewis Brisbois Bisgaard & Smith at the time, in 2002. But, with degrees from the University of Chicago and the University of Michigan, King felt a little regret about not going into academia. He was so excited about the CSU job that when he dropped his application in the mail at the post office, he turned to his wife and said, "This job is mine." (The pressure of a potentially lower salary was eased by $63,000 in Hollywood Squares winnings, allowing him to pay off his student loans.)
His enthusiasm still shows. While most CSU attorneys work out of Long Beach, King is one of five lawyers who work on a campusin his case, CSU Los Angeles. He talks just as excitedly about bouncing ideas off his law department colleagues at their monthly meetings as he does about giving advice on First Amendment issues, or resolving disagreements over campus parking spaces. "At the end of the day, where one parks at a university could be the most aggravating moment of your academic career," says King. The role required some adjustments, too. "You have to treat opponents and clients with a lot of respect," he says. "You can't have a big-firm mentality."
Training is another important component of maintaining that culture. Leora Freedman is one of the attorneys responsible for drafting complaint procedures concerning sexual harassment and discrimination. It's a complex issue that many colleges are grappling with, underscored by some estimates that 95 percent of campus sexual assaults go unreported. In 2011 the U.S. Department of Education issued new guidance to universities on the subject. "You have to train and educate people at a lot of different levels," says Freedmanfrom addressing the risks of excessive drinking with students, to teaching faculty, staff, and administrators how to identify and report incidents, to coordinating an investigative and complaint process for victims.
No matter what they're working on, CSU attorneys have to navigate within a complex framework. Higher education is one of the most heavily regulated environments in the country, second only to the banking industry, explains Helwick. In California, state open-records laws subject the school to constant requests for information, and the lawyers are aware that even their own exchanges with opposing counsel could be requested. Thirteen different labor unions represent CSU's 44,000 employees, keeping the law department plenty busy with administrative hearings. The shared governance structure of a university adds an additional layer of complexity; faculty, staff, and students also have an important say in decision making. "Fortune 500 general counsel would be blown away by having to deal with open-records laws and shared governance," Hirschfeld says.
Then there's the public scrutiny, which Helwick has certainly felt. She had to face the music in the wake of that chaotic 2011 board meeting. Because of the clamor, the trustees had to move the meeting down the hall, and the school came under attack for that, too. Helwick defends the fact that the board had the right to resume meeting in another location. Yet while, technically, members of the public were present, members of the media were not. CSU got hit with a claim of violating the state's open-meeting statutewhich the law department settled with a written commitment to improve efforts at ensuring media presence at future meetings. "You're kind of a sitting duck sometimes," she says. "And you have to get over taking things personally."
Several years ago, CSU also lost two high-profile sex discrimination suits. Two female coaches of women's sports teams alleged discrimination after being fired from Fresno State, and in 2007 both were awarded multimillion-dollar jury verdicts. Helwick considers the verdicts an "aberration" from the department's normal track record. Nevertheless, the losses "got laid at my feet," she says. Others in the legal department felt the fallout, too; some campuses worried that if they pressed their cases in court, they'd risk a defeat just as bruising, according to Susan Westover, who heads the litigation team. The in-house department worked hard to reassure them: If you think you're in the right, "then we're going to help you tell that story," she recounts.
CSU has bragging rights on important victories. For example, a Christian group called Every Nation Campus Ministries challenged the constitutionality of a CSU policy that denies school recognition to groups that discriminate. Westover argued that case for CSU before the U.S. Court of Appeals for the Ninth Circuit, and won. On appeal, the U.S. Supreme Court rejected Every Nation's petition.
Now CSU is in the midst of a budgetary battle in court. In 2009 the state legislature cut school funding mid-year, after the university's budget had already been set. Cal State tried to compensate for some of the losses by raising student fees that fall. In response, six students brought a class action suit, Keller v. Board of Trustees, which is set for trial in 2014. So far, CSU, together with outside counsel Durie Tangri, managed to whittle down the class from 400,000 students, with a potential $80 million exposure, to less than 175,000 students and a maximum $40 million liability.
The legal theories being tested in the case are novel. And while it will be another GC who sees the case through, Helwick has no doubt that the shop will be in good hands. Even when she's gone, she says, "they'll still be the best legal department."