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Golden Rule Guides CLO's Approach, Even to Litigation
Walt Holmes rose through the ranks of the law department at Interstate Battery System of America Inc. to take on more than just legal work, and he does it all while following the Golden Rule: to treat others as they would want to be treated.
Holmes, Interstate's senior vice president and chief legal officer, and the legal department at the Dallas-based company feel they run their legal affairs a little bit differently from other large companies. Not only do they blend business and legal duties into their jobs, but they do it while following this companywide philosophy.
The company's mission statement is, "To glorify God as we supply our customers worldwide with top quality, value-priced batteries, related electrical power-source products, and distribution services. Further, our mission is to provide our partners and team members with opportunities which are profitable, rewarding and growth-oriented."
Interstate Batteries, a distributor of batteries and other means of providing power, acts as a middleman between manufacturers and resellers and consumers, says Holmes. The company has about 1,750 employees throughout the United States and Canada, with about 650 of those in the Dallas area.
Annual revenue is about $1.6 billion, though Holmes says that fluctuates based on the price of lead, a major ingredient in batteries.
As SVP and CLO, Holmes has his hands on more than one area of the company's business. He runs the PowerCare division, a group of about 100 employees who provide maintenance and repair service on products in that division. He also bears responsibility for Interstate's roughly 50 company-owned distributorships (40 in the U.S. and 10 in Canada). All that is in addition to the legal work he handles.
Holmes started with Interstate in 1995 as associate general counsel after working for outside law firms and graduating from Baylor Law School in 1990. Within about six months, the company's general counsel started overseeing its operations group and gave Interstate's legal matters to Holmes.
The company named Holmes general counsel in 1997. His job expanded again when he took over human resources in 2001.
Three years later he took over PowerCare and had a mouthful of a title: general counsel, vice president of human resources and PowerCare.
"I was managing the legal functions even at that time by myself and just said, 'I can't do all the things I need to do,' " Holmes says.
Around 2005, the company brought onboard Chris Willis as general counsel to oversee day-to-day legal work, says Holmes. True to Interstate's blended form, within three or four months, Holmes says, Willis was named director of human resources, too.
Also handling legal work for the company is another lawyer, Kelvin Sellers, director of legal affairs.
As for following the Golden Rule, it's a companywide and legal-affairs standard, Holmes says.
"Our philosophy is very simple to treat others as we would want to be treated," says Holmes. "And, so, what that does is actually shapes, compels [and] frames how we spend a lot of our energy. We do a lot of things proactively to try to avoid litigation, primarily."
That means trying to resolve disputes early and without going to court. And when a dispute arises, the company still tries to respect its adversaries.
"We accept and acknowledge that we may have different perspectives," Holmes says. "But we generally operate from the principle that, even though we may be involved in litigation, we don't ascribe ill motives or ill will or ill intentions from even the party that we may be in litigation with."
That respectful posture, says Paul Genender, a partner in K&L Gates in Dallas who has represented the company in business litigation matters, means the company has "not unnecessarily burned any bridges and made things personal." After all, the person or entity with which Interstate might be in dispute could be one with which the company still wants to do business after the dispute is resolved, he said.
Noble as it is, the Golden Rule is not always the easiest position for the company, Holmes says.
"Sometimes, I think you'd just like to say, 'Hey, gloves off, and we'll just go fight. We'll do whatever we need to do; we'll go to the mat because we just know that we're right,' " Holmes says. "That, I guess, can be easier, sometimes. But I just don't necessarily think that that's the best way to be."
That's not to say Interstate is a pushover, Willis says. The company will take a strong, "collaborative stance" when necessary, he says.
"We are going to vigorously defend actions, but we're going to do it with integrity and fair dealing, which is the way we would prefer if we have an adversary," Willis says.
For outside counsel, Interstate's modus operandi is unique compared to how other companies work, says Walter James, a Colleyville solo. The company is always looking for the right way to do things in a moral and ethical sense, he says.
"It is different, too, because there are certain times where you would love to advise them and do advise them that, "Look, if you do it this way, it may save you some money,' or, 'You know, it may do this, or it may do that," James says. "And, you know, they always come back to, 'Is it the right thing to do? Is it the moral thing to do? Is it the ethical thing to do?' "
When picking outside counsel, Holmes says, the lawyer must understand and be able to work within the standard. Holmes asks: Can they listen and hear what Interstate is saying, and can they get on the same page with the company?
"We want our outside counsel to join with us in really hitting the objectives and not necessarily winning the way many people might deem winning," Holmes says.
Ultimately, Holmes says, practicing the Golden Rule makes economic sense, too. Having access to courts is "awesome," but it's "generally not the most cost-effective way of resolving folks that have different perspectives," Holmes says. The company works on the front end to stay out of court, he says.
"So, we spend a lot of time really working with all of our business groups on trying [to find] the right way from the beginning. And, where we do have difference of opinions, we try to work to get resolutions done before we have to get into the litigation arena, whether that's through arbitration or litigating in any court dispute.
"So that's, for a long time, shaped what we do," he says.
Toward that goal, Willis says, Holmes has "done amazing things" in his leadership role at Interstate and within its corporate standard.
"What he's done from a culture perspective around servant leadership and living our corporate mission and philosophy has been amazing," Willis says.
Best Practices: Blending Business and Law
Walt Holmes joined Interstate Battery System of America Inc. in 1995, and since then he has taken on a number of business roles as he has risen through the ranks to become senior vice president and chief legal officer.
Texas Lawyer reporter Thomas Phillips emailed Holmes some questions about best practices. His answers are below, edited for length and style.
Texas Lawyer: What do you see as the most important legal role you play for Interstate Batteries?
Walt Holmes: It is essential that any one of us performing the legal functions within Interstate Batteries get into the business to understand the business drivers for any issue presented. The value we can deliver for the organization isn't in saying "don't do that" but in crafting solutions that meet the business need while mitigating risks associated with the initiatives/issues.
TL: What are some things about working in-house you didn't know when you worked for a firm?
Holmes: I think there are several. Very few folks are really impressed with legal knowledge. In fact, that legal knowledge can be a barrier to working alongside folks. The challenge is . . .having the legal knowledge (which is essential) but being able to work with the people who are truly driving the business success. I think I had a bit of an over-inflated view of what my role was and needed to be when I first started. Also, there is a lot of scrutiny that happens: How is "this lawyer" going to work with everyone? How responsive will "this lawyer" be? Although those questions will occasionally be verbalized, they are happening internally all the time.
TL: If you ever went back to being outside counsel, what would you do differently?
Holmes: I know, if I was working with corporate clients, I would be much more proactive in understanding the business issues. I would want to know the "business owners' " view of the situation and what potential outcomes the business owners believed existed. I would take all of the information and prepare a plan AND budget to make sure we all were on the same page in addressing the issue at hand.
TL: What's some good advice for how general counsel can see the bigger picture of a company's business, and not just legal issues?
Holmes: Go spend some time with the people that drive the success (or potential failure) of the business! Understand the business! Think of ways you can improve the business after you have a better understanding of all of its facets.
This article originally appeared in Texas Lawyer.