ALM Properties, Inc.
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Atmel's Law Department Runs On, and Shares, DataAtmel's top lawyer likes to collect extensive in-house analytics and hand out report cards to go-to outside counsel.
2013-03-27 12:15:32 PM
San Jose-based Atmel Corp. designs, creates and sells microcontrollers chips that drive all sorts of electronics internally and by touch and memory devices. It also manufactures integrated circuits, flash memory, radio frequency and application-specific integrated circuits for a host of industries including consumer electronics, industrial networking and military products. Atmel's chips make frequent appearances in familiar items like smartphones, energy meters and a variety of home appliances. More than 80 percent of its sales are international. The company employs approximately 5,000 employees and recorded full year 2012 revenue of $1.43 billion, down 21 percent from 2011 totals.
Scott Wornow, 50, always wanted to be a business attorney with an international focus. He graduated from the University of Virginia in 1984 with a B.A. in economics and spent his junior year abroad at Cambridge University. He returned to Cambridge after graduation to complete a B.A. and Master of Laws, which allowed him to graduate from Harvard Law School in two years in 1988. "I was thinking about working internationally at that point," he says. "I always had an intuitive sense that I wanted to be a lawyer." He began his career as a corporate and M&A lawyer at New York-based Kramer Levin Naftalis & Frankel and then moved to Paul Hastings' newly launched New York office as an associate in 1994 where he continued to focus on M&A and corporate finance work. He was elected a partner at Paul Hastings in 1997 and began doing high-yield finance and M&A work for cable and telecom and increasingly, technology companies.
Path to the top
Wornow went in house for the first time in 2000 as general counsel at OmniSky, one of the first wireless data providers offering access to email and the Internet. Wornow added the title of chief restructuring officer title as he helped the company file for Chapter 11 in 2001 while simultaneously selling its assets to EarthLink. After he wrapped up the OmniSky restructuring in 2003, he moved on to OpenTV, one of the first interactive digital television companies, as their general counsel and was later named executive vice president of legal and business affairs and IP. Once again, he'd engineer the sale of his employer, this time to Swiss-based Kudelski Group. In 2007 Wornow got an offer to help develop Goodwin Procter's Silicon Valley corporate practice and then moved to Baker Botts, with whom he had worked closely while at OpenTV, in 2009 to start the Baker Botts West Coast corporate practice.
Toward the end of 2010, Atmel came calling. "I went back in house to have greater involvement in strategic and business issues and decisions and responsibility for a broader portfolio of matters." Those matters today include IP, compliance, employment law and governance matters in addition to SEC, M&A and general corporate, he reports. Atmel has more than 40 global subsidiaries, and the issues are vast. "Commercial licensing and regulatory matters alone may touch on national security, export control and import issues," he points out. Wornow reports to Atmel CEO Steven Laub.
IN-HOUSE AND OUTSIDE COUNSEL
Wornow oversees 11 attorneys and five support staffers at Atmel's San Jose headquarters plus two lawyers in Europe. "We have a fairly standard reporting system where directors and VPs report to me," and lawyers are "available as necessary like a law firm," Wornow explains. "We expect Tier 1 law firm quality work in our department," says Wornow, indicating that he likes working with seasoned attorneys who have a sense for the business and its risk profile. The company has completed several acquisitions, including of Silicon Valley-based wireless company Ozmo and Integrated Device Technology's China-based smart energy business. The team's been involved with significant patent litigation over the past few years, most notably with German-based Infineon Technologies. And it has spent considerable time on compliance issues related to export activities and requirements of the Foreign Corrupt Practices Act.
Wornow's outside counsel team on IP includes Irell & Manella; Morgan, Lewis & Bockius; Wilmer Cutler Pickering Hale and Dorr; and Morrison & Foerster. For IP prosecution, Atmel uses Baker Botts and Fish & Richardson, and for M&A work, the company has used Jones Day and Herbert Smith Freehills when needed. Wilson Sonsini Goodrich & Rosati provides assistance on corporate governance and Securities and Exchange Commission matters. Gibson, Dunn & Crutcher and Herbert Smith assist on employment matters, and Fragomen confers on export controls and the company's immigration matters related to cross-border transfers and employee relocations. Baker & McKenzie handles global equity matters.
Wornow says he made a "significant transition to alternative fees" since joining the company, moving from "about 5 percent to 75 percent of legal spend based on fixed or other alternative/success fee structures." The company has done RFPs for its employment, litigation, M&A and governance work. "We don't invite all firms to do it. It is generally based on some relationship or specialized area of expertise. We require that the law firms we hire understand our business, our legal sensitivities, our culture and how we manage our business. We also require them to understand that we are seeking value from our relationship and that we judge that value against the outcome that is achieved."
He also believes in performance reviews for external counsel, online billing systems that track budgets and approvals and extensive analytics to enable the lawyers in his department to better understand where they're spending their money, how close they are to budget and most important, whether the overall result justifies the cost. "Shortly after I joined the company, we began to provide our primary external counsel with quarterly report cards that give them a grade on things such as understanding our business, being responsive, providing practical advice and assessing whether or not we would recommend them to any of our peer companies." Wornow says that the department doesn't intend to "critique any particular lawyers, but rather to enhance the strategic relationship with our service providers and to maintain an open dialogue." He says it's gone a long way to improving performance and interaction between outside counsel and his department.
On technology, Wornow's department also collaborated with one of its IP counsel on a secure extranet that allowed Atmel's global engineering team to communicate directly with counsel on critical matters. Wornow says all parties now communicate "asymmetrically" across multiple time zones and it's sped up the company's process and prosecution of patent applications.
Depending on the time of year, Wornow may spend a good portion of his day on governance or other compliance issues, but international matters absorb a lot of time. "In our industry, we spend a lot of time on export regulation in the U.S., Europe and Asia," he says.
When he's not working, he's usually at an event involving his wife and four kids, aged 9 to 14. The last book he read was Thinking, Fast and Slow by Daniel Kahneman and at the movies, he recently saw Zero Dark Thirty.
This article originally appeared in The Recorder.