Font Size:

With his passion for legal productivity and patent reforms, combined with persuasive speaking talent, probably no GC in the country is more high profile right now than Mark Chandler, general counsel of San Jose, Calif.-based Cisco Systems Inc., the $30 billion company that owns Scientific Atlanta.

Chandler has led the charge by the high-tech world for reform of patent rules to protect their innovations, speaking on the subject from coast to coast and shaping legislation currently under consideration in Congress. And he has taken a lead on negotiating fixed-rate arrangements for legal services.

Yet Chandler is known inside the telecommunications giant as a modest team player as well as a visionary. When he was profiled recently by GC California magazine, a sister publication of the Daily Report, he gathered seven legal department vice presidents around him on a stairway for a photo shoot. "I wish I could take credit for that idea, but it was Mark's," said John Noh, Cisco senior public relations manager. "He said they should all be there."

The article quoted Gordon K. Davidson, chairman of Fenwick & West and longtime outside counsel for Cisco corporate matters, on Chandler's negotiation of fixed-fee arrangements: "Mark has pronounced the death of the billable hour model."

Chandler said he doesn't care about billing rates. He cares about productivity. When Fenwick's Davidson came back to him last year with a generous offer to keep the same fixed rate, Chandler insisted on lowering it -- and sharing efficiency savings by taking back more work in-house.

As Cisco grows, Chandler's goal is to reduce the share of revenue devoted to legal expenses. Currently, he spends about $38 million a year internally and about $80 million per year with outside counsel. He offers that information readily in speeches because he shares it with other department heads -- all of whom are driven by the same productivity metrics.

He believes the "greatest vulnerability of the legal industry today is a failure to make information more accessible to clients," based on technology changes that are driving all knowledge-based industries. He has compared the billable hours mentality to a "medieval guild system" that is leading to "unhappy lawyers and unhappy clients." He said he is "inundated with résumés of top notch associates who don't want to work in large law firms any more."

Like the legal system, Chandler believes the patent system needs to be modernized to keep pace with the complex technologies of the global economy. Key points of his reform agenda include: calculating damages based on a fair share of a patent's contribution to a product -- rather than awarding a plaintiff the entire value of a product with many patents; establishing fair standards for punitive damages; restricting where lawsuits can be filed -- rather than the favorable court shopping that goes on now; and improving patent quality.

Technology companies such as Cisco have products that include many patents. Opponents of patent reform, such as pharmaceutical giants, have products based on a single patent which they desperately need to protect. The reform debate will go on into the new year in Congress, the courts and the U.S. Patent office.

Chandler works closely with Scientific Atlanta GC Michael C. Veysey, whose legal department has remained separate since the 2006 merger. Cisco CEO John Chambers has called the Scientific Atlanta acquisition the most successful in the company's history -- which includes purchases of 125 other companies. With Scientific Atlanta, Cisco acquired the technology that makes cable television work, most notably set-top boxes. Cisco is ranked 77th on the 2007 Fortune 500 list.

Chandler, who grew up in Massachusetts and first moved to California for law school, lives in Palo Alto. He shared some thoughts with the Daily Report in a recent conversation. He divided his daily work into four important categories.

Work environment: I want to make sure I'm providing a good work environment for the 200 people who work for me. Nothing is more rewarding than creating a good work environment and creating career opportunities for the people who work with you.

Strategy: In a fast growing company like Cisco, there are dynamic areas like computer networking, service, strategic issues that are just a lot of fun to sort out.

Patent reform: I really want to get the patent system fixed so that we can benefit from our innovation and not just be satisfying lawsuits.

Legal reform: We need to transform the way law is practiced so we can bring the profession into the 21st century.

Use of outside counsel: We use Fenwick & West for U.S. corporate, securities and mergers and acquisitions on a fixed fee. We have a fixed fee with Morgan Lewis for commercial litigation. Not surprisingly, this has made Cisco litigation avoidance a key goal of Morgan Lewis. We use a variety of others, including Kirkland & Ellis, Winston & Strawn, WilmerHale and DLA Piper.

On the in-house career path: People who went in-house are happier because they chose to do something they liked better. It's different for different people. The art of career development is to find a place where you fit. I'm fortunate to have found a place where I fit.

Recent reading: "The World is Flat: A Brief History of the Twenty-First Century," by Thomas L. Friedman, which says easier access to information is revolutionizing the global economy. "The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations," by Rod A. Beckstrom and Ori Brafman, which shows the power of decentralized knowledge and sharing technologies to undermine whole industries based on a command-and-control approach to information. People around the world are building their own communities to connect with each other and share knowledge.

Board memberships: board of directors, Lytton Gardens Senior Communities in Palo Alto; board of visitors, Stanford Law School; board of trustees, Belmont Hill School in Belmont, Mass.; advisory council, Woodrow Wilson International Center for Scholars, Washington; former member and chairman, City of Palo Alto Planning Commission.

Subscribe to Fulton County Daily Report