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Name and title: Seth Krauss, executive vice president and general counsel

Age: 37

Action-packed: Take-Two Interactive Software Inc. is a major worldwide publisher, developer and distributor of software, hardware and accessories for computer entertainment systems. The company is based in New York City, with international headquarters in Geneva. Take-Two has development and product-testing studios, sales and marketing offices, and distribution facilities worldwide. Its lucrative proprietary-brand franchises include Grand Theft Auto and Manhunt, plus Sid Meier's Civilization, Railroads and Pirates games. Among its licensed 2K Games brands are Major League Baseball and other sports-related games bearing the ESPN label. The company was formed in 1993 and has approximately 2,250 employees. Take-Two estimates its revenues at between $1.4 billion and $1.5 billion.

Three weeks before Krauss' arrival in March 2007, a shareholder action shook up the company's management. The environment remains lively -- recently, Take-Two has been fighting a hostile tender by Electronic Arts Inc. Krauss has handled the legal end of the acquisition of two studios, including a development facility in the Czech Republic, and the sale of a subsidiary accessory business.

Krauss reports to Executive Chairman Strauss Zelnick and Chief Executive Officer Ben Feder.

Legal team and outside counsel: Intellectual property (IP) concerns, First Amendment cases and securities law issues provide "tremendous" challenges for Take-Two's legal arm, Krauss said. When he joined the company, the legal department comprised exactly two in-house attorneys, neither of whom was well versed in IP law. The staff now numbers 15, including three full-time IP lawyers and several others who concentrate on licensing and development.

Krauss aims to find a balance between handling tasks in-house and going outside. Generally, he hires external counsel himself, drawing upon firms including New York-based Proskauer Rose and Debevoise & Plimpton; Clifford Chance; and Hartford, Conn.-based Axinn, Veltrop & Harkrider.

Daily duties: There is no typical day at the office, which Krauss finds "both a benefit and a curse." He considers himself a generalist "by definition." Take-Two is a competitor in the global marketplace, and the legal department is "a full-service firm with specialists." Krauss grapples with "every conceivable" legal issue, including complex litigation, employment matters and mergers and acquisitions. Entertainment law, union activities and immigration regulations also appear on his radar.

Take-Two operates in 20 different jurisdictions, so every legal issue "has to be replayed over and over again."

Krauss insists on a substantial budget for travel. For him it is crucial for a general counsel to make personal connections. "It is important to have a presence," he said, particularly considering that 90 percent of his company is located outside of headquarters.

Take-two tasks: In the kinetic world of interactive entertainment, the company's business leaders continually generate new challenges for the legal department. The company "creates content that I am very proud of," Krauss said.

Nonetheless, Take-Two has had to defend itself against those who consider this form of entertainment scary and dangerous. Krauss works with his counterparts at other game companies and other allies to meet criticism by politicians and critics "who try to politicize the video game industry."

A class action, In re Grand Theft Auto Video Game Consumer Litigation II, No. 06 MD 1739 (S.D.N.Y. 2006), alleges that Grand Theft Auto was marketed under an inappropriate content rating that failed to account for the presence of hidden, sexually explicit scenes. Take-Two denies liability and every allegation of improper conduct.

Mission statement: Krauss wants to set a proper example to his team members, but not to burden them with excessive red tape and "not as a police officer." He finds that he must "think like an owner" about the company's legal problems; he has to be willing to say 'no,' but works to see "how we can say 'yes.'" He strives to "bring discipline and process to creativity." Krauss works vigorously with the human resources department to encourage diversity in recruiting, and monitors the diversity records of outside counsel.

Regulators, lobbyists: As a public company, Take-Two operates under the watchful eye of the U.S. Securities and Exchange Commission. Its activities also are monitored by tax authorities and the Federal Trade Commission, while other government agencies scrutinize such areas as research and development, credits and business development. Take-Two answers to non-U.S. entities, some of them in the Asia-Pacific region, including tax authorities and trade regulators.

Broad questions about whether to regulate the industry are on the agendas of various legislative bodies, as well. Take-Two has engaged in lobbying in the past, and this responsibility falls under the scope of Krauss' duties. His attention to Sarbanes-Oxley regulations focuses primarily on governance.

Route to present position: Krauss graduated from Duke University in 1992 (and he served as a university trustee from 1992 to 1995). He earned his law degree from Washington University School of Law in 1995. From 1995 to 2004, Krauss served as an assistant district attorney and senior investigative counsel in the New York County, N.Y., district attorney's office. A personal highlight was helping to lead the office's investigation of financial institutions implicated in the collapse of Enron Corp. From 2004 until 2007, Krauss was an executive director in the legal and compliance division of Morgan Stanley.

Personal: The New York City native is married to Lisa Krauss. Although he lacks the spare time to indulge in hobbies, he admits to "certainly playing video games." Krauss' father was a Broadway producer, and he has been around the arts all his life. He considers his position to be "a happy and welcome return to working with creative people."

Last books and movie: "Moneyball: The Art of Winning an Unfair Game," and "Liar's Poker: Rising Through the Wreckage on Wall Street," both by Michael Lewis; and "Indiana Jones and the Kingdom of the Crystal Skull."

 

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