Working on the spinoff of a multibillion-dollar operation while also handling an acquisition valued at about $3.5 billion has made 2011 a busy year for Sylvia Kerrigan.
“My brain has been in overdrive for so long, I wake up in the middle of the night and think of four things I have to do,” says Kerrigan, who has been vice president, general counsel and secretary of Houston-based Marathon Oil Co. since 2009. “But for a recently minted GC, what a great set of experiences.”
On July 1, Marathon Oil Corp. spun off its downstream operations into Marathon Petroleum Corp. based in Findlay, Ohio. “What we spun off was the refineries and the service stations,” Kerrigan says. “So we spun off about a $14 billion company that handled the marketing and pipelines. We retained the exploration and production company.”
Marathon Oil’s acquisition of the Eagle Ford Shale assets of Houston-based Hilcorp Energy Co., valued at about $3.5 billion, is expected to close Nov. 1, with an effective date of May 1, she says. “We did the Hart-Scott-Rodino filing and have regulatory approval for the transaction,” Kerrigan says. “Now it’s just a matter of getting the leadership team in place.”
Kerrigan, whose legal department includes 39 lawyers, notes that assistant general counsel Dick Horstman and Rick Kolencik spearheaded the spinoff, and assistant GC John Polisini and general attorney Tom Lowry led the acquisition effort.
“Having such capable [in-house] subject matter experts, I was able to devote myself to communications with the board of directors with information they needed to make informed decisions,” Kerrigan says.
Lawyers with Baker Botts are outside counsel on the spinoff and the acquisition, Kerrigan says. Maria Boyce, partner in charge of Baker Botts’ Houston office, says she and her colleagues have been working with Kerrigan for a decade. “She is a litigator by training, who understands the precise details of very complex domestic and international transactions, which is a rare combination,” Boyce says. “It’s really been a busy year, and, of course, the Hilcorp deal will close in the fourth quarter of 2011 . . . so she has a busy year ahead to get that wrapped up.”
Kerrigan was born in Bahia, Brazil, where her parents were missionaries working with indigenous tribes in the Amazon. The family moved to Texas when Kerrigan was 2 years old, and she grew up in Georgetown. In 1987, she earned a bachelor’s degree in philosophy, political economy and English from Southwestern University in Georgetown.
Kerrigan says she decided to earn a law degree to add more career options to her liberal arts undergraduate education. She graduated from the University of Texas School of Law in Austin in 1990 and during her last semester clerked for then-Texas Supreme Court Justice Eugene Cook. After graduation, she became an associate with Bell & Murphy in Austin where she had been a summer associate after her second year of law school. “It was a maritime firm, and I wanted to be a maritime lawyer,” she says. “I loved the fact that maritime law was a combination of international law and federal law, even though I couldn’t do as much as float a rubber boat in a bathtub. I had no practical expertise, but I loved the area of the law.”
Marathon Oil was a Bell & Murphy client, but Kerrigan had not done work for the company. When she heard from a friend that Marathon Oil had an opening for an in-house lawyer, she applied for the job. “To me, when you get to litigation, you are already in a win-lose mode, she says. “I liked the idea of coming in-house and trying to head off issues before they became problems.”
She joined Marathon Oil in 1995 as an attorney. But in 1999, she took a two-year sabbatical from the company to work at the U.N. Security Council’s Commission d’Indemnisation in Geneva arbitrating international energy companies’ loss claims resulting from Iraq’s 1990 invasion of Kuwait. “It was a unique opportunity to work as a colleague and peer to all of the individuals in the national oil companies in the Middle East,” she says. In 2001, she returned to Marathon Oil as the company’s assistant general counsel for litigation, human resources and environmental law.
Kerrigan says she typically works 12-hour days, including her five- to 15-minute commute to the office from the home she shares with her husband Matt and Great Dane Pixie. She says it’s an exciting time to work at Marathon Oil, with its smaller size due to the spinoff, its focus on exploration and production, and its pending acquisition of the Eagle Ford Shale assets.
Notes Kerrigan, “I feel like . . . I’m on the rocket and it’s about to take off.”
Best Practices: Effectiveness and Efficiency
Sylvia Kerrigan, vice president, general counsel and secretary of Marathon Oil Corp. in Houston, says she prefers to work with outside counsel who deliver results and offer innovative billing options. Texas Lawyer research editor Jeanne Graham e-mailed Kerrigan some GC best-practices questions. Kerrigan’s answers are below, edited for length and style.
Texas Lawyer: What percentage of your company’s legal work is done in-house, and what areas of work does that include?
Sylvia Kerrigan: The majority of our legal work is handled in-house, and that work touches everything from our day-to-day operations to human resources and health, environmental and safety advice. We generally partner with law firms for major litigation or M&A activity that exceeds internal staffing capacity, but even in those instances, we handle as much as we can ourselves. This approach serves our overall goal of delivering the best possible legal service as efficiently as possible. It also allows our team to develop and maintain strong legal skills, and hopefully, have some fun doing it.
TL: Do you hire outside counsel, or is the selection of outside counsel handled by your assistant general counsel?
Kerrigan: It’s a joint decision ultimately made by whoever in-house has the most direct insight and responsibility for the matter at hand. The leadership team develops partner and billing strategies to maximize performance, and our hiring is consistent with those strategies. Exceptions require assistant general counsel or general counsel approval. We solicit feedback from in-house and outside counsel from time to time and make adjustments as appropriate.
TL: What criteria do you consider most important when the company selects outside counsel?
Kerrigan: We look for someone who understands Marathon, our values and the areas in which we operate. Effectiveness and efficiency are both important. We strive to hire counsel with the proven ability to deliver results while remaining focused on the cost/benefit side of the equation.
TL: What types of alternative billing have been most useful to the company?
Kerrigan: We consider the entire range of alternative fee practices, but flat fees and discounts have probably been the most successful approaches so far. Some firms still seem uncomfortable with other fee arrangements, and often offer less desirable terms as the only option to hourly billing. We think that the greatest opportunities in the future will go to firms that are both value-oriented as well as innovative in their approach.
TL: Which one thing from your previous legal experience is helping you most on the job today?
Kerrigan: There are so many lessons I learned from my first mentors in private practice, Mike Bell and Ed Murphy. If I had to pick a single thing, it would probably be the importance of responsive and effective client service. Representing Marathon is a privilege, not a right, and our department doesn’t take that for granted.
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