James Brashear likes to fly, whether he’s piloting a plane or steering a legal department.
“[A]s a hobby really, I started flying and still have a private pilot’s license,” Brashear says. “I liked the intellectual challenge of it, the precision involved in learning approaches, managing the aircraft.”
As vice president, general counsel and corporate secretary of Zix Corp. since 2010, Brashear flies solo as the only in-house lawyer for the Dallas public company. Zix Corp., which offers customers email encryption services, generated nearly $40 million in 2011 revenue.
“For somebody who doesn’t have a background in engineering or computer science, I like to think of myself as being pretty technology adept,” Brashear says.
Since earning a J.D. at the University of San Diego School of Law in 1982, Brashear’s legal career has included stints with three law firms and three public companies including Zix.
Brashear grew up in San Diego. His father was a career naval officer, and his mother was a flight nurse with the U.S. Air Force. After earning a B.A. in political science at the University of California, San Diego, he says he went to law school because he was attracted to the idea of having a professional license. He spent his first nine years after law school as a tax lawyer in Los Angeles, first joining O’Melveny & Myers.
After four years with O’Melveny, he moved to Skadden, Arps, Slate, Meagher & Flom. In 1990, while an associate with Skadden, Arps, Brashear decided he wanted a different lifestyle that required fewer work hours. “Around that time I had gotten married and had a child and realized big firm practice consumes a lot of your personal life,” he says. “I thought, ‘Wouldn’t it be cool to work for a company in the aviation business,’ ” says Brashear, who had earned a private pilot’s license while he was with O’Melveny.
He applied for in-house jobs with various companies and was hired as an attorney in corporate transactions with American Airlines Inc. in 1991. “I wasn’t exactly what they were looking for from a transaction lawyer’s standpoint, but my passion for flying made up for it,” he says.
Brashear says that working at American was fascinating and involved a lot of responsibility. “I was working on transactions in-house worth tens of millions [of dollars] or more,” he says. One major transaction he worked on was the formation of Sabre Holdings Corp., the technology end of American parent company AMR Corp.’s business, as an independent company in 1996. He became the newly formed company’s deputy general counsel, corporate secretary and senior vice president, responsible for overseeing transactions and Sarbanes-Oxley Act compliance.
“It was great fun,” he says. “We had employees in over 100 countries and over $3 billion in revenues.”
But 11 years later, Sabre went private. “So my function, which was a public company officer function, was made redundant,” Brashear says. “I was at a point where my kids were older, and it made some sense, after having been in an in-house role for more than a decade at one company, to go back into a law firm, which would give me visibility with firm clients and the validation of working with a respected law firm,” he says.
Since going in-house in 1996, he had worked with lawyers at Haynes and Boone as outside counsel. He joined the firm’s Dallas office as a corporate partner in 2007. A few years later, one of Haynes and Boone’s clients was a director on the board of Zix Corp., which was looking for a general counsel. “I was looking for a GC role at a public technology company, and Zix Corp. fit the bill,” says Brashear, a tech enthusiast. “It’s something I’ve always been interested in. . . . Maybe there’s some latent engineer in my psyche.”
He interviewed with the company’s executives and joined Zix Corp. in February 2010 as vice president, general counsel and corporate secretary. According to Zix Corp.’s 2011 proxy statement, Brashear’s total compensation for 2011 was $349,656.
Haynes and Boone partner Gregory Samuel of Dallas, who worked with Brashear when he was in-house at American Airlines and at Haynes and Boone, says Brashear’s strength as a GC comes from a combination of intellect and experience. “He’s a gifted lawyer who really loves this stuff,” Samuel says. “He’s very fair, he’s direct and he has high expectations of himself.”
David Barkan, a principal in the Redwood City, Calif., office of Fish & Richardson who has worked with Brashear on patent litigation since he joined Zix Corp. in 2010, says Brashear is “good at lining up the internal resources that we need at Zix to do our job. . . . It takes the right kind of skills from a GC to be able to impress upon people that they need to work with the lawyers, why they should do it and create this ‘we’re all in this together’ atmosphere. Jim is very good at making sure we have access to the people at Zix we need access to, whether they are engineers, on the marketing side, or senior management.”
Best Practices: Fees and Certainty
James Brashear worked for nine years as a tax lawyer at two large Los Angeles firms, then parlayed his interest in aviation into his first job as an in-house lawyer at American Airlines. Brashear now is vice president, general counsel and corporate secretary at Zix Corp. in Dallas.
Texas Lawyer research editor Jeanne Graham emailed Brashear some questions about best practices. His answers are below, edited for length and style.
Texas Lawyer: For what types of legal work do you typically hire outside counsel?
James Brashear: Any decision to outsource legal work is fundamentally about whether to pay a premium price in exchange for the flexibility of access to on-demand legal services. For any potential legal project, in-house counsel has a choice of performing the work, deferring the work, refusing the work or outsourcing the work. For retained work, one question is whether in-house counsel has expertise to perform the work at an acceptable level of quality. If not, then in-house counsel must assess whether it is practical to develop sufficient expertise through training or hiring, or whether it is more cost-effective to outsource the work. I tend to outsource legal work that has some combination of the following:
• is infrequent or ancillary to the client’s core business operations;
• does not justify long-term in-house staffing because it is short-term or highly cyclical;
• benefits from specialized expertise, licensure, language ability or location;
• leverages exposure to similar work performed for comparable clients; [or]
• enhances perceptions of disinterested, independent advice.
TL: What criteria do you consider most important when selecting outside counsel?
Brashear: I hire lawyers, not law firms, although the resources available to support the lawyer are relevant for some types of projects. Fundamentally, I have to trust the lawyer’s ethics and judgment. I want to work with lawyers who are humble, efficient, prompt, agile with technology, collaborate well and communicate succinctly in plain English. I’m impressed by lawyers who have a good sense of perspective and suggest practical solutions to business problems, not merely offer legal advice.
TL: What can outside counsel do to make you think they have performed beyond your expectations?
Brashear: Outside counsel exceed my expectations when [they] behave consistently as if they were virtual employees at my company. They do that by demonstrating an effort to know and understand the key people inside my company; our key customers, partners and competitors; how our company operates; and important issues facing our business and industry. For example, they do not merely copy me on a client mailing; they send me an email pointing out how the legal development is relevant to my business.
In that same vein, I’m impressed when outside counsel adopt the products or services of the companies they represent. I highly prize lawyers who show how much they value their relationship with my company. For example, I worked for an employer in the travel industry at the time of the 2001 terrorist attacks. One of our outside law firms recognized the stress those events placed on our business, so it offered to discount and freeze its billing rates. The loyalty that firm showed my former employer is one reason the firm today represents my current employer. They demonstrated they are business partners, not merely vendors.
TL: Under what circumstances do you expect outside counsel to offer alternative billing?
Brashear: When the scope of a legal project is reasonably defined and the work required is reasonably foreseeable, law firms should be able to bid the work on a fixed-price project basis at a price within the client’s perceived value range. There is some risk in fixed-pricing for both the client and the law firm. That risk lessens the more the client and law firm work together, and there are ways to share the risk. The biggest driver of alternative billing arrangements is that they help general counsel manage the legal department within budget. Predictability of quarterly expenses is important for accurate public company earnings forecasts, and legal expenses are no different. No matter the type of service, customers prefer the certainty of a set price for a deliverable. No customer wants the price to increase because the vendor underestimated the effort required to perform the work.
I don’t consider hourly rate discounts to be alternative billing arrangements, because they do nothing to improve the accuracy of legal budgeting. The biggest challenge to broader adoption of alternative billing arrangements is reaching agreement on how to value the work provided by outside counsel. Determining value requires an assessment of the price paid for the work in comparison to many subjective factors such as: quality of work, usefulness of work product, effectiveness in producing the desired outcome, timeliness and ability to collaborate with client personnel. The vendor’s internal costs hardly enter into the equation from the client’s perspective. . . .