Kent Walker, Google general counsel (rethinklaw.org)
Google Inc.’s lawyers are not afraid of change. And they can’t be, not at a company that is creating or entering new businesses, expanding around the globe and hit with novel litigation and regulatory challenges seemingly every month.
And now, of course, the company’s structure is undergoing a transformation, and so too the legal department. With the formation of Alphabet, the company’s big search and related businesses will operate as Google while its health care and more experimental “moon shot” businesses—like fiber Internet and driverless cars—will be run from separate silos. As part of that shift, longtime Google general counsel Kent Walker has taken on a new set of responsibilities and six additional direct reports even as other pieces of his portfolio are shipped off to Google’s new sister business units.
“We’re working through how exactly legal support will be structured,” Walker said in an interview in his Mountain View office earlier this month, “but the basic line is that these will be part of Larry [Page's] vision of having them run independently.”
For the reorg—and Walker has been through three of these before—the company will rely on its strength: amassing and analyzing usage data. Google’s legal department measures the demands placed on it, the processes it uses, the effectiveness of its inside and outside lawyers, all in the search for greater organizational efficiency.
Of course, it’s more complicated than that. “How many words did you write in a year is a terrible metric for a journalist because it incentivizes all sorts of bad behavior,” Walker said. “In the same way, you don’t want to measure a lawyer by how many contracts they put out or how many lawsuits they file.”
Instead, they measure the number of products being launched and how that number affects the workflow of the products and agreements team. They count the number of new suits by type. They look for standard contracts that can be automated and other problems or demands that can be solved via algorithm. “We’re doing some good work there, but it’s not at all a solved problem.”
Heading that effort is Mary O’Carroll, director of the company’s legal operations department, who joined the fast-growing company in 2008.
“There was basically no job description,” O’Carroll said. “It was like ‘We’re growing like crazy, please come in and fix this.’ “
Her department started with outside concerns, like where legal spend was going and how to define value in outside counsel. Then it partnered with the intellectual property department to build software and tools to streamline processes.
Now it gets to look inwards. Her team of a dozen people interviews members from the legal department and tries to find efficiency bottlenecks. For example, O’Carroll’s team discovered that Google’s employment lawyers were hit with a growing number of emails and phone calls with requests that, two-thirds of the time, didn’t require a lawyer’s expertise. With the help of the IT department, her team built an FAQ self-service site. The site has answers to the most commonly asked questions and points of contact for further, in-person advice. According to O’Carroll, queries to the employment law team have fallen 25 percent.
The legal ops team is split into three groups: financial and outside-counsel management, knowledge management and IT, and internal process improvement and strategy. O’Carroll said her team has had to match the legal department’s growth, which in turn was responding to Google’s growth.
“As maturity grows, your needs grow,” she said.
Deputy general counsel Allen Lo, head of all things patent, has his own legal ops team to support his 125-person department.
The group spots and reports trends and activity involving Google’s inventory of 50,000 filed and applied-for patents. It runs comparisons with competitor portfolios and even seeks to predict which companies are most likely to bring a complaint against Google.
“We’re trying to leverage what I think Google is known for,” Lo said, “which is looking at big data.”
FROM A to Z
It’s only been three months since Google’s surprise restructuring, and the company has just begun to segment the business lines that will be split off from what is classically understood as “Google.” In addition to driverless cars and Internet access, that includes, Google’s funding arms, Google Capital and Google Ventures, and the life sciences company Calico. As these businesses begin to operate on their own, they will find independent chief executives and general counsel. They’ll have independent legal departments, too, Walker said.
“We’re going to try and figure out the most natural and logical place for the legal support to come,” he said. A few of the companies right now are small enough that they don’t need much of an independent legal department, Walker said, and depending on what type of legal support is needed, Google’s core legal department may supply it. The companies will use the same billing and matter-tracking software that is used in the core legal department.
That core group led by Walker will be attached to the business that generates most of Alphabet’s revenue. It includes the search business, YouTube and the Android operating system, which today account for most of the $18.7 billion in revenue generated for the first three quarters of 2015. David Drummond, who joined Google before its 2004 initial public offering, will be Alphabet’s chief legal officer, the same title he had at Google pre-Alphabet. (Drummond came from Wilson Sonsini Goodrich & Rosati, and Google still has close ties to Wilson: At least 18 Google lawyers cut their teeth at Wilson Sonsini, and the firm continues to handle many of the company’s acquisitions.)
Since Walker joined Google in 2006 he has reported to Drummond. But now he will report to new Google division CEO Sundar Pichai. And the general counsel hired by other divisions will likewise report to their respective division CEOs.
But for now, Walker’s job has gotten wider. He’s picked up four additional departments—ethics and compliance, public policy, Google’s charity arm Google.org plus the product quality operations team that writes policies around user-generated content. There’s already a template for how those other businesses will organize their legal departments. Nest Labs Inc., which Google bought for $3.2 billion in 2014, already has a somewhat independent legal department, headed by its own general counsel, Richard “Chip” Lutton Jr.
AN ACCOUNTABLE STRUCTURE
A graduate of Harvard University and Stanford Law School, Walker started practicing at Howard, Rice, Nemerovski, Canady, Falk & Rabkin after a clerkship and then became a federal prosecutor in the Northern District. He was hired by eBay in 2003.
Today he works out of a cubicle he shares with an assistant, surrounded by stacks of paperwork. Dressed in jeans and a plaid shirt, he’s personable and—given the work piled on his desk and the fact he was about to leave for a trip across Asia—remarkably relaxed.
Walker sounded calm about the complex process, in part because he’s been through these things before. Michael Yang, now general counsel at Pinterest Inc., went through a Google reorg when he managed the old product counsel group. When re-minted CEO Larry Page decided in 2011 to reorganize Google into six business units, Drummond ordered the legal department to follow suit.
“What came out was exactly what David and Larry intended,” Yang said. “You have legal teams that are accountable to the product and business decision-makers across the board, and you avoid the situations where someone in charge of a business unit has to go to three legal departments to get their questions answered.”
Getting there wasn’t easy. Yang recalled two attorneys—one senior product counsel and one senior commercial counsel—who both worked on Google’s Maps service. In combining the commercial and product teams, the lawyers had to choose who would lead the group, Yang said. That was tough on the lawyers, but the right outcome, Yang said. “Ultimately, an accountable structure is what every business needs,” Yang said. “Every time a company reorganizes, you have to reorganize the legal department.”
Yang, who predated Walker at Google, said Walker came in seeing how important it would be to manage the growth of the legal function. “[Kent] was one of the first people to start tracking certain metrics, which we didn’t do prior to that. He knew that over time we’d have to understand how to triage work and to manage it.”
Walker said he can “probably” be credited for building the legal operations department, lightly laughing. “I hired [Mary] so I take responsibility.”
A DIFFERENT GOOGLE TODAY
Google’s legal department is a behemoth. When Walker joined the company about eight years ago, the legal department had fewer than 150 employees. Now it has almost 1,000, half of them lawyers.
When Walker started, there was no Android, no smartphone patent wars to be waged. Gmail and Maps were in their infancy. It’s a different Google today, Walker said.
“We’re working on machine learning, virtual reality, new forms of communications tools, Project Fi—that gets you into a lot of new legal areas,” he said. (Project Fi is its entry into mobile phone service.) There aren’t legal experts for many of those areas, and looking for precedent brings few answers. So, instead, Walker embraces uncertainty. Especially when choosing outside counsel.
“There is no 99 percent certainty in a legal opinion. You’re making a guess as to how a product will be received, will it be popular, will that influence the overall legal, regulatory, legislative environments?” Answers to those questions won’t be found in law books, he said. “So, spending a huge amount of time and effort to write exactly the right memo with [99.9 percent] precision, on an issue that’s inherently subjective and unknowable, is a misfit.”
Dominating its litigation docket today are patent, copyright and other IP matters. In litigation in the Northern District of California, it’s most commonly called outside counsel include Durie Tangri, Perkins Coie and Cooley. Quinn Emanuel Urquhart & Sullivan is another go-to firm, handling much of the patent litigation against Android and its partners.
Pinterest’s Yang is one of many Google alumni now heading up tech legal departments in the region. They include DropBox GC Ramsey Homsany, Square GC Dana Wagner and Instacart GC Nikhil Shanbhag
“I think of us in the way G.E. thought of itself, as creating a generation of business leaders who would go off and lead other companies,” Walker said. “If we can be that in the local legal community, I think we’ve done our job well.”
Running Google legal day-to-day is a big job. Those who’ve worked for Walker marvel at how he’s done it. “He is one of the smartest people I’ve ever met, just in intellectual capacity,” said DropBox general counsel Homsany. “And I say that having worked with a lot of really smart people.”
“He’s probably the single hardest-working person I’ve ever worked with,” Yang said. And he can run on little sleep, both said.
Walker acknowledged that he puts in long hours so as not to bottleneck the business.
But his success at Google he attributes mostly to being able to hire the best. That, and being OK with uncertainty, a trait he’s relying on a lot as Google Legal translates into Alphabet. ” ‘I’m still figuring it out’ is the only candid answer,” Walker said. “ You’re there to offer advice and counsel and break ties if needed and help make sure that we’re still aligned with where management wants to go, and you keep your fingers crossed. That’ll be the headline, keep your fingers crossed.”