Welcome back to Inside Track, I’m Rebekah Mintzer, in-house news editor at Law.com.
It’s only my second week as the author of this briefing, but it’s already keeping me busy, as there’s so much going on in the world of legal departments and in-house counsel. In this edition, we’ll look at the big bucks companies have spent lobbying around net neutrality. And, speaking of money, in-house legal leaders have continued to send us scathing feedback on the recent Milbank associate raises and their fallout.
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What’s Happening –
Ops Across the Pond
The growth of legal ops in the U.S. has been impressive, but are legal departments in Europe making the same strides when it comes to building their ops functions? Dan Clark set out to answer this question recently, speaking to ops experts about some of the key similarities and differences.
Here’s some of what he learned:
● Who’s the Boss? While ops is thriving in Europe, U.S. companies are still more likely to have a dedicated legal ops leader. “We’re seeing the same progression in Europe as there was in the U.S.,” Connie Brenton, ops director at NetApp and chief executive of the Corporate Legal Operations Consortium told Dan. “Someone who liked technology or liked process would raise their hand and then it became more and more a part of their role.”
● Less Litigious. Since Europe tends to be a bit less litigious than then U.S., legal operations in Europe may be less focused on controlling litigation spend and more focused on other tasks. Maybe more in-house leaders should consider getting a job overseas!
● Tech Priorities. Giving less focus to litigation and spend in that area also makes European legal ops functions a bit different in the way they choose and implement technology—especially in the early stage of building ops. “In the U.S. the first tool is e-billing,” Brenton told Dan.“The first tool in Europe is contract management or artificial technology.”
Associate Salaries Going Up: We Asked, You Answered
In last week’s Inside Track, we shared one legal executive’s biting commentary about the increase in associate salaries at Milbank, Tweed, Hadley & McCloy. Since then, other firms have matched Milbank, and Cravath, Swaine & Moore even surpassed Milbank’s pay scale.
In-house leaders are clearly stewing, even if most are unwilling to use their names publicly.
Here are some of the choice quotes collected by my colleagues Dan Clark and Caroline Spiezio:
Mark Smolik, general counsel and chief compliance officer at DHL Supply Chain Americas said: “If a law firm feels it necessary to pay first-year attorneys an extraordinary $190,000 to remain competitive, then that is their decision. Just don’t ask for me to pay for it.”
One legal operations executive shared this view: “You can keep living in your ‘reality distortion field’ and pay a first year associates $190,000. You certainly will attract lawyers to come work for you but we are firing you everyday, you’re just too busy playing #metoo to notice.”
Another legal ops insider said: “It would be wise for firms to message to the market how they intend to fund these increased costs and potentially balance this message with innovation that is occurring at the firms aimed at reducing costs and creating efficiencies.”
I’d love to hear from more readers on this topic. Drop me an email here.
Following the Money
Monday marked the end of net neutrality in the U.S., at least for now, as the FCC’s repeal of this Obama-era policy went into full effect. In the lead up, my colleague MP McQueen reports, both telecom companies, which tend to favor the net neutrality repeal, and tech companies, which generally want the regulation reinstated, have spent plenty of money lobbying around legislation on the issue.
➤ Telecom v. Tech. MP reported that about 18 telecommunications companies, trade and conservative advocacy groups spent at least $110 million in 2017 on federal House and Senate lobbying aimed at securing the end of net neutrality.
Meanwhile, about 24 groups, including internet-dependent companies, spent $39 million last year trying to keep net neutrality. (Caveat: MP said not all of the figures here are exact, because some lobbying records named net neutrality among several telecom issues that were the subject of advocacy.)
➤ Big Spenders. As for specific companies, MP reported Amazon.com spent at least $13 million to support net neutrality in the House and Senate in 2017, while Facebook spent $11.5 million, also in support.
What’s just as interesting as MP’s story though, is how she sifted through a maze of lobbying records to put her piece together …
MP told me one of the major challenges was “deciphering the opaque names of the lobbying organizations, bills and acts whose titles often described the opposite of what an ordinary person might imagine, such as the FCC’s ‘Restoring Internet Freedom Order.’” (That’s D.C. speak for “ending net neutrality.”)
She also said it was hard to find everything she needed in one place. She used the databases at OpenSecrets.org, part of the Center for Responsive Politics, which are a great resource but she said “telecoms lobby on so many bills and matters it required a lot toggling to the actual federal disclosure forms to find out which specific bills the law firms lobbied on and cross-referencing at Congress.gov, another website, to find out what was in the bills.”
➤ Late last week Corporate Counsel announced the runner ups in our 2018 Best Legal Departments competition. Congrats to the legal teams at Hulu, Dropbox and AbbVie, our department runners up. Also a shout out to our GC of the Year runner up, John Finley of Blackstone.
➤ In-House reporter Caroline Spiezio recently spoke with Louise Pentland, chief legal officer of PayPal, in a one-on-one video interview. Pentland weighed in on the major role she’s playing on the business side of PayPal and spoke about how she works with the company’s other well known legal leader, GC Wanji Walcott. Watch the interview here.
Don’t Miss –
Thursday, June 14. The American Lawyer and LegalWeek will present the Transatlantic General Counsel Summit 2018 in London. The summit provides a platform for some of the most elite general counsel in the U.K., Europe and U.S. to identify and determine the meaningful difference the legal function can make when contributing to a company’s strategy.
Wednesday, June 20, Global Leaders in Law will hold a sessions on “Changing Corporate Culture” in Geneva and Brussels. From June 25-29, the organization will hold its Mini MBA for GCs in Oxford, UK. GLL is an invitation-only membership group, offering GCs a global platform for in-person collaboration to exchange ideas and receive advice and guidance from peers. For more information, contact Meena Heathat firstname.lastname@example.org.
On the Move –
A CLO Among CLOs. Even a group full of in-house counsel needs a lawyer. The Association of Corporate Counsel recently named Susanna McDonald as itsnewest chief legal officer. McDonald has been with the global in-house organization, which has more than 43,000 members in 85 countries, since 2008. She replaces Amar Sarwal, who is leaving his post to be a stay-at-home dad.
School’s In. Maybe her new job will be a learning experience. TCS Education System, a nonprofit education organization based in Chicago has named Deborah Solmor as its general counsel and corporate secretary effective June 25. Solmor was most recently CCO and deputy GC for litigation at Career Education Corp. Before that she spent more than two decades at Skadden.
Meanwhile in China. Shaolin Luo, a former partner at Simpson Thacher has been hired by private equity client YunFeng Capital as its new GC. YunFeng is based in Shanghai and was co-founded by famous Chinese businessman Jack Ma, who is the chairman of AliBaba. Luo, who was based in Beijing with Simpson Thacher, has long handled M&A and private equity investments related to China.