Welcome back to Inside Track!

More general counsel and chief legal officers are being elevated to the CEO position or being given additional responsibilities in the C-suite. The trend makes sense since, over the past decade, the role of the general counsel has grown from that of just a lawyer to someone who is more involved in business decisions.

Amy Krasner, one of the founders at Avalon Legal Search, said for many GCs knowing the law is almost secondary. This shows that GCs are ready to help find ways to drive revenue.

“The best GCs are not just excellent lawyers,” Krasner said. “They’re good lawyers and understand how to drive business.”

The ability to drive business and navigate through the law may give boards of directors the best of both worlds when selecting someone new to lead the company. Mike Evers, the founder of Evers Legal Search, once told me it used to be rare for a general counsel to become a CEO. When a CEO is ousted in some kind of scandal, he said the GC or CLO will take over in the interim.

That appears to be the case for Wells Fargo who appointed C. Allen Parker to lead the company in March on an interim basis. However, the company has not yet named a permanent replacement.

What skills should a general counsel who hopes to be a CEO one day have? Let me know by emailing me at [email protected].

What’s Happening 

 

 

Checking For All Cracks

Mergers and acquisitions have never been easy. However, in the internet age companies must make sure the entity they are buying has not been the victim of a cyberattack which they could be liable for further down the road. Law.com reporter Phillip Bantz spoke with NAVEX general counsel Shon Ramey on M&A today. These are some takeaways from their conversation.

➤ NAVEX recently acquired the software company Lockpath. Ramey said his role in the acquisition was ensuring all legal aspects go smoothly, such as due diligence and interacting with investors and outside counsel. He said he and the rest of the executive team were responsible for ensuring a smooth transition after the acquisition was complete.

➤ Ramey said companies not only need to confirm they have never been targeted in a breach but also include their reviews of code and current practices to ensure there are no vulnerabilities that may be exploited in the future.

➤ Two of the biggest overlooked cybersecurity threats are people and data, Ramey said. Companies that have not done so, he said, should strongly consider a data mapping exercise to understand what kind of data the company is bringing in. Ramey added he believes most people are trying to do the right thing when it comes to cybersecurity and handling data. But many of those people are not properly trained and unwittingly put the company at risk.

 

A Lower Standard

The U.S. Court of Appeals for the Second Circuit ruled in U.S. v. Ng Lap Seng that federal prosecutors do not need to meet the heightened standard of showing that a bribe was in exchange for an “official act” in Foreign Corrupt Practices Act cases.

Emily Westridge Black, a partner at Haynes and Boone in Austin, Texas, said the ruling will embolden federal prosecutors.

“People on the defense side of FCPA cases have long felt that the agencies have taken a tremendously extensive view of their jurisdiction to prosecute FCPA and types of conduct that are violative of the FCPA—and this does nothing to rein that in,” Black said.

However, the ruling does note that the FCPA requires a quid pro quo and that proving that a defendant offered or provided a payment is not enough by itself to satisfy the statute.

“It’s just that the quo is a lot broader under the FCPA,” said Jason Jones, a partner at King & Spalding. “I think it’s good clarity, but I don’t think it would be a surprise to most prosecutors.”

What I’ve Been Reading

Tyler Browning, the general counsel of recycling company ERI, said the company’s greatest successes are its partnerships with New York City and Los Angeles. In a profile in Vanguard, he said one of the biggest challenges he has faced is that many corporations did not realize they had an e-waste problem. “The ERI team has built an incredible company focused on the security of data and the protection of the planet. For me, it doesn’t get more exhilarating than that,” Browning said in the article.

Canadian companies can face legal action in Canada for the actions of their foreign subsidiaries, according to a report in The Canadian Lawyer. The development in the law stems from a decision in Garcia v. Tahoe Resources Inc. in which a Canadian appellate judge wrote: “The question is not whether Canada’s legal system is fairer and more efficient than Guatemala’s legal system. It is whether the foreign legal system is capable of providing justice.”

In-house counsel in the U.K. need to begin preparing for two changes to employment law that take effect in April 2020, according to a report in Lawyer Monthly. The new rules will require private businesses to deduct income tax and National Insurance contributions via payroll from fees for services paid to a personal service company. The report said in-house counsel should first audit off-payroll labor.

Don’t Miss

Thursday, Aug. 29 – The Barristers Club Diversity Committee and Airbnb will be hosting an In-House Diversity Attorney Mixer. The event will take place from 5:30 to 8 p.m. at the BASF Conference Center in San Francisco.

Wednesday, Sept. 25 to Thursday, Sept. 26 – Corporate Counsel will be hosting its annual General Counsel Conference at the New York Marriott Marquis. Speakers this year include Peter Gyr, global general counsel, wealth management at JP Morgan Wealth Management; Graham Luce, general counsel at BJ’s Wholesale Club; and Megan Ryan, general counsel at NuHealth.

Monday, Oct. 14 to Wednesday, Oct. 16 – The Minority Corporate Counsel Association will be hosting its Creating Pathways to Diversity Conference in New York at the New York Hilton Midtown. The MCCA will host a Diversity Gala on the last night of the conference at the American Museum of Natural History.

On The Move

 

 

✦ Carnival Cruise ✦ Peter Anderson, a former environmental prosecutor, has been named the chief compliance officer of the cruise line. Before being made the top compliance official for the cruise line, he served as an outside consultant to Carnival and worked at Beveridge & Diamond as the head of the firm’s white-collar compliance group.

✦ Vlocity Inc. ✦ Tom O’Brien has been named the general counsel of the cloud computing company. He reports to the company’s chief operating officer Jeff Amann. Before joining Vlocity Inc., O’Brien worked as the deputy general counsel Glassdoor.

✦ Neuralink ✦ Alex Feerst has been named the first general counsel of Elon Musk’s human brain-machine interface company. He previously worked as the general counsel to the publishing platform Medium.