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It took Anastasia “Stasia” Kelly four months to negotiate her first in-house job as Fannie Mae GC in 1995. Brokering her next move, the top legal post at Sears, Roebuck & Co., took just as long. So Kelly was a little surprised when MCI took a mere two weeks this summer to hire her as its new general counsel. But with its mountain of litigation and regulatory problems, MCI (formerly WorldCom, Inc.) couldn’t afford any delays. As it turns out, neither could other scandal-plagued companies that have recently scrambled to hire new chief legal officers. Besides MCI, the list includes Tyco International Ltd., Kmart Corporation, Adelphia Communications Corporation, Arthur Andersen LLP, and Symbol Technologies, Inc. Not only are these companies moving at warp speed, many have gone after candidates with a specific skill set � former regulators or prosecutors whose government experience and contacts can come in handy in a crisis. And while these businesses might be in a rush, they’re not being rash. The GC candidates at this group of corporations have found themselves subjected to unprecedented levels of background checks. Indeed, after all the drama that MCI and its tainted brethren have been through, the last thing these businesses need is to make a mistake in hiring a new legal chief. If they “get it wrong, it can have major consequences for these companies,” says recruiter Catherine Nathan. A headhunter at New York-based Spencer Stuart, Nathan has handled a large number of high-profile placements: MCI, Tyco, Kmart, and, most recently, Symbol Technologies. No Time To Waste A major difference between these searches and traditional recruiting, Nathan says, is their urgency. In most cases, the GCs at these businesses have left quickly and amid a swirl of controversy. The companies � facing a barrage of legal woes, as well as new and complex corporate governance mandates � don’t have a lot of time to waste hunting for a replacement. As a result, courtships that used to take four or six months now happen in two months or less. In MCI’s case, general counsel Michael Salsbury resigned on June 12, just days after two outside reports faulted the law department for numerous lapses ["An In-House Divided," August]. Shortly afterward CEO Michael Capellas tapped Spencer Stuart to find a new GC. On June 27, a Friday, Spencer Stuart’s Nathan called Kelly to tell her that Capellas wanted to set up an interview for that Sunday night. Kelly flew on MCI’s corporate jet from her home in Chicago to northern Virginia, where the telecom is based. She expected to head straight home after having dinner with the CEO. At Capellas’s urging, however, she stayed over to meet senior managers and the board of directors on Monday. Kelly, who says she was in career limbo after leaving Sears at the start of the year, was sold in 24 hours. Capellas interviewed no one else, according to Nathan. June Eichbaum, a recruiter at Heidrick & Struggles International, Inc., led the 59-day hunt this spring for Brad Sonnenberg, the new GC at Adelphia. Eichbaum says she was amazed at the high priority its new CEO, William Schleyer, put on the search. The recruiter was in daily contact with Schleyer via BlackBerry. Candidates would fly to meet the CEO as he traveled the country. Schleyer, Eichbaum says, “eliminated all the [usual] bureaucratic impediments.” Corporate hanky-panky has produced another twist in recent hiring practices. The resumes of GC candidates, like those for executive managers overall, are coming under much closer scrutiny. According to Nathan at Spencer Stuart, people no longer assume that lawyers undergo sufficient character checks on the way to getting licensed. Nathan says she now calls eight to ten references per search, twice as many as before. And Spencer Stuart now offers additional sleuthing, including credit checks and searches of court filings to find out if a candidate has been sued or has filed for bankruptcy, for a minimum extra fee of $6,500. Nathan says all of her “troubled company” clients have opted for the premium service. William Lytton, the general counsel of Tyco since September 2002, says he wasn’t bothered by the added prying. A former prosecutor who served in the Reagan administration, Lytton notes that getting clearance to work in the White House “[requires] a lot more [security] attention than working in a corporation.” Government Experience A Plus Lytton’s bio points to another skill prized by troubled companies: government service. Adelphia’s Sonnenberg worked in the U.S. Department of Justice during the Clinton administration. And new Arthur Andersen GC Mark Pollack’s resume includes six years as an assistant U.S. attorney in Illinois. (Pollack was placed at Andersen by Major, Hagen & Africa and Hughes Consultants.) Companies barraged with subpoenas and lawsuits have an acute need to hire government insiders. After all, their new GCs may be talking to prosecutors and regulators a lot. What’s more, Nathan notes that many in this crop of general counsel are veteran in-house lawyers who may not have Ivy League pedigrees, but who do have extensive experience in managing unwieldy law departments and mercurial corporate directors. Kelly, for example, lacks a telecom background. But MCI judged her experience at the quasi-governmental Fannie Mae, plus her four years running Sears’s law department, to be invaluable. For example, she’s expected to conduct a top-to-bottom review of the company’s 175-attorney law department. The result of numerous WorldCom acquisitions, the department hasn’t undergone a thorough evaluation in years. For recruiters, corporate scandals have been a welcome source of business at a time when hiring has generally been slow. But recent troubles at other companies suggest that the well of opportunity won’t dry up anytime soon.

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