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During his 17 years as GC of General Electric Company, Benjamin Heineman, Jr., was one of the most influential in-house lawyers in the country. He not only remade the conglomerate’s legal department, which currently has about 1,000 lawyers spread among its 11 divisions; he also changed the way lawyers and legal recruiters view in-house practice. In January Heineman became senior vice president for law and public affairs, and Brackett Denniston, GE’s litigation chief, took over as general counsel. Denniston himself represents one of Heineman’s major legacies: hiring high-profile attorneys for top law department positions. The 56-year-old Denniston joined GE in 1993, after having previously been chief counsel to former Massachusetts governor William Weld and a partner at Boston’s Goodwin, Procter ["The Shortlist," October 2002]. Denniston recently talked with Corporate Counsel staff editor Catherine Aman about ensuring quality and controlling costs among the roughly 100 firms that handle most of GE’s outside legal work. Corporate Counsel: Ben is something of a legend in the in-house world. How does it feel to replace him? Brackett Denniston: Well, it’s a great honor, first of all. Second of all, no one can fill Ben’s shoes. [But] I will do my utmost best to uphold some of the great traditions that Ben has installed and to see what we as a legal organization can do to improve. When you succeed someone who is so good and has done so much, you can’t hope to duplicate what that person did � you have to take your own style and do your best and lead. CC: What are the top things you’re going to do to control outside counsel costs? BD: What I’m going to emphasize is, first, quality. We’re going to ensure that we have the world’s best lawyers. . . . At the same time, we’re going to be concentrating on controlling the costs. We’ve done that through a variety of mechanisms successfully over the years � through negotiating preferred provider arrangements, through controlling some of the costs that law firms sometimes try to pass on � and we’ll continue those. We are looking at broadening an initiative that one of our businesses, Commercial Finance, has utilized, which is an [online] auction among a group of highly qualified providers. [The GE division invited firms to bid for all of its legal work for a two-year period ("Priceline for Lawyers," January).] . . . Whether we will do auctions everyplace is a question that remains open at the moment. We’re going to look and see what the results in Commercial Finance are. [The results were due in March.] Then we’ll see how we adapt that to the rest of the legal organization. To me, cost control is only part of the mission. Quality control is a more important part of the mission because more cost comes from bad lawyering than comes from charging prices that are too high. We’re also going to look a lot harder for great lawyers who aren’t in high-cost places � in New Orleans, just to take an example, or St. Louis. We’ve had some success in that, but we’re going to be more vigilant, more searching. CC: Can you tell me what cities besides New Orleans and St. Louis you’re considering? BD: That’s prejudging the process. It wouldn’t necessarily be outside New York or Washington. It could be in those metropolitan areas where there are high-quality, somewhat lower-cost providers. This isn’t a geographical thing, it’s a quality-and-cost proposition. But again, I find these discussions about cost control to be misleading. Cost is important, don’t get me wrong, it’s very important, but quality is more important. CC: What about offshoring? GE has sent some U.S. legal work to in-house lawyers based in India. BD: That’s very limited, and I expect it to continue to be very limited. Our first requirement is that we have to do it in a way that’s ethically compliant. Second, we have to do it in areas where we can acquire the expertise to help us. And there are some opportunities, some significant opportunities. But it’s not going to change fundamentally the way that we do business. We’re a global company. We have to look for global brains of all kinds, and whether it’s in India or Germany or New Orleans, we have to look for the best possible brains. CC: Do you see this focus on quality as a shift, as something new? BD: I would call it evolutionary. It’s been Ben’s focus too. I may give it some more visibility but, boy, Ben was pretty maniacal about the quality of counsel.

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