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Elizabeth Stairs is stressed. As the general counsel of Honeywell Chemicals, a $3 billion subsidiary of Honeywell International Inc., Stairs says she has never been busier. She guides the company through complex business decisions, oversees myriad litigations and has the final word on ensuring that Honeywell Chemicals stays “Sarb-Ox- compliant,” shorthand these days for keeping out of the Securities and Exchange Commission’s crosshairs. “There’s a lot to do,” she says. “There are a lot of times when you’re so focused on getting business matters done that you wonder if something has slipped across your desk that’s going to get you in trouble. After all, these days lawyers are targets.” Other general counsel can relate to Stairs’ anxiety, according to Corporate Counsel‘s 2004 Quality of Life survey. And with good reason. Almost half of the 405 respondents who identified themselves as GCs feel that the corporate scandals of the last few years, and the trials of GCs like Tyco International Ltd.’s Mark Belnick (acquitted in July on charges of grand larceny and securities fraud) and Rite Aid Corp.’s Franklin Brown (convicted in October 2003 for conspiracy, obstruction, lying to federal regulators and witness tampering), have sullied the perception of the nation’s general counsel within the legal profession at large. (Slightly less — 43 percent — of the non-GCs gave the same answer.) What’s more, the folks at the top are putting in longer hours than their underlings. In follow-up interviews, they attributed those hours to the increased scrutiny from regulators, board members, and shareholders. Is the increased vigilance on the part of general counsel justified? Absolutely, says New York University School of Law professor and legal ethics guru Stephen Gillers. “One of the major goals of Sarbanes-Oxley and [the accompanying SEC regulations] was to raise GCs’ antennae,” says Gillers. “The new rules send the message to the nation’s top lawyers that if they’re not more diligent in sniffing out trouble, they’re going to be held accountable.” Interestingly, we found a contradiction in this year’s responses. Despite some anxiety about how they are viewed, the 1,139 in-house lawyers who responded to the survey say that life is pretty good in corporate legal departments. For instance, almost two-thirds of all respondents — both GCs and their underlings — said they were “very proud of being an in-house lawyer.” The majority of our respondents think their department is collegial; that their colleagues are either of above-average competence or very competent; and that their corner of the corporation is well managed. These murmurs of contentment aren’t limited to the rank-and-file; the majority of GCs gave mostly positive answers to questions about workplace contentment. It’s no mystery why the rank-and-file are happy. But how do we explain why CLOs like their jobs so much? Perhaps it’s this: While in-house lawyers have always reported enjoying their work, they’ve often envied successful big-firm lawyers, with their fat salaries and streams of cutting-edge work. But in the post-Enron era, in-house lawyers feel more useful than before, more vital to the smooth operation of their companies. Jeffrey Carr, the general counsel at FMC Technologies Inc., a Chicago-based oil and gas exploration equipment maker, thinks there’s something to that idea. “No question,” he says. “Law departments are getting more recognition and more respect [from senior management], and that makes a lawyer’s job easier and more enjoyable.” For the last six years, Corporate Counsel has surveyed the nation’s in-house lawyers about work-life issues. In the past, we’ve stuck to asking questions about pay, hours worked, outside counsel relationships and the like. Last year we made a methodological adjustment — we allowed lawyers to file their answers anonymously on our Web site. This year we made a substantive change. We asked questions about how the corporate scandals of the last few years — the collapse of Enron Corp. and WorldCom, Inc., the proliferation of SEC investigations and the passage of Sarbanes-Oxley — have affected the working lives of in-house lawyers. Chiefly, we asked questions about three areas: whether the recent scandals have tarnished the reputations of in-house lawyers and general counsel in the eyes of clients, boards of directors and the legal profession at large; whether the scandals have hurt in-house lawyers’ perceptions of themselves; and whether in-house counsel are spending more time on corporate governance issues. For starters, our survey reveals that general counsel are not made of Teflon. When asked whether the recent corporate scandals have “tarnished the legal community’s image of Fortune 500 general counsel,” 49 percent of our GC respondents and 43 percent of the rank-and-file answered yes. Of those groups, 64 and 60 percent, respectively, said that general counsel are viewed by the legal community as “more willing to cut corners for personal gain.” And close to 50 percent of both groups responded that general counsel are perceived by the legal community as “being kept out of the loop” when it comes to critical business-side decision making. For in-house lawyers as a whole, the numbers show much less of a change in opinion: 46 percent of the respondents said the legal profession’s view of in-house counsel was “not especially negative or positive” prior to the scandals, versus 44 percent now. “With all the attention placed on malfeasance [by senior executives], it’s probably not surprising that GCs are taking their lumps,” says Michael Flaschen, a corporate counsel at Amgen Inc., a Thousand Oaks, Calif.-based biotechnology company (and one of the 164 respondents who agreed to a follow-up conversation). “Fairly or not, they’re getting tarred with the same brush that’s tarring corporate America.” Do general counsel think the new negative perception of their job has merit? In a word, no. According to our survey, GCs think of themselves as ethical, even if the rest of the legal profession has its doubts. A whopping 94.8 percent of our respondents said that professional ethics are “very important” in their work as lawyers. And every chief legal officer who answered the question — some 367 men and women — reported being either as conscious or more conscious of his or her ethical responsibilities since the passage of Sarbanes-Oxley than prior to it. In addition to fighting the perception that they’re not completely ethical, general counsel told us in follow-up interviews that they are working very hard to ensure that their businesses stay out of hot water. Take Honeywell’s Stairs. According to her, the company has spent a good part of the last two years overhauling the controls and systems for the company’s financial reporting. “We’ve trained practically every employee [on Sarbanes-Oxley], put a battery of new systems in place, and hired PricewaterhouseCoopers to audit everything,” she says. “It’s hard not to think about ethics when [this law] is staring you in the face day in and day out.” If there’s a note of fatigue in Stairs’ voice, she’s not apologizing. She says that her job is more pressure-packed these days, a sentiment shared by many general counsel, and backed up by our findings. Another sizable minority, 44 percent of GC respondents, say that “the client contacts the legal department more frequently.” Says Stairs: “There’s a heightened focus on me and the other lawyers here. In the back of our minds, I think we feel we could be the next targets were something to go wrong at the company.” Our survey reveals another divide between the bosses and the rest of the department when it comes to workloads and stress levels. Department chiefs are putting in more time at the office: 37 percent say they work 56 hours or more a week, while only 26 percent of the rank and file put in those kind of hours. Granted, in-house securities lawyers or other underlings involved with corporate governance might have a little more on their plates these days, too. “My job isn’t just about doing deals and filing 8-Ks anymore,” says Matthew Maletta, a corporate counsel at Allergan, Inc., an Irvine, Calif.-based biopharmaceutical company. “It’s about having an active dialogue with our board and management and stockholders, and constantly making sure we’re staying in line with the law.” But if these big-ticket worries are keeping the rank-and-file lawyers up at night, they aren’t showing it. The jobs of many in-house lawyers — intellectual property lawyers, employment lawyers, many litigators — simply haven’t been affected much by the events of the past few years. “My life really hasn’t changed,” says Kirk Goodwin, an intellectual property lawyer at Newton, Iowa’s Maytag Corp. “We have a few more things to keep track of, but it’s pretty much business as usual.” Outside of the “Enron effect” questions, the answers we got from this year’s survey respondents track what we’ve seen in previous years. The message? In-house lawyers are generally happy with their work life and the people they work with. Over 60 percent of the lawyers responding to our survey called the “collegiality” within the law department “above average” or “very high.” Roughly the same percentage think their law departments are managed either well or exceedingly well. And over 80 percent rate their colleagues’ competence either as “above average” or “very high.” Furthermore, 84 percent would recommend their company “to a friend as a good place to work.” And 65 percent report having either an “above average” or “very high” level of overall job satisfaction. Other barometers, like compensation and time spent in the office, serve as further evidence that the in-house world is a tolerable place. Fifty-nine percent reported that they are satisfied with their compensation. And when asked about their overall job satisfaction, 83 percent indicated that they were satisfied. What explains the good vibes? Perhaps this: Nearly 60 percent of responding lawyers say they chose an in-house position because they wanted to “work more closely with businesspeople.” Today, they’re getting what they wished for. A plurality, 43 percent, say that the business side contacts the legal department for “general advice” on issues related to corporate governance, securities and accounting more frequently now than before the recent corporate scandals. (The rest either said less, or said there was no change.) And this makes them feel more a part of a company’s central nervous system. “Getting to deal with corporate governance issues has broadened my experience, put me into much more of a management role,” says Jana Eisinger, a senior attorney with Denver-based Qwest Communications International Inc. “And in my mind, that’s a good thing.” Related charts (free registration required): In the Crosshairs Then and Now By the Board Keeping Them Honest Bring In the Reinforcements The 411 on the Department

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