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There’s no getting around the facts: Law is a business. Law firms are companies. And companies need corporate counsel. The idea of a “lawyer’s lawyer” who handles the firm’s personal legal work is not new. Most largish firms have one or more lawyers informally dedicated to ethics compliance, risk management, insurance, and even litigation matters. But with lawyers finding themselves more and more the subjects of government scrutiny and the targets of lawsuits, de facto has become de jure at many large firms. A survey last March by Altman Weil Inc. of Newtown Square, Pa., found that 63 percent of the nation’s 200 largest firms had designated a general counsel and 10 percent planned to do so in the next year. The concept is starting to catch on. Drinker Biddle & Reath and Duane Morris have had a general counsel for about seven years. McCarter & English named its first general counsel in October 2003, and Gibbons, Del Deo, Dolan, Griffinger & Vecchione did the same this past January. McCarter and Gibbons, Del Deo say their legal malpractice carrier, Attorneys’ Liability Assurance Society of Chicago, encouraged them to carve out general counsel posts. The trend is driven by traditional malpractice claims, clients’ conflict suits, third-party suits alleging that lawyers assisted in their clients’ illegal acts, the Sarbanes-Oxley Act of 2002, and increased prosecutions of lawyers over clients’ questionable tax shelters. And more firms can be expected to follow suit, say consultants. “Five years from now, I suspect you’d be hard pressed to find any firms of 150 lawyers that don’t have [a general counsel] in place,” says Altman Weil principal Tom Clay. All the firms responding to the Altman Weil survey had hired their general counsel from within. Gibbons, Del Deo and McCarter, with offices in New Jersey and New York, each gave the title to longtime partners who previously handled some of the firm’s legal business on a less-formal basis. Gibbons, Del Deo selected litigation and intellectual property partner Michael Quinn as part of an overhaul of the firm’s management structure. Quinn previously had been designated the firm’s loss prevention partner, requiring him to be the liaison with its liability carrier. Now he also investigates disputes with clients and intercedes in conflicts of interest. When McCarter named financial and product liability litigator Richard Eittreim as general counsel, it made official a role he had held informally for several years. For Quinn and Eittreim, the symbolism of the title is important for the message it sends. Quinn says the most important advantage is that colleagues apprise him of potential legal problems early on. “What we teach is, the quicker the person in my chair gets an issue, the easier it is to resolve. Our claims history, I think, proves that it’s a procedure and philosophy that severely limits any potential claims against the firm,” he says. Eittreim says the title gets out the word that his door is open. “Once you have the title, people realize they’re supposed to go to the general counsel,” says Eittreim. VISITS APLENTY For Michael Silverman, general counsel at 550-lawyer Duane Morris, the role entails a lot of visits to the firm’s 20 offices. He assumed his post in June after the firm’s first general counsel, Gene Pratter, was appointed to the federal bench in Philadelphia. “For Duane Morris, [the general counsel position] demonstrates that the firm considers risk management, professional responsibility, and loss prevention to be a high priority. It helps to have someone who’s approachable and willing to listen so that people will feel comfortable raising issues of concern,” says Silverman. The duties of general counsel vary widely. In the Altman Weil survey, respondents spent a mean of 43 percent of their time on such responsibilities. Quinn declines to say how much of his time is taken up by his general counsel role, but says he bills as many hours as other partners. Eittreim says he spends more than half his time on his general counsel duties. Silverman, a litigator in the information technology group, spends 50 to 75 percent of his time on general counsel work. He delegates the bulk of the conflicts work to a six-member committee, and last summer he was joined by the firm’s first assistant general counsel, Sarah Bricknell, who focuses on risk management and professional conduct matters. Eittreim says the biggest part of his general counsel job is helping resolve client conflict-of-interest issues, and sometimes that means telling a partner to turn down a new client. “I’m probably an unpopular guy,” he says. Quinn also spends much of his time on conflicts, but he says that role doesn’t necessarily lead to acrimony with other lawyers at the firm. “We have a defined role in which my only dog in the fight is to protect the firm’s interest, to make sure we do things that are ethical,” he says. Consultants say general counsel are seen as more impartial at policing client conflicts than are firm managers, who might be reluctant to turn away business because their eye is on the bottom line. Another reason for appointing a general counsel is that conflict-checking software is far from perfect, says Wayne, Pa., law firm consultant Robert Denney. “The pressure on firms to generate new clients and new business can often result in an overly enthusiastic decision to take on a client or a matter,” says Denney. “And secondly, the research or due diligence that has to be done is very often very time-consuming, no matter how sophisticated their database is.” Selection of a general counsel is also touted as a way to counter the erosion of privilege for internal communications at a firm. “Because some of the decisional law out there has eroded the attorney-client privilege in terms of law firms, it seemed a more prudent course to formalize the role of general counsel,” he says. Silverman says that theory is untested. “I think it can’t hurt, and it may help,” he says. Other large firms are aware of the trend toward general counsel, but have yet to take the plunge. Pitney Hardin, for example, spreads around the business of professional responsibility, loss prevention, regulatory compliance, personnel issues, and contractual matters to various partners and committees. The Florham Park, N.J., firm decided there wasn’t enough legal business to justify creating a general counsel position, says managing partner Dennis LaFiura. “We have looked at it in terms of whether it would be a wise use of our resources and concluded no,” he adds. Charles Toutant is a reporter for the New Jersey Law Journal , the ALM publication where this article first appeared.

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