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When Laura Fennell joined Intuit Inc. as general counsel two years ago, she hit the company’s legal department with a wrecking ball. The 45-year-old working mom tore down the walls that defined the in-house lawyers at the Mountain View maker of tax preparation software and then rebuilt the department from the ground up. Two years into the remodel, Fennell has replaced about half the staff of the 25-lawyer legal and compliance department. From the rubble emerged an arguably smarter, more disciplined department aligned with the business goals of the company. “My organization isn’t just there to make diving catches,” Fennell said. “We’re there to understand the business, where it’s growing, and trying to enable the business to make better and faster decisions.” Fennell has recruited lawyers who have strong leadership qualities and organized them into practice groups that work closely with business executives. On discovering that the company had no patent attorneys in house, she built an intellectual property practice from scratch. An internal “self-help” Web site is in the works, putting basic legal concepts at the business departments’ fingertips. Forging close relationships with Intuit’s business leaders has helped Fennell implement what she described as quantum changes. The impact has resonated throughout the company. “The ‘after’ looks like there really is a legal department,” Brad Henske, Intuit’s senior vice president and head of the consumer tax group, said. “It used to be sole practitioners, not integrated [with the company]. The lawyers are now more actively involved and, more importantly, focused on the right stuff.” Fennell said some people left Intuit to finally pursue goals they had on the backburner, while others no longer sported the right skill sets. “Significant change forces these hard decisions and good change, which this was, enables these decisions [to be made] quickly rather than letting the organization get bogged down.” Those who stayed say the makeover brought their work to a new level. Michael Lyons, who now heads the commercial practice group, said the new work flow makes better sense. “I’ve been here more than six years, but I feel my job is brand new to me,” he said. “I’m energized again.” FORM FOLLOWS FUNCTION Fennell joined Intuit from Sun Microsystems in April 2004 and spent the first month asking questions. At the time, Intuit, which has 7,000 employees and posted $2 billion in revenue last year, was busily expanding beyond personal finance with new products for managing medical bills and investment properties. But while the company’s legal department was made up of smart lawyers, Fennell said they were two to three years behind the business’ effort to redefine itself. “This was a group that was left alone. It was reactive. It responded to requests from the business, not helping to improve the business,” she said. “You might as well just use outside counsel.” Each lawyer’s work was organized around individual product lines, leading to tunnel vision. “There was no mechanism for sharing information. Each decision was made in a vacuum,” she said. In addition, Fennell said Intuit had 11 patents in its portfolio � but no patent lawyers. “No one was watching the patent portfolio. I didn’t get a good explanation for why; no one seemed to own it,” she said. “We sat around and realized it must be a problem. If we’re going to be a business enabler and help protect the company’s competitive advantage, this is an area we ought to care about.” Since then, she has built an intellectual property practice from scratch, hiring two IP lawyers, two patent paralegals and a handful of support staff. Calling on her 11 years experience at Sun, most recently as acting general counsel, Fennell created a management team to report to her and applied what is known as the Six Sigma method of problem analysis and resolution to analyze methods and repair weaknesses. It was an extraordinary catalyst for change, Fennell said. “If you put eight smart individuals in a room and make them accountable for the entire business, they will be inspired to fix it.” With an eye toward the big picture, Fennell set up four practice groups, with an attorney at the helm of each. These include commercial, global risk mitigation, intellectual property and corporate and M&A. The practice heads interact on a regular basis with a series of “legal business partners,” who act as liaisons between Intuit’s executives and practice group heads. These partners are the “eyes and ears” for the business leaders, making sure they know how to access resources in the legal department and encouraging a sharing of information so decisions aren’t made in a vacuum. Intuit’s lawyers train company business managers at all levels in basic legal concepts, from the marketing staff to chief executives. Fennell said it makes sense to wire legal knowledge into “the brains of the business people, making them able to exercise better judgment faster and more efficiently.” Fennell also changed the way the work was organized. Aligning the groups around individual product lines bred redundancies and various levels of quality of service. The practice heads are now organized with a broad view of all of Intuit’s businesses. Lyons said taking that view, for example, has helped the legal department streamline Intuit’s marketing strategy. “We’re able to see recurring issues in different product lines,” Lyons said. “We have broader visibility.” The bulk of Intuit’s legal work revolves around intellectual property, corporate and securities matters and acquisitions. Fennell said part of the challenge involves maintaining a careful balance of short- and long-term goals. The company is currently involved in a legal duel with competitor H&R Block over advertising. Earlier this year, H&R Block filed suit in Missouri federal court contending that Intuit’s ads declaring TurboTax prepared more returns last year than all the H&R Block stores combined were not true. Intuit revised its campaign as a result. In early April, the company then sued H&R Block for alleged copyright infringement, alleging that the Kansas City, Mo.-based company was inappropriately copying its ads. Quinn Emanuel Urquhart Oliver & Hedges partners Claude Stern and Margret Caruso are representing Intuit in the suits. BUILDING LEADERS Fennell has attained a status not all Silicon Valley general counsel enjoy. Senior executives rely on her not just for legal and fiduciary guidance, but for recommendations on everything from personnel policies to decisions about acquisitions. “The number of lawyers that can speak like business people are relatively rare,” Intuit’s VP Henske said. “Laura is an exception. It’s why we hired her.” Gordon Davidson, chairman of Fenwick & West, which has advised Intuit on securities, mergers and acquisitions and IP since the early 1990s, said Fennell’s reorganization allows Intuit to do more legal work in house and has made his work for the company more efficient. “Laura brought a level of professionalism and process commensurate with the way [CEO] Steve Bennett runs the company,” Davidson said. Davidson said he is often on conference calls with Intuit’s executives and Fennell. “Laura is very influential in making policies and decisions,” he said. “She’s very good at coming to a crisp recommendation and persuasively advancing her point of view. And that’s lawyering at its best.” Kimberly Fullerton, a legal recruiter with Major, Lindsey & Africa, who has worked with Intuit in the past, said that because of Fennell’s emphasis on building teams, attorneys in the department have a lot of responsibility and opportunity to work closely with the company’s business executives. “She hires very good people and she gets the best out of them because she gives them the opportunity to lead,” Fullerton said. IP lawyer Anirma Gupta and corporate securities and M&A attorney Jeannette Laidlaw both followed Fennell from Sun Microsystems. Several hires also came from Fenwick, including Karen Anderson, who joined Intuit’s litigation group. Fennell said that what her team has done and continues to do is “just astounding.” “Everything about their life at Intuit has changed in the last two years,” she said. Performance reviews were once sporadic. Now staffers receive regular feedback tied to established written goals. “You raise the bar and people jump up to meet it.”

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