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Gerald Ducharme is leveraging 30 years as an in-house lawyer at Ford Motor Co. and a unique knowledge of state franchise laws into a key role as general counsel of Austin, Texas’ carOrder.com. Ducharme brings not only knowledge of the law, but also business experience and some gray hair to carOrder.com, an 18-month-old company that operates a Web site where consumers can order and buy new cars online without going to a dealer showroom. His skills can be particularly invaluable to a start-up. But carOrder.com has a much broader business plan, and that’s where Ducharme’s knowledge of negotiating deals as a car industry insider can help. carOrder.com plans to buy a network of vehicle franchises; it’s targeting under-performing dealerships in rural areas of states including Texas. Ducharme, 56, is a believer in the potential of e-commerce and carOrder’s business plan. “Ultimately we want to be a dealer. The [online] brokering thing is to establish a name,” he says. carOrder.com, a subsidiary of Trilogy Software Inc., was founded in January 1999 by Brian T. Stafford. He was 21 when Trilogy approved his business plan. Stafford says Ducharme is the “ideal” person for the general counsel job at carOrder.com because he knows state franchise laws, vehicle distribution and regulatory issues. “The automotive industry is heavily regulated � each state has a web of different laws and regulations governing the sale of new cars. We felt it is very important to have a general counsel with automotive industry experience,” Stafford says in an e-mail response to questions about Ducharme. For his part, Ducharme says the job is an invigorating challenge after 30 years at a Big Three automaker. He says his days are varied � “Sometimes it’s totally business, sometimes it’s a mix, sometimes it’s all legal.” He says he’s “absolutely awed” by the enthusiasm of the carOrder.com employees, and excited about the opportunity to help build a company from scratch. Recruiters at two search firms with offices in Austin say Ducharme seems well suited for the job at carOrder.com. “They get twice the skills for the money. That’s real important in that kind of niche,” says Rob Rowland, CEO of Houston-based Associated Counsel of America. “If someone has prior industry experience, it’s a big leg up,” says Larry Prescott, founder of Prescott Legal Search of Houston. An outside counsel for carOrder.com, Haynes and Boone corporate partner Dennis Cassel says Ducharme is important to the start-up because he’s an industry veteran. “In start-ups, generally you see people moving into the general counsel role at the point of time when the economics justify it, versus using outside counsel, but here the regulatory [framework] justifies it,” says Cassel, a longtime outside counsel and board member for Trilogy. HAVING FUN Ducharme didn’t end up at carOrder.com in a quest for the potential riches of a dot-com job. After Ducharme, an assistant general counsel, announced his retirement from Ford in September 1999, he started getting calls from headhunters, including one who was looking for a general counsel for carOrder.com. Ducharme went to Austin in November and met with officials from Trilogy and carOrder.com, but he decided against it. “I was tired. You know what I mean. The jobs are demanding,” Ducharme explains. But after a few months off the job, Ducharme reconsidered. “I had cleaned my closet, my files, the garage. Around February, March, I started getting antsy.” Ducharme joined carOrder.com in May. He signed on for at least a year, but will stay “as long as I’m having fun.” At carOrder.com, he has typical general counsel duties, but because it’s a start-up and he has such extensive industry experience, he sits in on most of the business meetings. The other two in-house lawyers at carOrder.com are working on the sales end, developing leasing packages, and on the regulatory side, interpreting state brokering laws. “I’ve been focusing on getting my hands around the acquisition process. I’m also in charge of the supply group, the dealer operations team,” Ducharme says. “I’m spending a lot of time working with them, fine-tuning the business plan.” He also is working on securing private financing for carOrder.com. The company already received $100 million from Trilogy. Ducharme is looking to hire another in-house lawyer to head the company’s acquisitions group, an area he’s been handling. Ducharme’s last big venture was selling Ford’s heavy-truck business to Freightliner, a two-year project that involved as many as 500 people working on the deal. Earlier, he was the principal Ford attorney in Europe when Ford bought Jaguar Cars Ltd. He handled other big projects, such as Ford’s joint venture with Volkswagen in Portugal, where a 5,000-employee plant was built on land once used as a strawberry patch. Ducharme started at Ford doing securities offerings. He spent about half of his career in Europe, for a time supervising as many as 25 Ford lawyers stationed in Europe. When he returned to Dearborn, Mich., in 1991, he was put in charge of the lawyers working on distribution and trade regulation. While carOrder.com is building its revenues and its name recognition by selling cars over the Internet as a broker, its ultimate goal is to leverage off that name and become a dealer itself. That’s a different model from some of its online competitors. Stafford says the company isn’t ready to announce any dealership acquisitions, but Ducharme says a number of deals in California are in the pipeline. Some potential acquisitions in Texas were derailed by complications on the real estate side; carOrder.com doesn’t want to own real estate, Ducharme says. The roadblocks to carOrder.com buying dealerships aren’t legal, but institutional, since manufacturer approval is needed. Without naming them, Ducharme says some manufacturers are in favor and others aren’t. As the law stands, carOrder.com will have to buy dealerships in Texas to sell cars in Texas. Consumers in Texas and a few other states can’t buy cars on the online site because of franchise laws. To prepare for an onslaught of dealership purchases, Ducharme says he’s been developing a packet of acquisition documents for the local outside counsel who will handle most of the transactions for carOrder.com. The lawyers will be hired on a fixed-fee basis, he says. His plan calls for in-house attorneys back in Austin to advise on any wrinkles in the deals, but he doesn’t want to build a large in-house department simply to handle the transactions. Although Ducharme will use outside counsel for the purchases, his general philosophy is to do the vast majority of legal work in house. He says when he headed the distribution group at Ford he spent “almost nothing” on outside counsel and had in-house lawyers handling all franchise research, lobbying and some antitrust work. (Litigation was in a different group, he notes.) AT ODDS WITH ONLINE The online sale of cars is an ongoing issue in Texas. Ford tried to advertise used cars for sale over a Web site, www.fordpreowned.com, but the carmaker moved out of the Texas online market after the Texas Department of Motor Vehicles filed an administrative action in November 1999 against Ford and some of its dealerships in Texas for participating. The action alleges Ford, through the online showroom, acted as a dealer and sold or offered to sell motor vehicles directly to the public without a license. In its answer, Ford argues that it shouldn’t be required to obtain a dealer’s license to display pre-owned motor vehicles in the online showroom. Ford, meanwhile, sued the TDMV in federal court in a suit alleging the department violated the automaker’s constitutional rights. Ford seeks injunctive relief to prevent the department from preventing or interfering with the showroom. Ducharme says he authorized the federal suit in one of his parting actions at Ford. The litigation is being watched closely by the Texas Internet Service Providers Association, according to the group’s outside lawyer, Austin solo practitioner Scott McCollough. “Our interest here is not just because it’s cars, nor do we have some great association with Ford or anyone else,” McCollough says. “We don’t want creeping government over the Internet.” At carOrder.com, Ducharme admits to a bit of culture shock at a company where he says there’s no set starting time and there’s seemingly no vacation policy. He says his new office is about the size of his closet at Ford. Although he brought a number of suits when he moved to Austin from Michigan, he’s been wearing khaki pants and leaving his ties at home. He’s still working 12-hour days, but Ducharme says he enjoys the more informal workplace and the easy interaction with carOrder.com executives. “There’s no hint of bureaucracy. It’s very goal-oriented � no time wasted in process,” he says. Although he learned a lot about dealing with ranking executives during his 30 years at Ford, Ducharme says he hasn’t had to work around the system at carOrder.com because there isn’t one. There’s no CEO yet and Stafford is so accessible that Ducharme thinks nothing of calling him from his cell phone while at lunch. Ducharme says he was never one to play political games at work, a practice that he says sometimes got him in trouble. “I always try to be very, very candid, straightforward, speaking my mind. I’ve been doing that here and people tend to like it,” he says. Ducharme is still loyal to Ford, of course, in at least one way: He just bought a new Ford Explorer Sport.

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