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Continental Airlines Inc. in Houston is on a roll: It is the only major hub-and-spoke airline to squeeze out a profit in the first quarter of this year. The comeback kid of the industry, Continental was in dire straits in 1995, when Jeffery Smisek landed the top legal spot at the company. Now the carrier’s service reputation and corporate culture are celebrated, and its lawyers report a great deal of satisfaction with their jobs. In fact, Continental is flying so high that Smisek can say, “We’re very proud of what we’ve done,” and point to the airline’s making Fortune magazine’s “100 Best Companies to Work For” list three years in a row. The company also moved up 15 slots on the Fortune 500 list this year to number 191. “As Continental has become a dramatic success story, a lot of people want to work here,” Smisek says. “We get lots of resumes.” Plus, the airline’s lawyers get to deal with “all kinds of unbelievably interesting issues, and we have giant toys to play with — airplanes,” he says. “Continental was attractive to me because of the culture,” says Jennifer Vogel, vice president, legal, who has been Smisek’s legal copilot since the mid-’90s, when the two bumped into each other on — what else — an airplane (they had worked together at Houston’s Vinson & Elkins). The company’s open communication policy, in which employees are encouraged to ask questions and supervisors are asked to keep their doors open, leaves little room for politics, she explains. It isn’t just Smisek and Vogel who are happy. With 12 of the 17 lawyers in the department responding (Smisek and Vogel thought it better that they not participate), three-quarters of the rank and file described collegiality within the legal department as outstanding. More than 90 percent also rated the relationship between law managers and staff as outstanding. And 100 percent said they would recommend the company to a friend. The pay seems reasonable. Continental lawyers (excluding Smisek and Vogel) reported an average salary of $134,700 for full-timers, compared to the surveywide overall average of $125,820. (According to securities filings, Smisek earned more than $1.2 million last year.) More importantly, perhaps, nearly 60 percent of the airline’s lawyers rated the interest level of their work as outstanding, compared to 34 percent in the overall survey. Lori Auray Gobillot, a senior transactional attorney, said that “the work is both challenging and interesting.” Another measure of employee satisfaction: Most plan to stay where they are. No one reported looking for another job. And most expect to be there five years from now — although a few expect to be retired by then, and a few others are eyeing the business side. In fact, three of the company’s current senior vice presidents (international, corporate development, and finance) used to be in legal. Just about all respondents agreed that the company’s attitude toward moving to the business side is encouraging. “I would prefer they go to the business side than lose them,” Smisek says. And the lawyers can’t complain about the hours, which are generally good. None of those polled ordinarily worked more than 55 hours a week. The bulk (58 percent) reported a 46-to-55-hour workweek. A third said they worked even less: 36-45 hours. (In the national sample, half of the total respondents worked 46-55 hours, and more than a quarter reported working longer hours.) To further sweeten the deal, there’s the option for part-time work too. Sarah Hagy, who has practiced law for more than a decade, half of that time at Continental, wrote: “I am fortunate enough to have a part-time position that enables me to stay involved in the practice of law and still have a lot of time with my family.” Smisek says, “We find stellar candidates in women who have been schooled in big firms and now want to enjoy their families.” Adds Vogel: “There are many highly qualified women in the legal profession who don’t want to work 70 hours a week.” Nearly 60 percent of Continental’s respondents were female. And of course the second-in-command, Vogel, is a woman. Continental’s lawyers seem to have good outside support. The law department uses some 150 law firms, and spends approximately $15 million annually for outside counsel. “It’s unlikely anyone will get a call on Friday at four [o'clock] that will ruin [our staff lawyers'] weekend. It might ruin outside counsel’s weekend, but not ours,” says Smisek. Continental’s lawyers seem well integrated into the corporate structure. They are associated with a business group or specialty, such as regulatory, real estate, finance, labor and employment, marketing and sales, international, e-commerce, personal injury, or other civil litigation. Nine out of 12 respondents said their advice is sought and respected; two felt they were part of the business team, and another claimed to be a leading voice in setting business strategy. Adds Smisek: “They are always present at the birth of an idea.” Access to free flights all over the world is another drawing card. And fly they do. Jeffrey Clarkson, a senior attorney in Continental’s international and real estate practice, said it’s not unusual for him to leave a little early on a Friday to jet off to New York, Florida, or California for the weekend. “It’s one of the benefits of working for Continental,” he said. The lawyers feel they can take their vacations: Ten out of 12 respondents rated the company’s willingness to let lawyers take vacation time as outstanding. So what possible turbulence is ahead? If the federal government allows the airline industry to consolidate further, Continental, the nation’s fifth-largest carrier, is in danger of being bought. “We don’t want to have to merge,” says Smisek. His sentiments are echoed by his staff. Clarkson, who’s been with the carrier for two years, said, “Continental management and employees have done an extraordinary job of restoring this company’s reputation as a premier airline. … It would be a shame to see it gobbled up.” The folks at Continental have been anxiously watching the proposed merger between market leader UAL Corporation’s United Airlines of Elk Grove Township, Ill., and US Airways Group, Inc., of Arlington, Va. If the Department of Justice approves that deal, says Glenn Engel, airline analyst for New York’s The Goldman Sachs Group Inc., “the pressure would be on American, Delta, Northwest, and Continental to match up in size.” Third-ranked Delta Air Lines Inc. of Atlanta, which tried to buy Continental three years ago, would probably be Continental’s unwanted suitor. At press time the Justice Department had indefinitely extended the deadline for its decision. The good news for Continental is that it would not be an easy takeover target. Anyone looking to buy the company has first to get past Northwest Airlines Corporation. The Eagan, Minn.-based airline can nix any merger offer, as it sold back to Continental a controlling stake, but, in the deal, got preferred stock with veto rights over certain changes in control. The two carriers have created an alliance that runs to 2025 and that they hope to extend overseas to include KLM Royal Dutch Airlines. There’s always upheaval in the airline industry, Smisek notes. After all, he says, the business is “cyclical, capital-intensive, labor-intensive, heavily regulated, and constantly in the public eye.” The company has also been involved in financings of more than $11 billion in the six years since he’s been there. And the high-profile industry is “on every politician’s radar screen,” Smisek notes. But those uncertainties, says Smisek, are just what makes the industry “a lawyer’s dream.”

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