Zumwalt's Way

Debra Zumwalt stepped into a morass of legal controversy when she became acting general counsel at Stanford University. As she settled into her new role in February 2000, Stanford was in the midst of a wrestling match with the Santa Clara County Board of Supervisors over the university’s proposed 10-year general use permit for development. At the same time, the school was — and still is — embroiled in an investigation by the U.S. Department of Labor over allegations of systemic gender bias. At stake is nothing less than the $500 million in federal funding Stanford receives each year, which accounts for approximately 28 percent of its budget. In her nearly two-year tenure, Zumwalt has ably resolved some major legal challenges for the university. Along the way, she has preserved the legacy of her predecessor, the respected Michael Roster, but is leaving her own stamp. While she says she loves her job, she says she still has pangs for her courtroom days as a litigator. She remembers sitting in a courtroom about a year ago watching Pillsbury Winthrop intellectual property attorney William Abrams litigate a motion on Stanford’s behalf to keep Stanford Microdevices Inc. — which has no affiliation with the school — from going public under that name. “It was hard just sitting there, and not being able to get up and argue is a little frustrating. There is that little bit of litigator in me,” she said. “It’s hard to sit there quietly, but I do.” Stanford owns 8,000 acres and employs approximately 7,700. The school has its own police, power plant and housing. “In many ways, Stanford’s like a small city,” said Thomas Fenner, Stanford’s deputy general counsel. In November 2000, county supervisor Joseph Simitian proposed that if the university wanted to add 4 million feet of development to its core campus, it should agree not to touch half of the 2,000 acres it owns in the foothills for 99 years and preserve the other half for 25. Feelings were sharply divided in the area. “I don’t remember what some people called it,” Zumwalt said. “What I called it was unconstitutional.” For advice, Zumwalt went to leading constitutional and property law scholars. She called up Stanford Law School Dean Kathleen Sullivan as well as six other Stanford professors. The academics agreed with Zumwalt and said the proposal constituted an illegal taking. Their letter helped pave the way for the eventual approval of Stanford’s general use permit in December 2000 by the Santa Clara County Board of Supervisors. ALL IN A DAY’S WORK While such matters are immense in their scope and ramifications, for Zumwalt, 45, they’re all part of her job as general counsel at Stanford University. When she moved from interim to full-time counsel in February, she took over a legal department that had undergone a massive overhaul in the 1990s. The school was still in the process of working its medical center back into the university’s fold after a failed merger with the UC-San Francisco Medical Center. A 1979 graduate of Stanford Law School, Zumwalt started her career at Stanford when she joined as senior university counsel in 1987. She came to the school with litigation experience gained as senior litigation counsel for Chevron Corp. She also had been an associate at Pillsbury, Madison & Sutro. In 1993, Zumwalt left Stanford to rejoin Pillsbury as a partner. She also became one of the first outside counsel for Stanford in then-General Counsel Michael Roster’s plan to outsource the bulk of Stanford’s legal work. “Debra had already decided she wanted to go back,” Roster said. “But I told her, ‘you’re going to be our guinea pig for partnership.’ “ After Pillsbury consolidated its Silicon Valley offices, Zumwalt became managing partner of the firm’s Palo Alto, Calif., office in 1998. In Zumwalt’s time at Pillsbury, Roster overhauled the school’s legal department, slashing the staff from 26 lawyers and paralegals to just six attorneys. His plan of doling out much of the school’s legal work to a handful of outside firms saved the university money and established a model for legal outsourcing at universities. BACK TO STANFORD In January 2000, Roster announced that he was leaving the school to become general counsel and executive vice president at Golden West Financial Corp., a holding company based in Oakland, Calif. The next month Zumwalt returned to Stanford nearly full time. As Zumwalt managed Stanford’s legal affairs throughout 2000, the school put together a blue-ribbon panel to choose the next full-time general counsel. The panel consisted of Sullivan, Folger Levin & Kahn partner John Levin, Stanford Management Co. CEO Michael McCaffery, 9th U.S. Circuit Court of Appeals Judge Pamela Rymer, earth sciences professor Mark Zoback and Roster himself. After evaluating Zumwalt’s work as acting general counsel, the panel gave Zumwalt a unanimous endorsement. “She’d been legal counsel there for some time, and she’d been outside counsel,” said Michael Smith, assistant chancellor for legal affairs at UC-Berkeley. “She was far better prepared than most people going into that type of position.” Zumwalt hasn’t made any drastic changes to her predecessor’s system. But where Roster slashed the in-house staff, Zumwalt slightly enlarged it. In June, Zumwalt hired Sarah DiBoise as chief hospital counsel and Melissa Burke as senior university counsel. “Given the needs of the hospitals, as you know, this is a difficult time for health care. We wanted a person inside,” Zumwalt said. Burke came to the university from law.com, where she acted as director of legal content. She works part-time in employment law. One month later, Lauren Schoenthaler came from the Santa Clara County district attorney’s office to join Stanford as part-time university counsel. “I thought there could be a tinkering with the office to provide more efficient legal services,” Zumwalt said. “There will be more work that’s done inside but I very much believe in the partnership approach started under Mike.” She’s still trying to fill the position vacated when Michael Hudnall retired from his position as deputy general counsel after nearly 20 years with the university. Other than Hudnall, no one else has left the office since Zumwalt started as acting general counsel. GOOD COMMUNICATOR Outside counsel who work with Zumwalt praise her communication skills. “She has this kind of light touch in a meeting without negating the importance of what’s going on,” said Carol Dillon, managing partner of McCutchen, Doyle, Brown & Enersen’s Palo Alto office and Zumwalt’s point person at the firm. “She’s a person who easily communicates with people between the work and the personal.” Counsel who’ve filed suit against Stanford speak highly of Zumwalt’s negotiating skills. Daniel Siegel remembers the settlement talks with Zumwalt over a suit in which a jury had already found that Stanford’s medical school fired research scientist Colleen Crangle because she had complained about sexual discrimination. The jury awarded Crangle $545,000. Stanford appealed and launched into settlement talks that ended in undisclosed terms. “The word that describes her, I think, is tough,” Siegel said. “My sense is that she has a great deal of authority, that she is very much more than a messenger.” Attorneys at the general counsel’s office as well as the outside attorneys who work with Stanford say Zumwalt is taking a more hands-on approach earlier in cases than her predecessor. “Mike was a quieter type of person; he processed things more internally — whereas Debra will [do so] out loud with others,” said Rodney Johnson, senior university counsel. “Debra is probably going to think about involving people earlier on. I’m not saying one way is necessarily better; they’re just different.” Zumwalt proved she could build consensus even in her earliest days while Stanford was working to get its general use permit approved by the county. The plan mapped out the university’s development projects for the next 10 years. “That was a very, very big matter,” Johnson said. “It touched on the goals of education and research for the university.” The conflict thrust Zumwalt into a new role. She ended up attending roughly 10 county board of supervisors meetings and had to boost her skills in community outreach and coalition building as she went. Like all Stanford’s outside counsel, Zumwalt had been a regular at the in-house counsel’s weekly staff meetings. “So I’d been hearing about it, but still, it’s different hearing about it and being the one responsible for it,” she said. “It was a very lengthy, very public process, and one that was controversial.” BIAS ALLEGATIONS Zumwalt talks about the general use permit easily. But she takes on a more serious tone when asked about the Department of Labor’s ongoing investigation into alleged widespread gender bias at the school. Unlike the general use permit process, the DOL matter isn’t behind her. The DOL launched its investigation into the school in early 1999 after receiving complaints from at least a dozen women. The women said Stanford discriminated against women in hiring and promotions. The school has settled a number of lawsuits by women who gave depositions to DOL investigators. Zumwalt said there is no widespread gender discrimination at the school. “We’ve looked at this issue exhaustively and have determined that women make tenure as frequently as men,” she said. The Department of Labor declined to comment on the status of the ongoing investigation. Even though the potential ramifications of legal battles she faces at Stanford could be overwhelming, Zumwalt loves her job. She gets to be the legal cheerleader for her alma mater. “It’s the whole gamut of things,” she said. “But that’s part of what makes it fun.”