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The deeper Baxter International Inc. gets in the red, the better job its lawyers are doing. Sound a bit topsy-turvy? Not at Baxter, where red doesn’t mean negative profit — Baxter is one of the world’s leading developers and manufacturers of blood-related health-care supplies. Baxter’s lawyers have the satisfaction of watching their work contribute to the well-being of millions of people worldwide — and to the bottom line of a growing, highly profitable company. When it comes to their own well-being and quality of life, though, satisfaction comes with a few caveats, said those who responded to Corporate Counsel‘s Quality of Life Survey. Any dissatisfaction in Baxter’s ranks is not for want of trying on the company’s part, says deputy general counsel David McKee. McKee has spent 19 years at Baxter, and he is an unabashed booster of the Deerfield, Ill.-based company and its culture. “Our goal is to be one of the most admired companies in America,” he says. One route to that goal has been paved with what McKee called “the three Rs” that spell out Baxter’s “shared values” policy: “respect for anyone we come in contact with; responsiveness; and results.” The philosophy runs through the legal department, said several respondents. “The company and the legal department are full of young, enthusiastic, intelligent, and energetic people who treat each other with respect and dignity,” said one attorney who wished not to be identified. “The company walks the walk with respect to its ‘shared values’ policy and operates in a highly ethical manner. Hard work is appreciated, and people remember to say thank you.” As Baxter has branched out, both in terms of geography and its products, the law department has decentralized. The company has moved its lawyers to where its clients are, and as a result only 10 attorneys are in the corporate headquarters; the other 63 work within far-flung business units that dot the U.S., Latin America, and Europe. The product of that growth and decentralization, the survey results indicate, is a legal department that feels blessed by flexibility, interesting work, and high-quality colleagues — but is burdened by stagnation in advancement opportunities, too much work for too little money, and heavy travel. (That also may help explain why just 19 of 73 Baxter lawyers responded to the survey.) Lawyers’ integration with the business side, says McKee, is essential to Baxter’s success. “At the end of the day, what matters most to us is that the people paying the bills know what we’re doing,” explains McKee. “Lawyers here participate in an unlimited way beyond contributing legal advice, and they’re encouraged to do so by the clients. We never get complaints about lawyers sticking their noses into business decisions.” This relationship elicited mostly positive survey responses from Baxter lawyers. Indeed, 63 percent of Baxter respondents felt they were respected as part of the business team — far higher than the 34 percent surveywide average. And not a single Baxter lawyer felt the company sends the most interesting work to outside counsel. But being part of a business team also spurs some frustration. One company lawyer cited “challenging work in emerging areas of law” as a Baxter benefit, then added, “The current system does not actively encourage those who want to be great lawyers. There’s too much emphasis on being a manager or a business person.” McKee admits that “there are people who would be unhappy in our system because they’d feel like they’re wasting time on nonlegal work.” A decentralized department, he adds, can often make for inefficient and repetitive communication. But it works for the company and for most of the lawyers. Baxter is divided into numerous subsidiaries and divisions employing about 40,000 people worldwide. Its revenues last year totaled $6.9 billion. One company division makes equipment to collect and separate blood and blood components and also develops plasma protein therapies for such blood-related diseases as hemophilia. Baxter’s Renal Therapy Services operates about 160 dialysis clinics outside the United States, and the company is building up its foreign operations in general these days. Baxter is also bolstering its biotechnology unit, developing vaccines using recombinant material. Baxter owns a sizable chunk of a company that is working to develop chemical agents that would filter everything out of blood except the red cells, platelets, and plasma. The ramifications — financial and medical — of making available such “clean” blood are staggering. The clean blood could be used to create treatments for AIDS and other blood-borne illnesses. “We are very focused on growth,” says McKee, and that means hiring more lawyers. “One of the real challenges in making acquisitions is staffing up so you’ve got enough high-quality M&A people in the right place.” McKee says that Baxter “wants to be the kind of place where anyone looking for a job would like to come and stay here.” And, for the most part, it is. The majority of Baxter’s lawyers who responded said they plan to stay for at least two years, and nearly 80 percent said they’d recommend working at Baxter to a friend (the surveywide average was 85 percent). But McKee knows that creating an environment where lawyers can balance work and the rest of life is itself a tricky balancing act. Baxter got low marks for advancement opportunities in general, and lower-than-average marks for promoting women and minorities. But McKee says that opportunities are growing with the company, particularly as the business becomes more fragmented. Currently the legal department offers a seven-level career ladder, with management duties increasing on each rung. “I think we deal pretty well with it,” McKee says of promoting from within. Paying lawyers what they feel they’re worth is another challenge, though one hardly unique to Baxter. The burgeoning (though maybe not for much longer) gap between law firm and legal department salaries has been reason for rumblings at Baxter. The average salary at Baxter, $146,235, ranks well above the surveywide average of $125,820. Bonuses, averaging $33,406, were slightly lower than the overall average (but that average is skewed by Lehman Brothers’s $135,000 average bonus). The percentage of Baxter lawyers with stock options is higher (89 percent) than the survey average of 73 percent. Despite these figures, only 32 percent of Baxter lawyers who answered the survey have an above-average satisfaction level with their compensation, compared to 44 percent of all respondents. “They are not recognizing the rapidly growing compensation gap,” said one attorney. “Lawyers are grumbling, and some younger ones are actively looking or leaving.” Another lawyer complained that when companies “increase salary and bonuses and/or stock options, they decrease the value of other benefits (e.g., stock purchase plan), so that the net effect is to reduce the value of the increase.” McKee says about compensation issues, “We’re very focused on that. We’re struggling to understand what’s going on in corporate America.” And that is not an easy task during this period of market and corporate turmoil. He adds that “one young lawyer” has left the company for a law firm since the last firm salary spike. “By and large, people aren’t jumping ship. We are concerned, though.” McKee is confident that the balance of work and life will remain right enough at Baxter to lure and keep top talent. Thanks to the efforts of a quality-of-life group within the company, Baxter offers a liberal work-at-home and flextime policy and has long encouraged telecommuting. In fact, the company scored highest in the survey on telecommuting. The problem is, said some respondents, there’s often too much work to take advantage of the policies. “Even though I can work at home one day a week, it is very difficult to maintain a work-life balance,” said one respondent. The company did score above average when it came to vacation time. “You shouldn’t have to cancel a family vacation for work,” says McKee. “We can find someone to cover.” With some tweaking, and maybe a little luck, Baxter and its lawyers will keep going into the red — while helping their colleagues make some green.

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