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General Counsel Chris Choate has been riding with AmeriCredit Corp. since he rolled into the industry in 1992. One of the fastest-growing corporations in the country, the auto financing company now boasts $15 billion in receivables and employs upward of 5,000. By interfacing with auto dealers, the Fort Worth, Texas-based company services auto buyers who don’t qualify for typical loans. There are 251 loan offices around the United States and Canada. Chief Executive Officer Michael Barrington strives to make AmeriCredit “one of the best places to work in America” by helping employees maintain a good balance between work and life outside of work. Choate and Barrington recently shared with Texas Lawyer associate editor Cristina Smith an inside look into the company and how the GC and CEO work together to achieve AmeriCredit’s goals and aspirations. Texas Lawyer: What did you look for when hiring a general counsel? What characteristics were most important? Michael Barrington, CEO, AmeriCredit Corp: The technical/legal skill set and willingness to work hard is obviously important. In 1993, when Chris Choate was promoted to general counsel, we were a small, essentially startup company looking for somebody that would roll up their sleeves and work closely with our business areas in developing policies, processes, credit programs and documentation that would be compliant with the regulatory environments in which we operate. We also needed someone who could work on basic corporate functions, such as helping with Securities and Exchange Commission filings, human resources issues and litigation management. Chris had a broad legal skill set that allowed him to perform the job. But technical legal skills aren’t enough to be an effective general counsel. A general counsel also needs to have strong leadership attributes, such as displaying confidence and an ability to influence others, including colleagues and those to whom he reports such as the chief executive officer or the chief financial officer. Strong communication skills are a must, insofar as they permit the GC to foster important dialogue around important issues. A GC must be able to deal with conflict in a diplomatic way and maintain a strong network of organizational relationships. Finally, a GC should be adaptable and flexible, responding to new demands and priorities as needed but also willing to make and defend tough decisions when required to do so. TL: What did you do prior to joining AmeriCredit Corp., and how was this experience helpful? Chris Choate, general counsel, AmeriCredit Corp.: Some of my most useful experience came before I became a lawyer. I was a certified public accountant with one of the Big 8 accounting firms — at the time there were eight “big” firms — for a while between college and law school. An accounting background has been very helpful in understanding the complex transaction and accounting issues we deal with at AmeriCredit. After law school, I worked at Jenkens & Gilchrist and later at Jones, Day, Reavis & Pogue, both in Dallas. I was principally a corporate/securities associate; however, I did a fair amount of secured lending work while at Jones Day. My time at Jenkens & Gilchrist was important in gaining experience on general corporate and SEC matters, while also developing professional contacts that have served me and AmeriCredit very well over the years. I worked on some small securitization transactions while I was at Jones Day, something that has been critical inasmuch as AmeriCredit is one of the largest auto finance securitizers in the United States — we’ve done more than $25 billion in securitization transactions since 1994. In the end, however, I think working in large law firms — at least for a while — was important because I realized how intelligent most of the attorneys are that work in that environment. It’s important as a GC to know how to tap into law firms and locate the truly intelligent people and use them as a resource to help yourself and your company. Working at a law firm also taught me a great lesson: There is always somebody smarter than you. So, for me, the trick was to develop other skills and tools and to not base my entire career on trying to be the smartest guy around. TL: What role does the GC play in key business decisions? Barrington: The GC at AmeriCredit is a member of our executive team. The executive team, which includes the CEO and the CFO, is responsible for shaping strategy, integrating efforts across business segments and functions, and monitoring the results of our operations and efforts. The GC’s role on the team is not just providing legal insight and judgment. In fact, the GC is expected to fully participate in strategic decision-making by the executive team in his capacity as an executive member of that team, not just in his capacity as a lawyer. TL: How large a legal staff does the company have? Barrington: Nine attorneys, including Chris, with seven paralegals and some additional support staff. TL: What is your weekly interaction with the legal department, on average? Barrington: I usually interact with the GC at least once a week due to executive team meetings. Otherwise, I may interact directly with Chris or other members of the legal department once or twice a week, depending upon the business activities going on that week, more interaction if a large transaction requires my involvement, etc. A great deal of the legal department’s weekly interaction is with the other members of the executive team, such as the chief operating officer, the presidents of our two operating segments or other functional leaders. My interaction with the legal department increases when significant financing transactions are pending or when we’re evaluating other strategic matters, such as key contractual issues or the settlement of material litigation. TL: How do you attract and motivate your legal staff? Barrington: Our corporate culture is unique, and our legal staff is, I believe, attracted and motivated by our culture in the same manner as all of our team members. AmeriCredit has been a real success story since its creation in 1992, and I think all of us are motivated to continue that success. I believe we offer our legal staff very competitive compensation packages. However, we’re also focused on things like helping our employees find the best work-life balance possible, providing our team members with opportunities to participate in community investment activities, having excellent communication to and from our team members, and always striving to make AmeriCredit one of the best places to work in America. In addition, AmeriCredit has been one of the fastest-growing corporations in America over the past several years, so there’s been a pretty constant amount of exciting and challenging things for our legal staff to work on. TL: What kinds of issues have you had to handle? Choate: I was the only attorney for several years, so I’ve personally managed the litigation, worked on the corporate financing transactions, helped develop credit products and compliance programs with the business people, handled the process of obtaining lending licenses in multiple states, negotiated hundreds of leases and contracts for technology acquisitions, conducted the annual meetings of shareholders, and been the treasurer of AmeriCredit’s political action committee. As corporate secretary, I’ve been in charge of the stock-based compensation programs — such as stock option administration — SEC filings on insider stock transactions, and corporate record-keeping for the board of directors and its committees. In my early tenure, I routinely went to mediations and even argued some small-claims court cases. In more recent years, I have graduated to helping negotiate, structure and close $2 billion-plus financing transactions and multimillion-dollar real estate financings. Quite a change. Fortunately for AmeriCredit and for me, we now have several talented attorneys that oversee the day-to-day corporate, litigation, regulatory compliance and other legal issues the legal department handles. I’ve been able to apply one of my lessons from working in a law firm environment — there’s always somebody smarter than you, and I’ve been fortunate enough to be able to hire several of them. That has allowed me to become more active on the executive team and work on evolving issues, such as the corporate governance requirements of Sarbanes-Oxley, the SEC and the New York Stock Exchange, and commit time to special financing and other projects. TL: How many attorneys do you supervise, and what is the level of your interaction? Choate: Not including me, we have eight attorneys in the department. Two of these attorneys report directly to me, although I interact extensively with another attorney who is responsible for our litigation management. All the attorneys are located in a centralized location — really, we’re all located within a few feet of each other — so daily or even hourly interaction is typical for me and the other attorneys. We have weekly attorney staff meetings and monthly department staff meetings; however, the informal, daily interactions are, for me, the best way of keeping up with what’s going on. TL: What has been the company’s greatest legal challenge in the past two years? Barrington: The past 18 months have been challenging in many regards due to the weak economic environment. From a legal perspective, the heightened focus on corporate governance with Sarbanes-Oxley and the new SEC and NYSE rules are driving changes at AmeriCredit. While I consider these changes to be positive and AmeriCredit fully endorses them, the evolving corporate governance environment is challenging for me as CEO and as a member of AmeriCredit’s board of directors. Our GC and our internal audit team — internal audit also reports to the GC — will be largely responsible for analyzing these new rules and recommending the changes we need to make as a corporation. In addition, despite the tough economic environment, AmeriCredit completed two significant financing transactions in the past six months, both of which were demanding on the legal front. In June, we closed a $175 million senior note offering, and in October, we closed a $500 million equity offering. Both of these deals required our GC and his staff to coordinate the efforts of numerous inside participants and our outside law firms, our accounting firm, the financial printers, and do all of this on a very tight and fluid timeframe. TL: What in particular made becoming an in-house attorney an attractive choice for you? Choate: For one, corporate/securities/ lending work wasn’t particularly plentiful in Dallas in the late 1980s — so lots of baby corporate attorneys were keeping their eyes and ears open for something else to do. I had been fortunate enough to work on the initial public offering of Urcarco Inc., the predecessor corporation of AmeriCredit, in 1988 while I was at Jenkens & Gilchrist and had become acquainted with the chairman, Clifton H. Morris Jr., and several of the other people running the company, including Mike Barrington. When Urcarco went looking for a second attorney in 1991, I was interested in doing something different, and moving to Fort Worth sounded like fun. Moving from prestigious law firms to a used car retail company seems, in retrospect, like one of the dumbest career moves any lawyer could ever make, but it clearly turned out to be a “right place, right time” career change for me. One of the main things I have sought to accomplish in my career is to get “closer to the action.” As a CPA, I was pretty removed from the actual strategic, or even tactical, decision-making engaged in by business leaders. As a corporate attorney working for big law firms, I was somewhat closer to the decisions being made by clients but not as close as I would’ve preferred, and the opportunity to be involved in management of a large law firm appeared to be years away, if even possible. Working in-house was attractive to me because I would have a chance, at an earlier point than in a law firm, to be a part of and influence, or at least be aware of, strategic decisions that affected my career, my life and my company. I believe this to be particularly true working for a smaller corporation. TL: What is the best thing about your job? Choate: The opportunity to actively participate in shaping the strategy of the company — the chance not only to be close to the action but also to be a part of the action. It’s exciting to me, and I take it as a great responsibility that I am helping run the business, to participate fully in making decisions that affect the future course of the company. I’ve been with AmeriCredit since day one, and I have a great deal of pride in what’s been created here. And I love the fact that I’m in a position to help continue shaping the future of this company. TL: What are your short-term and long-term goals with regard to your legal department? Choate: Short-term, as in the next nine to 12 months, the goal of the legal department will be to maintain our level of service to the company despite the need to focus more on expense management as a legal department due to the weaker economic environment. This may involve having attorneys and staff members step up to some additional responsibilities, such as handling some legal areas and issues that, previously, we may have sent to outside counsel or even sought additional staffing to handle. Long-term, our goal is to develop and implement better technology within the legal department to enhance efficiency and foster better information or knowledge-sharing within the department. Better tracking of matters and issues handled by the department and the sharing of training and other information across the staff should lead to process and staffing efficiencies, which, in the end, should improve client service and the client’s perception of the legal department.

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