Those aren’t junk yards, they’re salvage yards, and LKQ Corp. has turned them into a big business. The company is the country’s largest source for aftermarket car parts (that is, nonbranded replacements) through its Keystone brand, and for components extracted from vehicles that have reached the end of their road through age or collisions.
LKQ refurbishes salvage parts for sale to auto repair shops, but also operates a network of automotive bone yards where shade-tree mechanics can scout out parts on their own. Additionally, the company sells remanufactured engines and transmissions, heavy trucks and truck parts, car paint and body-shop equipment.
The company has more than 440 facilities in the United States, Canada, the United Kingdom, Mexico and Central America. Revenues during 2011 amounted to $3.3 billion, positioning LKQ at No. 753 on the Fortune 1,000. The company has approximately 18,000 employees and maintains headquarters in Chicago.
LEGAL TEAM AND OUTSIDE COUNSEL
LKQ’s legal department has six members, in addition to General Counsel Victor Casini, including four lawyers. For the most part, Casini uses two outside firms — K&L Gates (for corporate securities and intellectual property) and Atlanta-based Fisher & Phillips (for employment and labor). He hires local counsel to help with compliance with the Foreign Corrupt Practices Act and the 2010 United Kingdom Bribery Act.
Casini estimated that there is a 50-50 split between in-house and outsourced legal work. He favors conventional hourly billing for his external counsel, with whom he maintains long-standing relationships. Casini places a “huge premium” on trusting his outside counsel — in part, he said, because “I don’t have the time to fly-speck the bills.”
“I’m a generalist now, and from a legal standpoint, ours is a clean business with run-of-the-mill responsibilities,” Casini said. Addressing the immediate needs of his internal clients is foremost among his day-to-day tasks. He has governance duties for the board of directors and fulfills various compliance responsibilities. LKQ is an acquisitive company, and Casini and his colleagues draft and negotiate the paperwork behind the deals. They work on financing, transactional and credit agreements, and stock offerings.
The team also grapples with a host of issues related to employment, government affairs, compensation, litigation and intellectual property. As part of his general duties, Casini reviews all advertising copy. There is some union and immigration-related work, but it represents a very small part of the workload.
Casini occasionally is called upon to travel for the company, but he accomplishes a lot from his office through e-mails and conference calls, he said.
Casini reports to Robert Wagman, LKQ’s chief executive officer and president, and member of the board of directors.
One transaction Casini played a role in was LKQ’s acquisition of Keystone Automotive Industries Inc. in 2007 for approximately $800 million. It was a “big move for the company,” Casini said — at the time, LKQ itself was worth $900 million. The legal department had to help integrate a company almost equal in size to LKQ, but with a different corporate culture. More recently, in October 2011 Casini helped orchestrate the $435 million purchase of Euro Car Parts Ltd., a major aftermarket auto parts distributor in the United Kingdom. During the first quarter of 2012, LKQ also acquired four North American businesses. These included a self-service operation, a paint distributor, a light-vehicle wholesale salvage operation and a distributor of remanufactured engines.
LOBBYING AND THE ENVIRONMENT
LKQ’s team of lobbyists reports to Casini. The group monitors policymaking pertaining to the industry, particularly on the state level. One area of concern is the movement to keep track of, and prohibit, certain toxins from entering landfills. LKQ must properly dispose of considerable amounts of electronic waste, Casini said, and so has an interest in the development of the pertinent rules.
LKQ takes environmental protection seriously, according to Casini. Not least among its contributions is that the automobiles it purchases and recycles do not end up in landfills. It harvests parts from salvage vehicles and provides them as a low-cost, environmentally friendly repair option. LKQ recycles an average of 82 percent of each salvage vehicle by weight, he said, and is committed to meeting or exceeding all environmental regulatory requirements. Every year it processes more than 4 million used tires.
As a public company, LKQ answers to the U.S. Securities and Exchange Commission. Complying with the Sarbanes-Oxley Act is a demanding process, Casini said, and he works with independent and internal auditors to that end. The same holds true for adhering to the Dodd-Frank Act.
The legal team recently collaborated with LKQ’s business side to draft and implement a new warranty program. LKQ will indemnify licensed auto repair shops against injury or damage caused by any defective replacement part distributed by the company.
LKQ lacks a formal pro bono program, but Casini said he supports staff attorneys who participate in such activities.
ROUTE TO THE TOP
Casini graduated in 1984 from the University of Illinois at Urbana-Champaign and earned his J.D. three years later from Northwestern University School of Law.
He practiced for five years at Chicago’s Bell, Boyd & Lloyd (now part of K&L Gates). While there, he worked on the acquisition of children’s playground company Discovery Zone Inc. for venture capitalist Donald Flynn.
In 1992, he was approached to become in-house counsel of family-owned Flynn Enterprises Inc. Bell Boyd’s managing partner, a long-time Flynn friend, advised Casini to accept the offer. He has never looked back, and considers Flynn to be his career mentor.
Flynn launched LKQ in 1998, and Casini now devotes 100 percent of his time to the company.
Casini recounted a valuable nugget of professional advice he received during his first week in private practice at Bell Boyd: “The client is first and most important. It is critical to respond promptly to your client, even if only to say that you are so busy you can’t answer immediately, but will get back to him as soon as possible.”
Chicago native Casini plays golf when time allows. He enjoys taking college classes online (“for enjoyment this time”) and is active in Roman Catholic apologetics — researching, understanding and defending the faith, he said.
Casini and his wife, Janet, a former graphic designer, have three children: Grant, 17; Elle, 15; and Shayne, 11.
LAST BOOK AND MOVIE
Steve Jobs, by Walter Isaacson, and The Artist.