Pepper Construction Co. is a Chicago-based commercial construction company that works across a range of markets including retail, health care, education and casinos. It is the largest subsidiary of privately held Pepper Construction Group LLC, which generates about $1.1 billion in annual revenue.
The work force ranges from 800 to 1,200, depending on what projects the company is working on. According to general counsel Timo­thy Sullivan, the labor force declined by 10 percent during the recession.
LEGAL TEAM AND OUTSIDE COUNSEL
Sullivan is one of two lawyers on staff. The legal department also employs two paralegals and one administrative assistant. The department typically handles all transactional work — including contracts, licensing and labor relations — in-house. Most litigation, unless in small claims court or an administrative action, typically goes to outside counsel.
Sullivan’s criteria for hiring outside counsel are "pretty flexible," he said, and he uses a variety of firms. "Cost will come into the selection process, although I recognize that seasoned practitioners may provide the expertise to resolve a matter quickly and efficiently."
Among the firms Sullivan uses are Chicago-based Freeborn & Peters and Pepper Hamilton of Philadelphia for construction litigation; Chicago-based Schiff Hardin for bankruptcy litigation; Cassiday Schade in Chicago for general liability and negligence defense; and Morgan, Lewis & Bockius for employment litigation.
Sullivan said he’s open to alternative billing in concept, but, "because I usually only send litigation out, I’m not sure how alternative billing would work." He negotiates blended rates for partners and associates occasionally, but in general finds the sort of litigation he faces "doesn’t lend itself to a formula."
Pepper has not signed the Pro Bono Institute’s Law Firm Pro Bono Challenge or the Diversity Call to Action, and does not weigh outside firms’ pro bono or diversity programs when hiring.
Sullivan typically arrives at work before 8 a.m. and is out by 6 p.m., occasionally taking a contract or other work home with him. He estimates spending between about 25 percent to 40 percent of his time reviewing or negotiating construction agreements between Pepper and its clients — although particularly large or complex projects can take days to put together.
He employs a contracts specialist to help with "downstream agreements" with subcontractors and suppliers. Sulli­van also deals with labor and employment issues, as well as with general corporate operations. The rest of his day he might dedicate to risk management, dispute management, compliance or intellectual property protection. In addition to the contracts specialist, Sullivan has on staff a claims specialist who manages insured losses and workers’ compensation claims.
Chief among the challenges faced by Pepper is the lingering slump in construction. "The economic slowdown hasn’t been friendly to most industries, and the Midwest construction market is no exception," he said. "One unfortunate trend is that we’re starting to experience unexpected subcontractor insolvencies. When a sub has to shut its doors prior to project completion, the general contractor not only has to figure out how to get the project finished, but it also has to deal with lower-tier payment claims, unpaid union benefits and secured-­creditor claims."
In addition to holding his law license, Sullivan is a licensed professional civil engineer. That training allows him to manage Pepper’s construction job site storm water pollution compliance program. He negotiates some collective-bargaining agreements on behalf of a large Chicago-area contractors’ association, and serves as a management trustee for a multiemployer union pension fund.
He reports to Thomas O’Leary, executive vice president of Pepper Construction Group.
"Most in-house counsel will likely tell you that they enjoy the chance to be a part of the business operations of their employer," he said. "I’m no exception."
The company is active in the community and a "huge supporter" of Junior Achievement, Sullivan said. He participates in fundraisers and has taught business classes to disadvantaged students in Chicago. He occasionally delivers lectures on construction law at Purdue Univer­sity’s department of building construction management. He finds it "really hard not to object to an examiner’s questions when I get deposed," he said.
ROUTE TO THE TOP
Sullivan graduated from the U.S. Military Academy at West Point, N.Y., in 1985 with a major in civil engineering. He earned his J.D. at Northwestern Uni­versity School of Law in 1996. Before attending law school, he worked for five years in the U.S. Army Corps of Engineers and then as a construction services project manager for Greenhorne & O’Mara Inc. in Laurel, Md.
It was there that he decided to pursue the law. "When I was a construction manager, I became involved in disputes and their resolution, and it was a case of, if you can’t beat ‘em, join ‘em," he said.
Following law school, he became a construction attorney at Schiff Hardin, and in 1999 joined Sears, Roebuck and Co. as senior counsel for construction and facilities compliance. He joined Pepper in 2004.
Among his career highlights was managing Sears’ $125 million Americans With Disabilities Act retail store retrofit project. "It involved managing the work of many Sears employees who were not part of the law department," he said. "It was very unusual for a lawyer to have that role — something to do with my engineering and management background, I suppose." His nadir, he said, was when his U.S. Army engineering unit dropped a new bulldozer out of a plane without a functional parachute.
His advice for someone stepping into the general counsel role? "Be humble and be willing to learn," he said. "Chances are that you’ve been hired as a GC because you’ve been reasonably successful at what you’ve done up until that point. As a new GC, you’ll quickly realize that the job requires knowledge of a broad base of legal issues, most of which you do not possess. Although your colleagues and clients will often expect you to have all the answers, you won’t, and you’ll need to make the effort to learn."
A native of Lincoln, Neb., Sullivan enjoys skeet shooting and golf. His wife, Cynthia, is a college admission counselor. They have two children: Patrick, 21, and Corrinne, 17.
Among his community activities is volunteering as an admissions officer at West Point and being co-chairman of his daughter’s high school volleyball team boosters.
LAST BOOK AND MOVIE
1776, by David McCullough, and Flight.