The Inside Counsel Revolution - Resolving the Partner-Guardian Tension

In the past 25 years, there has been a revolution in the legal profession. General Counsel and other inside lawyers have risen in quality, responsibility, power and status. Once second class citizens in corporations and the legal profession, they have become core members of top corporate management, equaling in importance the Chief Financial Officer and the finance function. Benjamin W. Heineman, Jr. has led that revolution in his nearly 20 years as the top lawyer at GE. In this analytic and prescriptive book, he describes the essence of that transformation and the modern role of inside counsel: the key functions, relationships, issues, problems and dilemmas, and argues for the role of inside counsel as lawyer-statesman, motivated not just by the desire for income but by broader values of integrity and corporate citizenship.

List of contents

Part One: The
General Counsel as Partner and Guardian 1

 

Chapter 1 Introduction: The
Inside Counsel Revolution 3

a. Transformation 3

b. Credit Where Credit Is Due 8

c. Causes: A Schematic View 10

d. The Prescriptive Perspective
15

e. Core Concepts and Key Issues
21

 

Chapter 2 The Lawyer-Statesman
Ideal 23

a. Overview: Is It Legal? Is It
Right? 23

b. Historical Traditions 26

c. Outstanding Expert, Wise
Counselor, and Accountable Leader 31

d. “Complementary” Competencies:
Beyond the “Core” 41

e. Analysis before Recommendation
46

f. Analysis before Advocacy 51

G. An Important Conscience of the
Corporation 53

 

Chapter 3 Partner-Guardian
Realities 55

a. The Tension 55

b. The Fusion 58

c. The Obstacles 63

d. The General Counsel’s
Character, Reputation, and Identity 68

e. Protecting Other Inside
Counsel 71

f. Alliance with Other Staff
Functions 74

g. The Board of Directors 75

h. The CEO 81

i. Dealing Directly with CEO Risk
83

 

Chapter 4 The Cultural Imperative
91

a. Primacy 91

b. The Pressures That Corrupt 95

c. Imposing Discipline 108

d. Letting Employees Speak—and
Then Listening 115

e. An Integrity “Learning
Culture” 121

f. Financial Rewards 125

g. Assessing Culture 127

 

Part Two: Key
Issues 129

 

Chapter 5 Compliance and Legal
Hazard: The Essence 131

a. Complexity 132

b. Regulatory Trends 135

c. Determining What Is the Law
140

d. The CEO as Chief Compliance
Officer 142

e. Prevent, Detect, and Respond
144

f. Deals 159

g. Value of a Good Compliance
System: Morgan Stanley 161

h. Value of a Good Response to
Compliance Disaster: Siemens 163

i. GC, CFO, and Chief Compliance
Officer: Function Not Form 168

j. People and Resources:
Platinum, Gold, Silver, Bronze—or Nickel 176

Chapter 6 Ethics: The Complexity 183

a. Identifying Ethical Issues 185

b. Setting Ethical Standards 188

c. Challenges in Global Supply
Chains 197

d. Conflict between Global
Standards and National Law 213

e. Ethical Problems When There Is
No National Enforcement 219

f. Exiting Rogue States 222

g. Cost: Small and Medium-Sized
Companies 226

h. Values 226

 

Chapter 7 Risk and Crisis
Management 229

a. Scope 230

b. Organizational Principles 232

c. Framework Questions 236

d. Catastrophic Events and Crisis
Management 244

e. Fukushima: Debating Disaster
249

f. BP and the Gulf: “Exhibit A”
for Catastrophic Costs of Failure 253

g. A Comment on Geopolitical,
Terrorism, and Cyber Risk 264

h. The Need for Specialized
Knowledge 270

 

Chapter 8 Governance: The Board
Relationship 275

a. The Three Dimensions of
Governance 276

b. The Framework of Formal Rules
278

c. The Six Essential Tasks of
Board–Management Leadership 280

d. Special Problem: Executive
Compensation 300

e. Board Independence and
Leadership 307

f. Shareholders: Stewards and
Activists 310

 

Chapter 9 Citizenship and the
Primacy of Public Policy 317

a. Philanthropy 319

b. Business Activities 322

c. Collective Action:
Anticorruption 326

d. Public Policy 335

e. Reporting 354

f. Reputation 357

 

Part Three:
The Global Legal Organization in the Future 359

 

Chapter 10 Leading the Law
Department 361

a. Mission 361

b. Hire the Best 363

c. Delegation 371

d. Accountability: Centralized or
Decentralized Model 374

e. Global Integration 380

f. Duties to Inside Lawyers 382

g. Innovation, Management, and
Cost 390

h. Explaining the Legal
Organization to Business Leaders 398

 

Chapter 11 Law Fi rms—and
Alternatives 401

a. Problems: A Brief Bill of
Particulars 402

b. Solutions: A Brief History 406

c. The Primacy of Segmentation
411

d. Rethinking Resource Allocation
412

e. Resetting the Relationship 417

f. Cooperation on Ethics 428

g. A Personal Note 438

 

Chapter 12 The Future: Problems
and Possibilities 441

a. Extending the GC’s Reach 442

b. Attitudes: Boards of
Directors, CEOs, and Business Leaders 444

c. Making the Case That Cost
Creates Value 447

d. Going Global? 450

e. Partner and Guardian 454

 

NOTES 457

 

Acknowledgments 491

 

About the Author 493

 

INDEX 495

Part one

About the author

Ben W. Heineman,
Jr., was GE’s Senior Vice President–General Counsel from 1987–2003 and then
Senior Vice President for Law and Public Affairs from 2004 until his retirement
at the end of 2005. He is currently Senior Fellow at Harvard Law School’s
Program on the Legal Profession and its Program on Corporate Governance, Senior
Fellow at the Belfer Center for Science and International Affairs at Harvard’s Kennedy
School of Government, and Lecturer in Law at Yale Law School. A Rhodes Scholar,
editor-in-chief of the Yale Law Journal, and law clerk to Supreme Court Justice Potter Stewart, Mr.
Heineman was assistant secretary for planning and evaluation at the U.S.
Department of Health, Education, and Welfare and practiced public interest law and
constitutional law prior to his service at GE. His book, High Performance with High Integrity, was published in June 2008 by the Harvard Business Press. He writes and
lectures frequently on business, law, public policy, and international affairs.
He is also the author of books on British race relations and the American
presidency.

 

He is a member of
the American Philosophical Society; a fellow of the American Academy of Arts
and Sciences; a member of the Presidents’ Circle of the National Academies of
Sciences, Engineering, and Medicine; and a former member of the National
Academy of Science’s Committee on Science, Technology, and Law. He is recipient
of The American Lawyer magazine’s Lifetime Achievement Award, the Lifetime Achievement Award
of Corporate Counsel magazine, and the Lifetime Achievement Award of Board Member magazine. He was named
one of the Top 50 Innovators in Law in the Past 50 Years by The American Lawyer, one of America’s 100 most influential lawyers by the National Law Journal, one of the 100 most influential individuals on business ethics by Ethisphere magazine, and one
of the 100 most influential people in corporate governance by the National
Association of Corporate Directors. He serves on the boards of Memorial Sloan Kettering
Cancer Center, the Center for Strategic and International Studies, Central European
University, and Transparency International– USA. He is a graduate of Harvard
College (BA–History), Oxford University (B.Litt—Political Sociology), and Yale
Law School (JD).

Summary

The
Inside Revolution: Resolving the Partner-Guardian Tension, provides a
thoughtful and thought provoking analysis of the role General Counsels, and
lawyers more generally, can and should play in business and society.

In the past 25 years, there has been a revolution in
the legal profession. General Counsel and other inside lawyers have risen in
quality, responsibility, power and status. Once second-class citizens in
corporations and the legal profession, they have become core members of top
corporate management, equaling in importance the Chief Financial Officer and
the finance function. They have dramatically shifted power from law firms to
corporate law departments, assuming strategic direction over legal matters and
exercising far greater control over law firm billing and economics.

Ben W. Heineman, Jr. has led that revolution in his
nearly 20 years as the top lawyer at GE and then in teaching and writing as a
Distinguished Senior Fellow at Harvard Law School’s Program on the Legal
Profession and lecturer at Yale Law School. In this analytic and prescriptive
book, he describes the essence of that transformation and the modern role of
inside counsel: the key functions, relationships, issues, problems and
dilemmas. Moreover, he argues for the role of inside counsel as
lawyer-statesman, motivated not just by the desire for income but by broader
values of integrity and corporate citizenship.

In this analytic and prescriptive book, he describes
the essence of that transformation and the modern role of inside counsel in
helping attain the corporate mission of high performance with high integrity:
the key functions, relationships, issues, problems and dilemmas. He argues for
the role of inside counsel as lawyer-statesman and as a partner of the CEO but
also guardian of the corporation, motivated not just by the desire for income
but by broader values of integrity and corporate citizenship.

The Inside Counsel Revolution is a
succinct, concrete yet visionary statement of first principles from a highly
regarded founder of the in-house revolution that fundamentally changed the
legal profession and reframed the lawyer-statesman role in this era to serve
the performance, integrity and risk goals of global capitalism.

Published by the American Bar Association in April 2016. 

Product details

• Authors: Ben W. Heineman Jr, Benjamin W. Heineman Jr, Ben W. Heineman Jr.
• Publisher: Ingram Publishers Services
• Languages: English
• Product format: Hardback
• Release: 15.08.2023, delayed
• EAN: 9781634252799
• ISBN: 978-1-63425-279-9
• No. of pages: 527
• Subjects: Social sciences, law, business > Law > International law, foreign law; SELF-HELP / Personal Growth / Success, BUSINESS & ECONOMICS / Leadership, LAW / Administrative Law & Regulatory Practice