Brobeck, Phleger & Harrison, LLP
Chair, Business & Technology Group

The Role of a Corporate Lawyer

There are many different types of corporate lawyers. When I think of a corporate lawyer, I think of an individual who advises boards of directors and assists management in choosing a strategic direction, focusing on the legal ramifications of their decisions, coupled with his or her understanding of their business. I envision a gray-haired attorney sitting at the boardroom table discussing matters of consequence with the board of directors.

There are two basic types of clients that we generally advise and we take a very different approach to these two clients. At one end of the spectrum, we represent Fortune 100 companies, some of the largest corporations in America. One of the keys to this representation is chemistry likely with the members of the companys legal department, because major corporations will have general counsel, probably multiple lawyers, so you want to establish a rapport with the lawyers within the organization. Understanding the companys goals and approach to business becomes key to giving advice in any setting, particularly Fortune 100 companies.

We also work with many very young companies, what are generally described as start-ups venture-backed companies at the earliest stages. This is a very different situation because you are dealing with a management team that is relying heavily on your expertise. What you really are bringing to the table is a world of knowledge: how to build a company, how to make a successful start-up; and how to get a company funded. What you hope to accomplish is sharing your knowledge and experience with your client so that their odds of success increase.

At one end, I have clients who measure their revenue in the tens of billions of dollars. At the other end, I have clients consisting of a couple of engineers talking about what to do when they start hiring: who and how should they hire. I like to say that the oaks I represent provide me the opportunity to work with the acorns.
From a broad prospective, the primary goal must be excellence. Whether you are a mature company or a young company, everybody recognizes that you have to be the best at what you do to be successful. Excellence is the common goal. How a company measures excellence, of course, varies greatly. Public companies are measured in the marketplace. They know whether people think they are doing a good job or not, because the trading of their stock generally reflects the market perception of the company. With young companies, it is different, very different. There is a sense that you have to make progress every day, every week, every month. A young company may have a board of directors with prominent members willing to give their time to the company. Their primary concern is the company dynamic, how the board can look two or three years down the road, and creating a company that will be meaningful in the marketplace.

Succeeding as a Corporate Lawyer

If you talk about the difference between a good lawyer and a great lawyer, I believe good lawyers are thought of as technical lawyers: They can do the job, they do it right, and they are meticulous in how they approach problems they are trying to solve. I think great corporate lawyers are those who develop over time a level of respect so that their opinions are sought by boards of directors and members of management. Ive heard it said that one of the things that makes a corporate lawyer great is instincts. The same can be said of business people in general. Great lawyers simply have better instincts. They understand the problem, they understand what is trying to be addressed from a problem-solving perspective, and, instinctively, they come up with better answers than you get from just a good technical lawyer. I like to think of great lawyers as problem-solvers.

Great lawyers are also good teachers. As a corporate lawyer, you try to be careful not to make risk decisions for your clients. Our job as attorneys is to inform our clients honestly and candidly, and not be afraid to tell them the truth as we see it. Having told them the truth, we then help them understand their choices and help them make a decision. Obviously you will have a perspective that you need to share with the client, but ultimately, in almost every circumstance and I cant even think of any in which it wouldnt be true it is really their decision. The risk is theirs to take, so you have to explain to them the nature of the risk. I think it is important to be a teacher. A lot of very successful corporate lawyers are actually very good teachers. They can teach associates, they can teach other lawyers about the decisions that are being made, and they can educate their clients.

To have a successful legal team, the members must complement one another. We all have different skills, but what you definitely want is best in class in every category. For example, some of us may be better at relating to a room full of directors and communicating with directors and shareholders. If you have a shareholders meeting where you have to answer probing questions, this skill is very important. Another partner may be very good at generating documents and banging out deals. Obviously, combining the two skills would be best. We all try to do everything well, but the fact is that some of us do some things better than others. What you want is an A-Team, where everybody is contributing to the best of his or her ability.

My personal success strategy, if you want to call it that, is to get to know my clients. The key to the success I have had over the years is understanding my clients objectives and trying to assist them in achieving their objectives. I dont view my job as simply providing legal advice. I view it as being much broader than answering questions. Im an advisor, and I advise clients to the best of my ability in every way I think can be helpful to a client. If I can help them succeed in their business (e.g., get an important contract), I will do what I can. I may go beyond just simply giving them advice on legal matters. Often I cannot, but sometimes I can, and it makes a huge difference, particularly to young companies coming in the door. These companies may have limited resources, so anybody who is an extension of their company is very helpful to them.

Negotiating for Success

Whether negotiating documents or resolving a dispute, the way to succeed is to have an early, thoughtful conversation with key client decision-makers. When you go into a negotiation, you must have a result in mind. You should start the negotiation at a place that you believe will get you to the end result. I think people often make the mistake of going in and starting where they want to end up, which makes accomplishing your goal difficult. You have to recognize that it is a negotiation and there is some give and take over the course of several hours or over the course of several days. You have to be thoughtful on the way in, think about your objective, and then plot your course until you end up where you truly want to end up. I think another key element of successful negotiation is that those who are particularly successful understand the ethic of creating a win/win situation. If both parties walk away thinking theyve won, you have done a very good job.

The way I measure success is through the reaction of my clients to my efforts. I feel a genuine joy knowing that Ive worked with a company and the company has grown, has been successful, and has done wonderful things. There is really nothing that replaces that feeling. Nothing beats being part of a winning team. Having a relationship with your clients and sharing in their successes is really what makes practicing law wonderful.

Changes in the Business World

We try very hard to inform our clients of relevant major developments in the business and legal worlds. In addition to periodic updates, I think it is equally important that you have an ongoing dialogue with your clients. You need to meet with them as often as you can which is probably going to be no more than once every month to talk about developments in their world and issues which require attention. We have had a tremendous number of developments over the last several months concluding with the passage of the Sarbanes-Oxley Act. As a result, there has been a significant number of communications between our firm and our clients. Although historically clients might occasionally comment that we werent communicating enough, I would have to say in the last several months that clients are saying, We are getting so much information; we just want it boiled down to one or two key issues, if possible.

The economy has had a pretty dramatic impact on law firms in the last two years. The transaction activity in the 1998-2000 timeframe was just unbelievable. As a result, I would say it was almost as if you just had to be in the business to do well. Today, however, I think the only people who are doing well are those who really are the best in the business. You can attract business, but it is not just about being in the practice or just hanging out a shingle, as they say. You actually must have a reputation that is above that of others in the marketplace. For young practitioners this is probably the most significant recent trend that they have experienced. I expect we will see some turnover. Some lawyers will get out of the practice of corporate law and move to other disciplines. The cream will rise to the top.

All corporate attorneys have to be keenly aware of change and focus on being competitive. I think the most important thing you can do is be consistent and remember what has helped you succeed over time, continuing to focus on all the good things that create success. In my mind, the key is consistency. Having said that, I often think in terms of raising the bar what can I do that is different than my competitors and better for my clients?
Since I have begun the practice of law, the biggest change is the lack of commitment on the part of lawyers to their institutions. When I went to law school twenty years ago, it was my sense that where you started was where you were going to spend your career. Times have changed. Lawyers change law firms. Law firms have changed a lot over time and it is now more the exception than the rule to find a lawyer who has practiced 30 or 40 years at a single firm. This development is probably the biggest and most important change in the practice of law because of the impact on the culture of law firms.

Corporate Ethics

I do not subscribe to the notion that corporate ethics have been changed by recent developments. While there is greater sensitivity, the fact of the matter is that good lawyers have always advised their clients to do the right thing. It is unfortunate when lawyers forget their role: Being a good lawyer is advising your clients to do the right thing. In my experience, boards of directors and management want to do the right thing. There is a perspective that the world is filled with evil executives who want to abuse the system at every turn.

I just dont believe in this view of the world. I believe that, fundamentally, the vast majority meaning 99 percent of all executives out there are trying to do the right thing every day. Unfortunately, our views have been colored most recently by the 1 percent that seems to not put doing the right thing as a priority, or they misperceive what the right thing is and seem to attempt to justify it in their own minds. When the rest of us look at the situation, it is very clear that this is not the right approach.
The first rule of thumb should be remembering the shareholders when you are advising a board of directors and management. Their primary goal is to create value for shareholders, and you should always keep that in mind in terms of the advice you give senior managers and board of directors. Sometimes individual interests will cloud some of that decision-making. You have to keep your eye on the ball.

You want to believe that people are fundamentally honest. I guess what you learn if you practice long enough is that not everybody is honest. You have to keep your antenna up to the possibility that there may be some individuals out there who are not honest and candid, and that makes it difficult to do your job. If people are not being honest and candid with you, you cant give them good advice and potentially you just cant do a good job. I feel that people are fundamentally honest, but you certainly have to be aware when dishonesty arises and you have to address it. You, as a lawyer, must do the right thing. You must do the right thing no matter what the economic impact.

Future Direction of Corporate Law

We are entering a period in which we will see a great deal of regulation including the adoption of new rules and regulations by the SEC, and other regulatory authorities. We are going into a period that will be challenging for executives because they are going to have to understand a great deal more about the legal system. The role of the board of directors is fundamentally changing. Sarbanes-Oxley has absolutely changed the rules of the game. As time passes, these changes will become even more important and noticeable. Boards are going to become much more involved in decision making and in the general activities of their corporations. Boards have always been involved, but their responsibilities have been ratcheted up by the new law. Without a doubt, this is the most significant development in corporate law in many years.

Im concerned that there is not enough sense of community on the part of law firms. There is no question that we have become a business, and our approach is dictated by business concerns. As a business, you dont get a whole lot of points for helping in your community, serving on community boards, dedicating time to charities, doing lots of pro bono work. Id like to see lawyers be more committed to their communities.

Personally, I would like to see a time requirement associated with being a member of the bar. To be a bar member, you would have to spend 100 hours a year in some service-related activity, whether it is providing legal services to the poor or helping local schools or churches or doing whatever. Courtroom lawyers are forced to perform pro bono services because they get assigned cases. The judge says, You are going to take this case. The lawyer doesnt have a choice. This commitment has not universally taken hold. We are members of a community. Candidly, I think the reputation of the legal profession has not gone up in the past 20 years; it has gone down. The perception of lawyers has diminished and we need to change the system to restore the view of the legal profession as caring, fighting for justice, fighting for right. It is not about suing and getting lots of money.

Carmelo M. Gordian is chairman of Brobecks Firmwide Business and Technology Group. He practices in corporate and general business law with emphasis on corporate finance, venture capital, initial and secondary public offerings, mergers and acquisitions. Gordian represents technology-based growth companies, institutional venture capital firms, major technology-focused investment banks, and numerous public companies.
He received his B.A. cum laude from Harvard University in 1980 and his J.D. from Harvard Law School in 1983.
He is a member of the American Bar Association, State Bar of Texas, State Bar of New York and the Travis County Bar Association.
Gordian has been chairman of Brobecks Firmwide Business and Technology Group since 2000. He was managing partner at Brobeck, Phleger & Harrison llps Austin Office from 1994 to 2000 and a partner at Gordian & Associates from 1993 to 1994.
Representative clients include SBC Communications, Goldman Sachs & Co., SG Cowen & Co., Lehman Bros., Austin Ventures, Robertson Stephens, Sevin Rosen Funds, TL Ventures, Safeguard Scientifics, i2 Technologies, Nokia Corporation, Silicon Laboratories, and Inet Technologies.