Archer Daniels Midland GC: Firms Will Have to Change

D. Cameron Findlay,S enior Vice President, General Counsel and Secretary of food processing giant Archer Daniels Midland Company , said outside lawyers should stop worrying so much about the intellectual fine points of the law, and instead figure out how it applies to his business.

Named GC of ADM in June 2013, Findlay said he doesn’t want to hear, “I can get back to you with a 10-page memo in two weeks,” from his lawyers. Instead, he prefers simple, quick, and sound decision-making that leads to favorable results.

Findlay came to ADM with a diverse resume and a seasoned perspective. He was previously a partner at Sidley Austin , GC at insurance and risk management multinational Aon , and GC at medical device manufacturer Medtronic . He’s also served in Washington, D.C. for two different Bush administrations and, prior to starting his legal career, clerked for Supreme Court Justice Antonin Scalia.

A graduate of Northwestern, Oxford, and Harvard, Findlay grew up in Elkhart, Indiana. Elkhart is “the mobile home and RV capital of America,” Findlay was quick to note.

In addition to discussing his unique career, Findlay spoke to Big Law Business about dealing with government regulators, the importance of responsiveness from his outside counsel, and whether law firms should be paying so much to rent office space.

Part I Excerpts:

There’s a tendency ... to think the people who work in government are lazy, not hard working, evil or ill motivated. ... My experience is that people in government are people like you and me who are trying to do the right thing.

The thing in-house lawyers value the most are responsiveness, getting to the point, and understanding the business—not so much the intellectual fine points of the law.

In light of the role that in-house counsel play these days, and given the cost pressures on in-house counsel, law firms are going to have to change.

When I’m at a law firm with the ability to work using mobile devices I often walk down the hall, and no one is at the office. Yet they’re renting all this space. It’s very expensive, and that ultimately gets passed on to the client.

Below is an edited transcript of the first installment of the interview.

[Image "" (src=http://www.equaljusticeworks.org/sites/default/files/u2736/d._cameron_findlay.jpg)]Big Law Business:You’ve made a lot of unique stops throughout your career. How does that diversity of experience inform your role as GC?

Findlay: You know, I think spending time in government is a great experience for being a general counsel. So much of what a GC has to do these days is deal with regulatory agencies and investigations by government agencies, as opposed to just doing contract terms and the day to day work of a company.

And so it’s really important to know how regulators and government officials think. There’s a tendency of people who haven’t served in government, and maybe even more so on the part of business people, to think the people who work in government are lazy, not hard working, evil or ill motivated.

My experience is that people in government are people like you and me who are trying to do the right thing, and you have to understand the way they view the world and how they view their mission in order to be responsive to them.

It doesn’t mean they’re always right, obviously. There’s a lot of times we think they’re wrong or misguided, but you shouldn’t treat government as the enemy. You ought to treat them as a partner trying to get to the same objective.

Think about safety regulations, for instance. If you view government regulators from OSHA as being the enemy, you’re going to hunker down and make bad decisions.

If you think of them as your partners, you’ll go to them and seek compliance assistance from them to make sure you’re moving towards the shared objective of keeping your employees safe. So I really think being in government is a helpful experience.

I was at a law firm for eight years, and I think that’s also a very helpful experience, because you have to get so deep into matters when you’re at law firms. You have to become a detail oriented person.

It’s very easy if you spend your whole life in-house to kind of skate along the top of issues and not get in very deep. Sometimes one needs to dig in really deep to an issue and understand all the aspects.

I’ve also benefited by being at Aon, which is essentially an insurance and human resources business. I’ve been able to bring that knowledge with me, and it’s been directly applicable to stuff we do here.

At Medtronic we had so many government investigations, including an FCPA investigation. I arrive at ADM and, lo and behold, I have an FCPA investigation. I think the kind of skills one gets as a GC are pretty transferable across industries.

You know, I think it’s funny. I was talking to a headhunter the other day, and she told me that the average tenure for in-house counsel is something like three or four years. I don’t think, when I look at my peers, it’s unusual to move around.

Big Law Business: What are the unique challenges for an in-house legal department in the agriculture industry?

Findlay: I think as other countries become wealthier they’ll want to enhance their environmental and food safety regulatory programs. This is something that has really been a developed world issue, but it’s going to be a worldwide issue. And we’ll have inconsistent regulatory systems around the world.

Another issue lurking out there in front of us is genetically modified organisms, or GMOs. In Europe GMOs are very disfavored. There are some countries where there are labeling requirements, and some countries where you can’t sell them at all.

There have been moves in the U.S. to become more like Europe, so the whole GMO movement is something we’re watching very closely.

Big Law Business: Are these areas where there is space for law firms to jump in and get ahead of the curve?

Findlay: On the environmental and food safety and GMO stuff, global law firms, for a company like us that’s in more than 100 countries, are very attractive because they can handle an issue in a number of countries.

So I think that if I were running a law firm and wanted to appeal to a company like ours, I would make sure we had that capability in a lot of major countries where we’re trying to sell our products.

Big Law Business: What do you wish you would have known when you were practicing with law firms before you went in-house?

Findlay: When I worked at Sidley I would massage a brief over and over and over again to make it perfect, beautifully written, and eloquent. If I was working on a memo I’d do the same thing.

What I wish I’d known was that the thing in-house lawyers value the most are responsiveness, getting to the point, and understanding the business—not so much the intellectual fine points of the law.

It’s impossible to know that until you’re in-house, I think. When you’re calling an outside lawyer for assistance on something it’s probably because one of your business colleagues has asked you a question. You really don’t know the answer, and you want to get a quick answer.

You don’t want to hear, “I can get back to you with a 10 page memo in 2 weeks.” You really want them to get a quick and well-reasoned answer for you, and not worry about polishing it to the utmost extent.

Big Law Business: Are law firms are lagging behind in-house legal departments, in terms of their business models?

Findlay: I wouldn’t say they’re behind, but I would say that, in light of the role that in-house counsel play these days, and given the cost pressures on in-house counsel, law firms are going to have to change. They have been changing, but they’re going to have to continue to change.

I think a lot of general counsels are not happy with the billable hour way of charging for legal work. It doesn’t align the firm’s incentives with the client’s. It generates additional work. It doesn’t measure value added, and so we’re all trying to come up with other ways to get legal firms to operate.

The traditional way legal firms have handled things is they would take over a piece of litigation, and they would handle every aspect of the litigation from soup to nuts, from writing the briefs to sorting out all the documents. While we might want to pay someone $800 an hour for the really highest quality legal work, we don’t want to pay $500 an hour for doc review.

I think some forward looking law firms have set up in-house contract lawyer operations where they charge less for looking at documents and things like that. I think the firms that are forward looking in that way will be the ones that succeed.

You know, also, if anyone was crazy enough to make me the managing partner of a law firm I would really think about whether it makes sense to rent as much expensive space as they rent in the big cities of the country.

When I’m at a law firm with the ability to work using mobile devices I often walk down the hall, and no one is at the office. Yet they’re renting all this space. It’s very expensive, and that ultimately gets passed on to the client.

So I think that law firms ought to experiment with hoteling offices, with smaller offices, with putting as many functions as they can in cheaper space, in the suburbs or something like that.

I just think law firms are going to have to fundamentally change the way they operate, not today, not tomorrow, but over the next decade or so.

Big Law Business: What are the primary ways you’re trying to rein in legal costs at Archer Daniels Midland? Are using alternative fee arrangements? E-billing systems?

Findlay: For us it’s all of the above. We’re trying to cut down the number of firms we use and concentrate our work on a small number of firms. We hope that will allow us to negotiate good fee arrangements and alternative fee arrangements with the law firms.

We have an e-billing system, but it’s kind of a first generation e-billing system. We’d like to put in an e-billing matter management system so that we can gets lots of robust data about the law firms. That will help us budget for matters. It’ll help us track progress against budgets. It’ll help us evaluate firms on particular matters and evaluate firms vis-a-vis each other.

Having good data will help us create alternative fee arrangements in the future because we’ll know what a certain matter ought to cost, and we can tell the law firm with some confidence, “We’ve had 20 matters like this and it usually costs x, so we’d like to enter into a fixed fee arrangement forx. And If you’re going to do 10 of them, do 10xminus 20 per cent or something like that.”

All the things you’ve mentioned are things we’re trying to do. And since we’ve concentrated work on fewer law firms, we’re asking them to give us volume discounts that are based on the amount of work we give them.

Big Law Business: What are some other ways you’ve seen technology change the practice of law, or the relationship between inside and outside counsel?

Findlay: It’s just enabled one to work from wherever one is, and to have access to all the documents and information lawyers need to do their jobs.

I think back to the days when I joined Sidley. It was really kind of routine and almost expected to be in on Saturdays, at least Saturday mornings. But I think hardly anybody goes into offices on Saturday anymore, unless they want to escape their children or something.

You don’t carry around big stacks of paper documents anymore if you’re writing a brief or working on a deal. It’s all virtual, so you can go in from anywhere in the world as long as you have an internet connection.

The good aspect is you can go home and have dinner with your children and go to bed and not have to stay in the office until 9 or 10 at night. The bad news is when you’re on vacation you can’t escape emails.

I remember when I was working at Sidley I went on vacation, and I would check my voicemail once a day. These were the days before the ability to even look at email, and you’d always kind of brace yourself before you found out how many messages you had.

I came home one night from the beach and checked my voicemail, and it said I had 50 new messages, and I just freaked out. It was during the Clinton administration, and they had sought the FBI records of people who had worked at the White House in the Bush Administration. It was said to be a mistake, but there’s always kind of suspicion it’s an “enemies list” sort of thing.

So USA Today had printed the list of the names of whose files were searched, and mine was one of them. People from all over the country were calling and saying, “Hey I saw that you’re on the Clinton enemies list.” So it wasn’t anything work-related.

But the idea that you wouldn’t know what was going on at the office until 6 pm, and then you were just doing it by voicemail, is kind of crazy.

Big Law Business: What 3-5 firms are you doing the most work with?

Findlay: Sidley Austin, Baker & McKenzie , Faegre & Benson , and Stinson Leonard Street . We’ve also done a lot of work with Skadden Arps .

Part II of the D. Cameron Findlay series will include: Findlay’s opinions on law firm lunches and sporting events, clerking for Justice Scalia, and his lovable, but still-cursed, Chicago Cubs.