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Microsoft’s Legal Group Reshuffling Creates New In-House Roles

July 8, 2021, 10:00 AM

Microsoft Corp.’s legal department has had a flurry of appointments—and some departures—as it reorganizes itself to meet new global regulatory requirements.

The Redmond, Wash.-based technology giant’s in-house law and public policy team provides support for Microsoft as the company copes with an array of legal and regulatory matters and engages in big-money battles with key competitors.

Bradford Smith, Microsoft’s top lawyer, outlined some of the changes last week in a memo obtained by Bloomberg Law. Smith is a veteran technology industry executive who has been outspoken on legal and public policy issues facing the sector.

Deborah “Dev” Stahlkopf is leaving the company’s general counsel role to become the new top lawyer at Cisco Systems Inc. Stahlkopf will see her position be split between Microsoft deputy general counsel Lisa Tanzi and Hossein Nowbar.

Thomas Burt, a veteran Microsoft lawyer, will continue to lead the company’s customer security and trust teams, while associate general counsel Rebecca “Becky” Lenaburg and other in-house lawyers will assume leadership of an ethics and compliance organization led by Matthew Penarczyk, according to company sources.

Penarczyk recently left for a role at TikTok Inc., joining Microsoft’s former chief intellectual property counsel Erich Andersen.

Smith, a former Covington & Burling partner who has worked at Microsoft since 1993, didn’t respond to a request for comment about the company’s in-house legal changes. He was promoted to president and chief legal officer in 2015, having spent the previous 13 years as Microsoft’s general counsel, a position he inherited following the 2002 retirement of former legal chief William Neukom.

Additions & Exits

Microsoft’s in-house shakeup will also see its vice president of technology and corporate responsibility Shelley McKinley become chief legal officer for GitHub Inc., a San Francisco-based software company it paid $7.5 billion to buy in 2018.

Tyler Fuller, GitHub’s general counsel and a longtime associate general counsel at Microsoft, has been tapped to backfill Nowbar’s former deputy general counsel role at Microsoft, said a company source briefed on the personnel changes.

Other structural and hierarchical changes include regional vice president and Asia chief legal counsel Antony Cook being promoted to a newly created position that will give him oversight for all global regional legal roles, said the source. The Singapore-based Cook, a former senior associate at Freshfields Bruckhaus Deringer, joined Microsoft in 2002, the same year Smith became general counsel.

Microsoft also named a new head of litigation last year in deputy general counsel Jonathan Palmer, a former litigation partner at Orrick, Herrington & Sutcliffe hired by the company a decade ago. Palmer took over a role previously held by David Howard, another deputy general counsel who made headlines several years ago for seeking to move some of the outside legal work that Microsoft sends to law firms away from the billable hour to alternative fee arrangements.

Howard relinquished his litigation leadership duties for health reasons, the company source said, adding that he remains with Microsoft in an emeritus-type advisory role.

Other lawyers to recently leave Microsoft include director and associate general counsel for global partner solutions Elke Flores Suber—the first Black woman to become an assistant general counsel at the company—who took a job earlier this year at Facebook Inc., said a source. Facebook also hired Microsoft assistant general counsel for compliance and ethics Jeannine Lemker last year as a director and associate general counsel for compliance programs.

Salesforce.com Inc. hired Microsoft senior director and policy counsel for privacy and artificial intelligence Edward Britan as its head of privacy and as an associate general counsel in January, the same month the company named a new legal chief of its own. In June, Salesforce added Microsoft director of privacy strategy Ben Casady to be its director of privacy compliance and communications.

Stacia Marie Jones, a former associate general counsel for global workplace investigations in ethics and compliance at Microsoft, was in October named global head of inclusion, diversity, equity, and action for Lululemon Athletica Inc.

On the plus side of the in-house legal ledger, Microsoft hired Curtis “C.J.” Mahoney in March as a deputy general counsel for U.S. international trade and the company’s cloud computing service Azure. The company earlier this year welcomed aboard White & Case senior associate Trisha Grant and Baker McKenzie associate Sherif Ali as a corporate counsel and principal corporate counsel in Washington, respectively.

Those hires came after Microsoft added senior director for privacy and data policy Christopher Calabrese, a former interim co-CEO and vice president for policy at the Center for Democracy and Technology, a Washington-based nonprofit supported by the technology sector. The CDT’s most recent federal tax filing for 2019 shows that Calabrese received nearly $251,500 in total compensation that year.

Smith, Covington Pay

Microsoft’s most recent annual proxy statement shows that Smith received nearly $16.7 million in total compensation last year. The bulk of Smith’s pay package was comprised of more than $12.4 million in Microsoft stock awards, as well as nearly $4.2 million in cash. Securities filings also show that Smith sold off more than $44.5 million in Microsoft stock during 2020, as well as another $2 million this past May.

Smith currently owns nearly $179.5 million in Microsoft stock, per Bloomberg data, as well as about $3.5 million in stock for Netflix Inc., whose board he joined in 2015.

Covington, Smith’s former law firm, was paid $50,000 by Microsoft during the first quarter of this year to lobby the U.S. government on a wide range of issues. Microsoft paid $200,000 to Covington for federal advocacy work in 2020.

Covington also handled more than 3% of Microsoft’s U.S. federal litigation portfolio within the past three years, according to Bloomberg Law data. Sidley Austin most frequently represented the company in federal court, with more than 21% of Microsoft’s caseload during that same time, followed by Davis Wright Tremaine, Fish & Richardson, and Perkins Coie, who collectively had a role on 23% of cases.

On the transactional front, Simpson Thacher & Bartlett advised Microsoft on both its proposed $19.6 billion acquisition of Nuance Communications Inc. and $7.5 billion buy of ZeniMax Media Inc. Microsoft folded ZeniMax into its Xbox video game unit, closing that deal in March, a month before it made a big bet on health care and artificial intelligence with its bid for Nuance. That deal should close by year’s end.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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