Terex Corp. general counsel Eric Cohen is preparing to leave the equipment maker after more than two decades for what he hopes will only be a brief retirement.
“Now that it faces me, I’m starting to think about what I’m going to do every day,” said Cohen, who will leave Terex at year’s end. The veteran in-house lawyer, who in the past has been outspoken about his criteria for selecting outside counsel, told Bloomberg Law that he’s considering opportunities at a law firm or in private equity.
Cohen, 61, will cede Terex’s top in-house legal role to deputy general counsel Scott Posner, a move that will see the company’s chief ethics and compliance officer Stacey Babson-Smith report solely to CEO John Garrison Jr.
“This is a natural progression, they’re ready to take over,” Cohen said of his two Terex colleagues. Babson-Smith and Posner were both hired by Cohen — in 2002 and 2004, respectively — and have handled a variety of in-house legal roles at the Westport, Conn.-based company, which makes aerial platforms, cranes and other machinery geared toward construction and industrial use.
The promotion of Posner and new reporting line for Babson-Smith, who has served as Terex’s ethics chief for the past 11 years, came last week amid a corporate overhaul that also installed new heads of business development and human resources at the company. The series of executive moves occurred ahead of Terex’s third quarter financial results expected Oct. 31.
Terex has been busy in recent years selling off assets. In February, the company unloaded its Germany-based Demag Mobile Cranes business for $215 million to Japanese manufacturer Tadano Ltd. Cohen said that after hitting a high of $10 billion in revenue, Terex is now at about half that, and the company’s divestitures have cut into the size of its in-house legal department.
“We’ve been as many as 23 lawyers, and when I leave we’ll be down to about 10,” said Cohen, who began working with Terex in 1989 when he was a partner at New York-based Robinson Silverman Pearce Aronsohn & Berman. Cohen moved into Terex’s general counsel role in early 1998, four years before Robinson Silverman merged with what is now Bryan Cave Leighton Paisner.
Bryan Cave, which represented Terex on the Demag deal earlier this year, expanded in Germany via its trans-Atlantic combination in 2018 with British firm Berwin Leighton Paisner.
Posner, a former Weil, Gotshal & Manges associate now poised to become Terex’s new general counsel, said the company has traditionally turned to Bryan Cave and Fried, Frank, Harris, Shriver & Jacobson for M&A and securities work.
Local and regional law firms are also often retained by Terex, which by the nature of its business frequently deals with product liability litigation, Posner said.
Controlling the Purse Strings
How to choose those various firms — and how much to pay them — is the calculus that Cohen faced during his long in-house career, one that a proxy statement filed by Terex this year shows earned him nearly $3.4 million in total compensation in 2018.
More than a decade ago, Cohen made legal business headlines over a dispute he had with a law firm that presented him with a large legal bill for document production. Unhappy with the quoted price, which involved paying first- and second-year associate rates at hundreds of dollars per hour, Cohen floated the idea of outsourcing the entire project to India for less than $30 per hour.
The threat worked because the unnamed firm, which Cohen still declined to identify, came up with a plan to use contract lawyers in Kansas City, Mo., slashing the total cost of the project to something more manageable.
“It wasn’t that much more than doing it overseas and you could still control the quality,” Cohen said. “Smart law firms understand the changing trends and adapt to technology and other ways of providing services that they might otherwise lose on a more efficient basis.”
Cohen said Terex has no set outside legal panel, mostly due to the company’s need for product liability counsel in far-flung jurisdictions, instead relying upon a network of firms that is uses on a regular basis. Choosing those firms will now fall to Posner and Babson-Smith, who like Cohen are graduates of the Benjamin N. Cardozo School of Law. The new regime, however, will incorporate some key changes.
Babson-Smith, who once led labor and employment legal matters at Terex, worked closely with Cohen in crafting the company’s ethics and compliance program, which grew out of a long-resolved SEC investigation. With Cohen now moving on, she said it simply made sense for Terex’s compliance chief to report directly to the CEO.
Babson-Smith and Posner are working together to make sure that Terex’s outside law firms and other vendors embrace diversity.
“It’s a factor, not a requirement, but it makes a difference,” she said. “Scott and I were interviewing insurance providers and four panels came in, one of which had no women in the room.”
Diversity, it seems, is noticeable when it’s not there. “When you’re used to it being diverse, and it’s not, it really does stick out,” added Posner.