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When General Counsels Return to Law Firms

Sept. 19, 2016, 8:05 PM

Brackett Denniston, who sat at the helm of General Electric’s law department for 11 years, is rejoining his old law firm Goodwin Procter. But one thing should be clear: his return to the law firm where he started as an associate in 1974 will not involve drumming up GE business for the firm’s 900 lawyers, he said in an interview.

“I have been very clear, just as my predecessor was clear, that I’m not going to chase business with the company that I served,” said Denniston, “and no one here should have any illusion about that. I wouldn’t have come back here in a second if that wasn’t part of the calculus.”

He further explained that doing so would undermine the role of his successor, General Electric’s current general counsel Alex Dimitrief, who has already handled his fair share of legal challenges in the short time he’s been top dog of the legal pen.

“That’s not what you do to your successors,” said Denniston. “They should make their own judgments without you coming and asking for it, or feeling under any obligation. That’s the way that I would have wanted it, and that’s certainly the way that Ben (Heineman, the GE general counsel before Denniston) treated it and that’s the way I’m going to treat it.”

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Denniston didn’t offer the comments unsolicited, but made them in response to our own line of questioning: We asked him how much his hire at Goodwin would bring the law firm closer to General Electric, and how much his role would entail working to strengthen the firm’s relationship with GE. His response — in which he notes “I have been very clear” to Goodwin — touches on the delicate dynamics that come when a former general counsel starts working in Big Law, alongside lawyers who regularly pitch business to their former company.

Susan Hackett, a legal consultant who speaks on in-house matters, said that general counsels tend to self-impose limits on direct contact with their old company.

“I think that most who go to firms would not want to be seen as having anything like that kind of role,” said Hackett, via email.

“For some former GCs it’s more a matter of courtesy and marquis value for both the firm and the former GC — they’re given an office, they consult on occasion, they’re in the office as they like, but they’re not in the heavy lifting business — they’re mostly retired with a place to go when wanted/needed. It’s a courtesy to both.”

Tom Gottschalk, who served as general counsel of General Motors Corporation from 1994 to 2006, said GM prohibited him as a matter of policy from billing any hours after his departure to Kirkland & Ellis in April 2007.

“A concern I’ve heard expressed is when a person is getting ready to retire, and they are picking their successor, and they would say, without saying the words, ‘I’m thinking of appointing you, but would you be willing to retain me for X dollars a year to perform services?’” Gottschalk explained. “A sweet heart deal could be constructed so that the person who retires could get a consulting fee after retirement.”

We checked in with other retired general counsel to see if there’s any rule — unwritten or written — about seeking business from your old employer.

Tom Sager, who joined Ballard Spahr in 2014 after working in-house with DuPont for 37 years (most recently as general counsel), said that he personally steers clear of Dupont matters, even though Ballard Spahr remains one of the company’s longtime legal advisors in both M&A and litigation.

“Once you’re out, you stay out of the way,” said Sager. “It’s out of respect for the person coming in and I think that’s a healthy way of doing it. You don’t want to hang around, I don’t think.”

Instead, a large part of Sager’s job lies in other forms of business development: speaking at law conferences, tapping his Rolodex of other in-house lawyers, and offering his perspective to in-house counsel trying to cut back on their legal spend. As DuPont’s GC, Sager was known as a pioneer for implementing what’s known as “convergence,” or the reduction of the number of outside law firms a company engages. Now, Sager is taking that model and working with in-house counsel to create their own forms of convergence. [And by the way, Ballard Spahr is a great firm to put on that reduced panel, is what goes unspoken in such instances.]

Sager said that he also advises Ballard Spahr attorneys on identifying new business opportunities.

“The best opportunity is a change of leadership at the top [of a law department],” said Sager. “Displacing firms with new relationships is very difficult, unless there is a falling out or they got a bad result. So I say, whenever there is a change of leadership in an in-house law department, canvas people to see who knew this person, or even who went to law school with the guy.”

So, it’s not very cool to use aggressive sales tactics on your former employer as a retired general counsel, but it’s OK to provide your lawyers with general knowledge of how in-house law departments function, and what works best.

James Shehan, who works at Lowenstein Sandler as senior counsel and is the former general counsel of Novo Nordisk, said that it’s more important these days for law firms to have contacts scattered across the industry — something that general counsel naturally possess as a result of their occupation.

“If you went back 20 years ago... it was less common for people to return to private practice, and it was much more of a one-way street,” said Shehan. “Nowadays, it’s not uncommon for it to be a two-way street.”

But Denniston at Goodwin Procter is planning to focus his time on handling cases and taking on some pro bono matters, without any mention of business development.

“I think my role will be to get involved in things that are helpful to the firm and things that I’m interested in. Sometimes that will be cases or matters; sometimes it will be people looking for help in crisis management or investigations or governance, and sometimes it will be pro bono, because I remain vitally interested in that.”

And why Goodwin? Well, Denniston worked at the firm as a litigation associate from 1974 to 1982, at which point he joined the U.S. Attorney’s Office and worked as Chief of the Major Frauds Unit from 1982 to 1986. When his tenure with the U.S. Attorney’s Office reached a close, he rejoined Goodwin as a partner from 1986 to 1993.

“I came back here because I know people here,” said Denniston, pointing to his relationship specifically with Regina Pisa, the chair emeritus of the firm. “The firm has a great culture and it’s where I started. And it’s a darn good global firm, so it’s a place where I can do a lot of other things.”

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