In-house lawyers are dusting off crisis management plans and reading contracts with a different eye as they try to guide U.S. business leaders through all the uncertainty caused by the novel coronavirus.
“Their CEOs are really depending on them, not just from a legal standpoint, but from a business leadership standpoint,” said Sonya Olds Som, a former Big Law immigration attorney who is now a partner at executive search and consulting firm Heidrick & Struggles International Ltd. “It’s great crisis management experience and a chance to show real leadership and value.”
The challenges are acute in the most disrupted industries such as health care, higher education, hospitality, and transportation, many of which are now seeking billions in federal government aid.
Alexander Dimitrief, a former general counsel and head of litigation at the General Electric Co., said that a top priority for law department leaders during these turbulent times should be to “slow down the room” by thinking through the long-term business implications of potentially hasty decisions. Mistaking speed for decisiveness, said Dimitrief, can often result in overlooking critical dissenting views.
“Commercial leaders will understandably be under pressure, real or perceived, to minimize the immediate damage to a business,” said Dimitrief, now a partner at legal consultancy the Zeughauser Group. “GCs should work with their CEOs and other C-suite leaders to remind everyone it’s the long-run that counts and not straying from an organization’s values is essential for enduring success.”
For some, that process involves making radical changes.
Todd Maron, a former general counsel at Tesla Inc. hired last year to head up legal at electric bike-sharing startup Wheels, told Bloomberg Law that a critical component of his job right now is finding a way to quickly shift a business so that it serves those who perform critical functions. For Wheels, that meant suspending its operations until at least April in order to limit the spread of Covid-19.
Maron said he is optimistic that Wheels will be able to use the extra time to pivot toward a micromobility approach that works in an era of social distancing.
Coping With Chaos
Starting new in-house roles means both adjusting to different duties and dealing with the crisis simultaneously.
Jennifer Wolsing, for example, became general counsel for the state-run Kentucky Horse Racing Commission on Feb. 20.
“I don’t know a horse from a hole in the ground,” joked Wolsing, a former Husch Blackwell associate who spent the past decade as an in-house lawyer for the Kentucky Cabinet for Health and Family Services. Besides brushing up on equine law, Wolsing found herself researching how the KHRC could invoke the appropriate statutory authority to reschedule the popular horse race.
Last week, the commission voted unanimously to move the Kentucky Derby from May 2 to Sept. 5.
As if that wasn’t enough, Wolsing found a way to comply with a Kentucky open meetings law requiring all KHRC proceedings be public, an additional complication in an era of social distancing. Without being able to use a physical location, Wolsing and her team found a solution: Facebook Live.
Force majeure or so-called Act of God contract clauses have become part of the in-house conversation in a way most lawyers haven’t experienced since law school.
“If you can’t shore up and analyze your obligations quickly, you risk being negatively impacted more than you otherwise would be,” said Chris Young, the first-ever general counsel for crowdfunding platform GoFundMe and current in-house legal chief at San Francisco-based contract management services provider Ironclad Inc.
Many contracts are executed, filed, and then forgotten, Young said. Being able to deftly dive into the details of such agreements can be what separates savvy in-house lawyers from those less fortunate.
Young said the ability to adjust in real-time, whether it’s parsing contract language or crafting a clever crisis management plan, is what will impress business leaders turning their lawyers for answers.
Som, the legal consultant, sees an opportunity for rising stars.
“Those who come through it well, who had good crisis response plans in place that they’re now utilizing, who lead with a cool head on their shoulders and who prove themselves to be compassionate, creative, resilient, and indefatigable, will have inspiring stories to tell afterwards,” she said.
Going It Alone
Christopher Meier is the general counsel, chief compliance officer, and sole in-house lawyer at The CMI Group, a call center operator based near Dallas that provides outsourcing services to client companies.
Aside from a few memos he received from national labor and employment law firms, Meier said he didn’t have a whole lot of guidance about what templates to use when it comes to a pandemic response plan. Suddenly, CMI needed to move most of its employees out of dense call centers. He leaned on a benchmark group of colleagues to figure out how best to proceed in this new environment.
“We kind of created our own mini-law firm for groupthink purposes,” said Meier, noting his ad hoc assembly of eight or nine in-house lawyers is more attuned to the needs of smaller peer companies to CMI than outside counsel. “Some of them even found stuff from OHSA, the Center for Disease Control, and the Department of Health and Human Services that was specific to influenza pandemic planning.”
There are other practical complications for in-house legal chiefs working from home, primarily family members who heed neither conference calls nor privacy concerns. Meier and Ironclad’s Young both have young children at home, as does Tara Plimpton, a longtime in-house lawyer at GE who is poised to become the new general counsel at Regions Financial Corp.
“I’m fortunate that I’m not yet working 10 hours a day,” said Plimpton, who doesn’t start her new job until April 13 but in the pandemic’s first week was busy handling home-schooling and monitoring video game usage.
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