Posted Nov 15, 2004 12:00 pm CST
Churay had served as general counsel at another public company only two years before, but much had changed. Sarbanes-Oxley, the public company accounting and reporting law, was on the books. Officers were facing increased scrutiny. Prosecutors were pursuing high-profile corporate chieftains. Quite simply, the general counsel job ain’t what it used to be.
“People are very cautious about accepting these positions,” says Churay. “General counsel and senior positions are still viewed as very good jobs, but people really want to know who is in the business team they are joining, what is the culture, what is the tone at the top, and will they be an integrated part of the team or be off on the sidelines.”
Frederick Krebs, president of the Association of Corporate Counsel in Washington, D.C., hears these types of comments more often. Even though Sarbanes-Oxley was enacted two years ago, many general counsel still are unsure of their responsibilities. The uncertainty is causing anxiety not seen before.
Nonetheless, Krebs says, lawyers are not shying from these positions. Ditto, says legal recruiter Martha Fay Africa. But, she says, lawyers who have never been in-house at a public company may not fully understand the challenges. She urges clients to explore the corporation to see what may await them.
Viet Le, associate general counsel of Phoenix-based Avnet Inc., admits that she did not fully comprehend how a legal department interacts with a company’s business units before she joined in 2001. Now, she says, she’d be asking a lot more questions if she were looking to join a different company.
For some attorneys, the challenge of figuring out the new rules and responsibilities of the public company’s legal team is the draw. Angela Williams is one. She left a firm this year to be vice president, deputy general counsel and chief compliance officer at Sears, Roebuck & Co. She did her due diligence to gain comfort with the ethics and integrity of Sears’ corporate officers and to ensure that she would have the authority and resources to do her job. But she saw the lingering uncertainty surrounding her role as a challenge.
“I thought it was a wonderful opportunity to work with an organization,” Williams says, “and help embed compliance in a company.”
When Chicago attorney Stephen Beard joined Heidrick & Struggles, an executive search firm, last year as assistant general counsel, the new burdens of working in a publicly held company were not a concern. Since then, he devotes significant time to corporate compliance. “There are challenges related to Sarbanes, but it is important to view those challenges as an opportunity to add value to management. If you do not look at it that way, then the burdens might trouble you.”
While Africa and Krebs see no decrease in the number of lawyers wanting to go in-house, corporations may be feeling the need to compensate lawyers for their additional troubles. A recent survey of 100 public companies by Corporate Counsel magazine reports the total compensation of general counsels rose 6 percent in 2003 over 2002.
Beard says any lawyer considering an in-house job needs to do some homework. He says lawyers need to focus more on how the legal department is run and the top management’s philosophy on corporate governance. “How does management view the requirements of Sarbanes-Oxley? Do they view it as helpful or as more of a burden?”
Despite the changes, Le has no hesitation about staying in-house. Like many other lawyers who have transitioned into the general counsel’s office, she says there is only one thing worse than the strict requirements of Sarbanes-Oxley: going back to a law firm.