By Joe Calve
In his nearly 20 years as the top legal executive at General Electric, Heineman redefined the role of the GC in the modern corporation. The key to a GC’s success, he says in his indispensable new book, “The Inside Counsel Revolution,” turns on her ability to resolve the tension inherent in the dual roles of partner to business leaders in the drive to achieve performance goals and guardian of the corporation’s integrity.
That’s no easy trick given the “Herculean” task the typical GC faces. Indeed, as Heineman marches readers through a parade of corporate horrors – Enron, WorldCom, HP, Siemens, Wal-Mart, GM – he’s compelled to conclude that inside counsel, too eager to please their business partners, have “failed miserably as guardians.” He does not, however, abandon hope, citing “the many voices maintaining that a strong guardian role for the General Counsel is both desirable and feasible.”
There is no shortage of doubters. They survey the wreckage littering the corporate landscape and conclude that reconciling the partner-guardian roles can’t be done. Securities law maven John C. Coffee, Jr., a professor at Columbia Law School, is a prominent example. Coffee believes inside lawyers are fatally compromised by the very nature of their roles. In his book, “Gatekeepers: The Role of the Professions,”
he poses the obvious question: Why do so many corporate gatekeepers, including inside counsel, fail?
He answers his question with a question.
“Put simply,” he writes, “the real question is whether one can trust a watchdog hired and paid by the party to be watched.”
The answer is no, Coffee says. Not so fast, counters Heineman, who is no Pollyanna. He fully recognizes the difficulty of the path. In the wrong circumstances at the wrong company with the wrong CEO, the path can lead to a tunnel with no light at the end.
Still, Heineman’s is a brighter vision. His prescriptive approach is infused with a healthy optimism about the profession, where the legal grass is definitely greener inside the corporate fence. That’s because things have come a long way since the days when inside counsel were looked upon with derision – even pity – as lawyers who washed out at the big firms. Thanks in no small part to Heineman, the in-house backwater is now the wave of the future in modern practice. And it can be an exhilarating, enlivening, fulfilling professional ride.
“I do not believe that the choice for general counsel and inside lawyers is to go native as a yea-sayer for the business side and be legally or ethically compromised, or to be an inveterate naysayer excluded from key discussions and decisions and from other core corporate activity,” he writes. “Indeed, I think being both an effective partner of business leaders and respected guardian of the corporation is critical to the performance of each role. I deeply believe that this fusion is possible.”
Heineman calls his book “my last will and testament on the role of General Counsel in the high performance with high integrity corporation.” It’s impossible to do it justice in a short review. “The Inside Counsel Revolution” pulls together skeins of string he has gathered over the years – speeches, articles and broad experience in private practice (WilmerHale, Sidley, Williams & Connolly), academia (Harvard, Yale), government (Department of Health, Education & Welfare), the Supreme Court (clerk for Potter Stewart), and, of course, at GE (Senior Vice President and General Counsel) – and weaves it into a comprehensive and coherent framework for the GC role – and the role of lawyers generally. The key is asking not only the first question, “Is it legal,” but the second, harder, more important question, “Is it right?” Along the way we get his perspective on the full range of topics buzzing among today’s legal commentariat: the trouble with Big Law, alternative fee arrangements, disaggregation, globalization, technology, legal operations, inside-outside relations, corporate boards, project management, legal education, associate development, leverage, legal media, legal process outsourcing, diversity, pro bono.
It is an exhilarating, invaluable work that has earned widespread praise. To quote one of the many over-the-moon comments, Karen Dillon, former editor of The American Lawyer and Harvard Business Review, says, “This is a must-read for any general counsel – or those who aspire to the title. Ben Heineman figuratively – and now literally – wrote the book on how to be a general counsel for a world-class company. It should be within arms-reach of any general counsel who aspires to do the right things, too.”
Doing the right thing is the province of the “lawyer-statesman” (or stateswoman), which is not a new concept. But Heineman infuses it with fresh vitality. “The General Counsel as lawyer-statesman is not a passive servant inside the corporation, doing what the ‘client’ – the directors, CEO, and business leaders – tell her to do,” he writes. “[S]he must have the personal and organizational skills to find the difficult (at times treacherous) path between being both a partner to key businesspeople and guardian of the corporation in the service of the basic corporate mission: fusing high performance with high integrity and sound risk management.”
In Heineman’s case, you don’t have to look far for the inspiration for his vision and remarkable career. The apple didn’t fall far from the tree. His father, Ben W. Heineman, Sr., who died in 2012 at the age of 98, was a singular figure who pursued roles in law, business and government during an extraordinary career. Indeed, to hear those who knew him talk, such as Joseph A. Califano, Jr., President Lyndon Johnson’s chief domestic aide, he was the embodiment of the lawyer-statesman model embraced by his son.
“He was quite a selfless person,” Califano told The New York Times upon the senior Heienman’s passing. “He had no personal agenda. He told it like it was, which is very hard, and the most important thing you can do for a president or one of his top aides, like me, because people are usually fawning all over you.”
In an interview with Metropolitan Corporate Counsel, excerpted below, Heineman talks about his parents and a range of other topics.