Discussing legal innovation with Dan Cooperman

CLO

During recent decades of turbulent technological change, Dan Cooperman has been a mastermind of legal strategy for global tech titans. He supported Oracle during ten years of intense acquisitions and presided over Apple’s first wave of iPhone rollouts across the world. In this exclusive interview, Cooperman reflects on the changes and challenges shaping the role of the General Counsel – past, present and future.

Q: What was it like being the General Counsel for Apple, and managing the legal side of innovation during an exciting period for the tech giant? What were the biggest challenges of your role?

I’m smiling because your question takes me back to the frenetic environment I encountered when I arrived at Apple’s Legal Department in September 2007. The iPhone had just been announced and was prepared to go on sale in the United States in the fall. Following that it was scheduled to be introduced in about 70 countries simultaneously. Imagine – telephony is one of the most highly regulated industries in the world and Apple had never been in the telephone business. That Apple sought to enter so many markets at one time was mind-boggling to me and posed an extraordinary challenge to our legal team.

Not only were there numerous patent, copyright, trademark and trade secret issues involved, but all of the contractual arrangements we made with respect to the manufacture, distribution and marketing of the iPhone had to be negotiated and documented. Completing these arrangements required close coordination among in-house lawyers, our executive management and our outside law firms globally.
One of my biggest challenges was to keep up with the torrent of patent litigation matters that swelled exponentially during my tenure. All in all, it was a period like no other in my career, a special moment in tech history really.

Q: During your time as General Counsel for Oracle, you supported the company and its board in over 45 acquisitions.
What skills and leadership qualities saw you through this process?

As a general counsel, your substantive legal responsibilities are so broad that it is seemingly impossible to be an expert in all the legal issues faced by the company. That is why it is so important to have a strong in-house team and a complement of outside law firms who are able to lend specialised expertise to partner with your in-house team.
Fortunately, my own area of practice as an outside lawyer prior to joining Oracle had been in mergers and acquisitions and general corporate and securities work.

So, when our CEO unexpectedly announced to the IT industry in 2002 that it was about to enter a period of massive consolidation, I rolled up my sleeves, engaged a first-rate acquisition team of lawyers and prepared for the onslaught. It was a thrilling, indeed exhilarating, period of time for me professionally. The skills most called for during this period of time were project management skills and budgeting skills, that is, the ability to accurately project and manage the corporation’s legal spend. Also, because our lawyers around the world were working intensively, to the point of exhaustion, on all aspects of the acquisitions, I and my legal management team needed to address professional development, compensation and morale issues.

“The stature and importance of the general counsel role within the corporation as well as externally has risen dramatically in recent years.”

Q: As technology continues to evolve rapidly and becomes embedded in every organisation, what do you believe are the most pressing legal concerns related to firms’ use of technology?

As traditional businesses incorporate new technologies, their initial areas of legal focus pertain to the ownership and protection of their intellectual property. Then, as these issues are addressed and the companies become more comfortable with the introduction and use of new IT products and services, regulatory and legal strategy issues become more prominent. For example, privacy and cyber security risks, transborder transmission of data challenges, diverse and often conflicting regulatory regimes, and competition and antitrust issues are major concerns and may limit a corporation’s ability to freely utilise and exploit their technology.

To better organise their response to such issues, many companies have found it helpful to create a separate program office for intellectual property management and strategy development, all with the realisation that intellectual property can be among the most important assets of the corporation and that the corporation’s ability to exploit its IP successfully can be an important determinant of its success.

Q: While working for global law firms, you have drawn upon your in-house experience to help law firms understand the speed, urgency and virtual operations of their clients. What are the biggest differences you have observed between Biglaw and corporate culture? How have you helped law firms to address the culture divide?

Let me say first that I love working in and with law firms. They are very special environments — a hotbed of ideas, intellectual puzzles, legal theories, strategies and personalities. However, having gone back and forth between the in-house world and the law firm world, I do believe that there is one important disconnect between the two worlds: that is the turnaround speed when working in a law firm versus working in-house. In-house counsel labour in a world where the business client often calls seeking legal guidance with only a few minutes available for the response. The lawyer’s unavailability or inability to respond can mean that the decision maker goes forward without any legal guidance. The timeframe, then, for responding to questions from the client is measured in minutes not hours, days or weeks.

Therefore, when an in-house lawyer in such an environment calls an outside lawyer to seek advice, the deadline for response can be very, very short. Outside counsel typically work at a more deliberate pace, allowing careful reflection. A conflict can arise when the outside counsel, confronted with one of these admittedly unreasonable deadlines, is not comfortable providing a snap judgement or feels “jerked around” by the in-house lawyers by the setting of seemingly ridiculously short deadlines. For the law firm the key is to establish a clear understanding with the client that the certain opinions rendered by outside counsel in these circumstances are the lawyer’s “best guess” and rendered at, say, the 75% level of confidence, as opposed to the law firm’s typically more polished and thorough opinion that would take longer but will result in a much higher level of confidence.

An accommodation of this sort, acknowledging the trade off between rapid turnaround and higher levels of confidence in response, can help ease the pressures on both in-house and outside counsel. As a general counsel I looked for outside counsel who were experts in their field, communicative, practical, cost conscious, dependable, knowledgeable about the client’s business and industry, and willing to work collaboratively with the in-house staff. On this latter point of collaboration, I would note that having some experience working with in-house departments from the inside is particularly helpful. As a partner in private practice, I routinely sought out opportunities to place my associate lawyers in my clients’ legal departments for short periods of time in order to give the younger lawyers some exposure and appreciation for the rapid-fire fashion in which legal questions are presented and responses expected.

“It is so importance to have a strong in-house team and a complement of outside law firms who are able to lend specialised expertise to partner with your in-house team.”

Q: At Stanford Law School you have taught a course called “The Role of the Modern General Counsel”. In your opinion, how is the role of the general counsel changing and how is the profession responding?

Over the last several decades the role of the general counsel has changed dramatically. First of all, the general counsel today often has responsibilities that range far beyond the practice of law, extending into areas such as regulatory strategy, government affairs, risk management, corporate governance, crisis management and business strategy.

The general counsel is typically a member of the corporation’s management team and is a full participant in discussions about business strategy, enterprise risk and public policy. Moreover, in many companies the general counsel has taken on additional management roles, such as corporate security, real estate, tax, public affairs and community relations, and compliance.

So, the stature and importance of the general counsel role within the corporation as well as externally has risen dramatically in recent years. Another major change in the role is the general counsel’s expanded responsibility for managing the corporation’s legal spend. Pricing power and matter management has now shifted away from law firms, the providers of legal services, to in-house departments, the consumers of these services. As the cost of outside law firms has skyrocketed, CEOs have demanded that their general counsel, like other business leaders in the corporation, must manage the legal department like a business, preparing budgets, controlling expenses and implementing project management systems.

The result is that the general counsel and the in-house team have become gatekeepers with stronger controls over monies spent. General counsel will often concentrate work among a group of “preferred” law firms selected competitively, and will negotiate the fees with the assistance of the corporation’s purchasing department, and will hold each firm accountable for working within preapproved budgets. Corporate legal departments have increased their staffing considerably, so that today’s in-house department is often capable of handling the most important projects for the corporation. Moreover, in an effort to further reduce the spend on outside law firms, many in-house departments have segmented major projects into discrete pieces that often can be capably handled by paraprofessionals or separate service providers (e.g., contract lawyers, document review, e-discovery).

The legal profession is gradually adjusting to this new environment. Law schools are putting much more emphasis on experiential learning and internships, with the goal of providing “practice ready” lawyers to employers. Law firms are organising their teams along industry lines, seeking to develop specialised knowledge and deep familiarity with each industry segment in which they practice. Finally, law firms have become open and transparent in collaborating with their in-house clients to design innovative approaches to billing and budgeting, and have become more receptive to working with third party providers of ancillary services.

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