Breaking new ground

The GE legal team has grown from a single lawyer in Asia to about 160 today in our in-house team.  My role over the last few years has focused on organisation building and working on novel legal issues with the team.  How to deal with public policy issues in China, or compliance with state secret laws would be good examples of these.
Over the last six months GE has reorganised to emphasise emerging markets even more.  Our vice chairman, John Rice, has moved to Hong Kong and will be leading the company’s international efforts from here.  A member of our Asian Legal Team, Geoff Culbert, will be moving to Hong Kong to lead the international legal operations of the company.  So the opportunities for lawyers in Asia at GE continue to expand.

I’ll be retiring from GE early next year after 35 years with the company.  So my focus right now is to help with the transition to our new structure.  I plan to stay in Asia after I leave GE so I’m not saying goodbye to any of my friends here.

AMC: What is the current composition of your in-house team?
SM: We have a sizeable legal team in the larger countries – over 40 in China and over 25 in Japan, Australia and India.  Our other lawyers are scattered across Southeast Asia, Korea, New Zealand and other countries. Lawyers are generally either assigned to work directly supporting business teams – aviation, oil and gas, energy, GE Capital, etc., or to work for the corporate function which provides support across the business. 
The larger countries have a country general Counsel who supports all of the business counsel and provides oversight for legal matters across the business in that country.  The country counsel is also expected to build the legal organisation in the country from training to teamwork to better legal tools.

AMC: What is the nature of the relationship between GE’s in-house function and the business?
SM: Lawyers are very much a part of the business team at GE, from sitting in on management meetings and participating actively in negotiations. This is why most lawyers are embedded with the businesses. However, there is a clear recognition that the legal function, like finance, has an important governance function as well.  So every lawyer has a reporting channel into the legal function, although many also report into a business manager.

AMC: What are the biggest obstacles faced in your role, and on a broader level by your in-house team?
SM: I find that the biggest obstacles are generally the biggest opportunities.  They are obstacles because they are not easy to do, but they are opportunities to break new ground where everyone else is avoiding them precisely because they aren’t easy to do.  A few years ago, virtually no in-house operations worked on public policy issues in China.  The view was that China was just too opaque and uninterested in the views of MNC’s.  But when we studied the legislative system we found that it was remarkably open and that policymakers were eager for responsible and transparent advice on how to draft better regulations that accomplished national goals in a way that imposed minimal burden on investors.  We’re very proud of the constructive comments we have made in shaping regulations ranging from bankruptcy and antitrust law to energy and national indigenous innovation polices.  Now we see lots of activity in this area.

Another example is developing legal talent in China.  There is no shortage of talent in China.  The bottleneck is that lack of opportunities for new lawyers to get the business/legal experience to begin to build their careers.  We began our legal intern program as a corporate social responsibility process to give two or three law students an opportunity to get some basic experience in corporate law practice. 

AMC: What qualities does GE look for in external counsel? Are there any criteria followed in choosing suitable practitioners?
SM: The minimum expectations are pretty straightforward.  We want firms who do the work on time, on budget and to a high standard. But it’s a little like applying to top law schools – there are more qualified firms than there are opportunities to work for us. So here are the special qualities that we look for:
Insight – The ability to look at legal problems in a more creative way, to be able to think “outside of the box”. Can the firm bring additional value to the project through business, structuring or tax insights that further improve the project?

Judgment and perspective – The ability to identify, evaluate and intelligently advise on the mitigation of risks, especially those which are non-obvious.

Diversity – We believe that one of the best ways to identify risk and opportunities is to ensure that the team is as diverse as possible.  We see what we are trained to see and people who come from a great variety of backgrounds are more likely to see things that a team of very similar individuals may not spot.

Teamwork – With complicated and diverse teams, interpersonal skills and good team players are essential

Positive thinking– Teams formed to execute on difficult projects, whether in the M&A field or in litigation, inevitably go through difficult periods. Counsel who energize and inspire the team are highly valued.  We all prefer to work with advisors who are positive and fun to be around.

Momentum – Firms are rarely in a stable state. They are either moving up or moving down in the rankings of outside advisors.  Firms with momentum enjoy a considerable advantage.

AMC: When hiring for your in-house team, which candidate qualities would be of most value?
SM: Generally we would be looking at lawyers with at least five years of relevant experience in good law firms or corporations and often an LLM from outside their home country.

One important quality is biculturalism, or today often multiculturalism.  When you work in a multinational organisation it is critical to be able not only to interpret the law for your clients, but also often the cultural context in which business is conducted today.

Other important traits are the ability to communicate well, to present your ideas effectively and succinctly. I often ask candidates whether they would consider a job in sales – because in many ways legal practice is the ultimate sales job.  All you have to sell is a license to practice law and your ideas.  Your success in selling those ideas will have a large role in determining your success in this profession.

AMC