Focus On; Law Department managers – Hayward D. Fisk : A Model of Leadership and Involvement

Editor: Why did you decide to become a business lawyer and how did you come to be general counsel of Computer Sciences Corporation?

Fisk: I grew up in the Midwest, in central Kansas in a town called Salina. I have always had an interest in business. My grandfather owned local John Deere and Hudson automobile dealerships and my dad built a successful oil business there. He was a war hero and held the record for the most number of trips over the hump during World War II. I wanted to follow in his footsteps and had a final appointment to the Air Force Academy, but my eyes were not good enough to be a pilot. So, I elected to go on to business school and law school. With my family background, getting into corporate law was natural for me. After graduating with my first law degree, I went to work for Sprint Corporation, the largest corporation headquartered in Kansas City. When I left Sprint 21 years later, I was vice-president and associate general counsel, the number two lawyer in a 100-lawyer law department. I ran Sprint’s Washington office for seven years – during the very dynamic days of the breakup of the Bell System and the AT&T consent decree. As a result of my experience with Sprint and now with CSC for the past ten years, I have come to appreciate that we general counsel are the last of the general practitioners in an age of specialization. You have to be sensitive to issues in a wide range of legal specialties in order properly to represent your client’s interests.

Editor: Would you tell us about CSC’s business?

Fisk: It was formed in 1959 and became one of the largest providers of services to the government, and, today, to the global commercial sector as well. It provides a variety of services, including information technology outsourcing consulting, advanced software development and systems integration. CSC’s business today is just over 20% federal government business and nearly 80% commercial. It operates in all fifty states, along with Europe, Scandinavia, Australia, and the Far East. (We have four lawyers in Australia and roughly a dozen in Europe/Scandinavia.) CSC’s annual sales are over $ 7 billion. We are one of the three largest nongovernment employers in the DC area.

Editor: Does the nature of CSC’s business affect your law department’s focus?

Fisk: Yes, government contracts law is important. Also, we have to be vigilant and proactive to protect CSC’s intellectual property rights in software, proprietary methodologies and services. Therefore, intellectual property law is an important area of practice for us. However, we also cover a broad range of other practice areas.

Editor: What is your relationship with CSC’s board of directors?

Fisk: I am corporate secretary as well as vice president and general counsel. Periodically, I make comprehensive presentations to the board on contingent liabilities, legal activities, and ongoing litigation.

Editor: Are there issues of particular interest to the board?

Fisk: Year 2000 preparedness is a relatively new issue that has become important to the board in recent years. Our directors want to be sure that we are ready both with respect to our internal systems and our obligations externally to customers.

Editor: What about the organization of your department?

Fisk: There are about forty lawyers in the department, but only four in the corporate headquarters in El Segundo, CA. My philosophy is to locate lawyers where the action is. I want capable counsel in the field – with our marketing people, our operations people – out where they can deal with the sparks of a legal problem before it becomes a fire. Therefore, we have lawyers all over, not only in the U.S. but also in Australia, Europe, and Scandinavia.

Editor: Isn’t communications a problem when the lawyers are so widely dispersed?

Fisk: We have a biennial legal conference where all of our lawyers meet together and bond, synergize, and educate each other. I try to run the department so that I can draw from knowledge and resources from any area to help in other areas. That seems to work well. There may be mini conferences of smaller groups in the off years.

Editor: Does technology help in the communication process? As a hi-tech company, you must be in the forefront of the use of technology for this and other purposes.

Fisk: Yes, we have a full time computer scientist in our law department who maintains what we call CLIPS, our computerized legal information processing system. It is a Lotus Notes and Windows NT based system that has important bells and whistles. It enables us to communicate very effectively as well as to manage and track litigation. Each of our lawyers can access our information processing system and databases from remote locations as well. This enables them to work as effectively at our overseas locations, at home or while traveling as they would in the office. We supply docking stations with each PC creating what in effect is a highly portable pullout notebook. Our databases are inclusive, having been built up from electronically generated data as well as through an effective optical scanning system. Some days I receive as many as fifty e-mails, not just from our inhouse and outside lawyers, but also from management personnel.

Editor: Has your department gone through a downsizing process?

Fisk: Staff reductions have not been needed since we have had to meet the expanding demands of a rapidly growing company. However, we have been careful not to overstaff. There is a commonly accepted rule of thumb of one lawyer for every $ 100 million of revenues. At that rate, we should have over seventy lawyers rather than our present contingency of just over forty. This suggests that we are not only working hard, but also working smart.

Editor: You must have some really great people. How do you attract and retain such a high quality staff?

Fisk: I am very proud of the quality of our legal staff. I would most want to be remembered professionally for the quality of the legal staff built in the ten plus years that I have been general counsel. We have lawyers on our staff who have five degrees, a Rhodes scholar and one who speaks as many as seven languages proficiently. We motivate by providing a reasonable amount of autonomy with interesting work, competitive compensation, and give them respect and recognition as earned and deserved.

Editor: Do you use outside counsel extensively?

Fisk: Our outside counsel billings, which tend to be primarily litigation related, are lower than the relative norm. We have been able to operate within a tight budget for both inside and outside counsel in large part because the high quality of management throughout our organization helps us avoid counterproductive legal problems in the first place. Some of it is education and experience and much of it is just having quality people of integrity to work with.

Editor: Have you reduced the number of outside law firms?

Fisk: This is really difficult to do when you are doing business in every state in the nation along with many foreign countries. You need law firms that you can draw upon and sometimes conflicts arise. I believe in stimulating competition among law firms. Where we do a significant amount of business with a firm, I ask for a discount against their standard billing rates. It is a reasonable discount, because if the discount is excessive, you encourage padding of hours. The firms realize that in exchange for the discount, they may get more of our business if they do a good job. They realize that they are in a competitive environment, that sometimes we will have two to four firms competing for certain litigation and large transactional work, including some multibillion dollar deals. They also know that we have the ability to do very large deals without going outside.

Editor: Do you use a survey to test client satisfaction with the law department?

Fisk: Personally, I do not think that they are productive. However, I do think that you need some way to get feedback on how your people are doing. I am in constant communication with our management "clients" and often ask how our lawyers are doing. When I find an unfavorable reaction, which is seldom, I try to get to the bottom of it quickly. I pass the many favorable comments received along to our deserving legal staff.

Editor: How do you feel about ADR?

Fisk: I ask our people to consider whether ADR would be useful at the outset of every case or transaction. Its use really depends on the nature of the case or transaction. If discovery is very important to our client, we are probably better off in court.

Editor: I assume that you manage to live within a budget?

Fisk: Years ago Nicholas Katzenbach when he was general counsel of IBM quipped that his CEO noted that the IBM law department had an unlimited budget but still managed to exceed it. It is difficult to judge what cases will cost and how involved they will be. Yet, most years I manage, and I think most Fortune 500 general counsels manage, to come within a few percentage points of their respective budgets for the year.

Editor: How do you avoid having costs get out of hand?

Fisk: There are many facets to controlling litigation and other legal costs. One which I have found to be effective in certain cases is to require outside counsel to provide a running bill that shows not just what the month’s bill has been, but also the amounts for previous months. You can look at it and immediately see if costs are getting out of hand. The law firm is aware of this as well and tends to be more careful and conservative in billing if costs are mounting.

Editor: If you look at everything that is facing corporate counsel today, where would you put reforming the civil justice system?

Fisk: Litigation has become egregiously expensive. Costs are not always apparent. Most companies don’t have a good handle on the total. You have to consider insurance premiums and the costs of judgments and settlements as well as actual litigation costs, direct and indirect, including time spent by inhouse and management personnel. Ultimately, these costs are buried in the price of services and merchandise. So, the hidden social cost is immense. Our civil justice system is in a strained state resulting from the development of a cadre of class action lawyer entrepreneurs dedicated to their self interests of becoming very rich rather than serving the best interests of clients and our society in a broad sense.

Editor: What do you see as the most important future problem to be faced by corporations and their lawyers?

Fisk: I just spoke this past January at the Comnet Convention in the District of Columbia on year 2000 issues. We have about 500 employees dedicated to meeting our responsibilities for our internal and customer systems. Recently enacted federal legislation provides some protection against unwarranted litigation, but executive judgment and restraint surely will be needed. It is already too late for many companies to convert or repair long tenured noncompliant systems that often are a derivative of long ago conscious cost control initiatives, rather than some misfeasance or nonfeasance on the part of either the recipient or the provider. Also, there may be a domino effect with plaintiffs’ lawyers suing everybody in sight. Prognosticators have estimated that the cost of litigation for year 2000 issues may be as high as a trillion dollars, which is above and beyond the three to six hundred billion estimated for year 2000 fixes. That dwarfs asbestos litigation, breast implant litigation, and all of the major tort litigations aggregated.

Editor: I know you have been very active in the American Corporate Counsel Association as well as a number of other organizations. First tell us a little about your involvement with ACCA?

Fisk: This year, I am president of ACCA’s Southern California chapter, which has about 500 members. We hope to be in contention for the national ACCA best chapter award again this year. We are doing some exciting things like sponsoring a Technology and the Law program with UCLA Law School – an all day annual program, scheduled for this fall. Insights will be presented on a wide variety of subjects within the law and technology rubric from both the academic perspective and the more pragmatic perspective of those of us who practice where the rubber meets the road. It is useful to bring those two disciplines together. Our attendance was nearly 100 last year, our third year, and is expected to grow considerably in the ensuing years. Earlier this year our Southern California ACCA Chapter presented a stimulating panel discussion, before nearly 700 attendees, involving former White House counsel – Fred Fielding (Nixon), C. Boyden Gray (Bush), Jane Sherburne (Reagan), and Peter Wallison (Clinton).

Editor: You are also involved in organizations that play a significant role in shaping the legal climate. Could you tell us about your involvement in the National Legal Center for the Public Interest?

Fisk: It does a terrific job of educating policy makers about major issues. For example, the NLCPI just published a monograph on Year 2000 issues which is first rate. It has the ability to pick up emerging issues at an early stage and then let key people know what’s at stake in its timely monographs and white papers. This is an effective way of heading off policy disasters. Its annual meeting with the Department of Justice is one of the year’s highlights for general counsel. The Attorney General as well as the other major players in the Department attend and talk frankly about the major issues. I am proud to be a member of the NLCPI’s Legal Advisory Council.

Editor: You have also been active in the Atlantic Legal Foundation.

Fisk: I serve as chairman of the Foundation. It has been a trailblazer in combating the use of junk science in the courts. It filed amicus briefs in the landmark Daubert case and later cases which impose more rigorous standards on the admissibility of scientific evidence. The Foundation’s briefs in cases involving science carry immense authority because it has the unique advantage of representing and being advised by a group of distinguished independent scientists, including a number of Nobel Laureates. The Foundation’s efforts have not been limited to countering junk science. It has intervened in numerous cases involving important principles affecting the business community and broader traditional American values. It has done an admirable job of identifying cases moving up through the judicial system which could create very bad law and then taking action at a sufficiently early time to avoid painful damage to American jurisprudence.

Editor: What is the most important change that has taken place in your practice?

Fisk: I think the biggest challenge facing law departments today are the overwhelming work demands. I regularly put in 12 hour days in the office and often take work home with me as do most of the lawyers in our Department. Hiring more lawyers, incidentally, does not entirely alleviate demands on a general counsel’s time. There are many issues that require and deserve his or her attention.

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