In an increasingly regulated and litigious age, the number of hot-button issues that in-house lawyers are facing are also increasing. And the in-house legal function seems to grow in importance exponentially by taking on new duties every month or so.
Cyber-security, risk management & compliance, different privacy regimes internationally, changing and challenging human resource issues — these are all on the CV of most corporate counsel today.
The legal departments of U.S.-based multinationals, in particular, have had to grow — both in headcount and international expertise. To see how one company is managing it, we recently spoke to Gianluca Liotta, General Counsel of 3M Co. in Western Europe. His department is often touted for its diversity and innovation, with the company’s overall general counsel, Ivan Fong, regularly having to make room on his awards shelf for yet another statuette. Fong, perhaps weary of reporters’ entreaties for interviews, suggested that we chat with Liotta, who recently was promoted from general counsel of his native Italy to the entire Western Europe region, which comprises the Iberian Peninsula, France, Germany, the Benelux countries, Germany, and Italy — 3M’s main European markets.
“At 3M I usually sleep well — that’s why I have been working with such a great company for many years. But you need always to keep the bar high to avoid the big mistakes — those breakdowns that affect the company’s reputation.”
Liotta oversees a department of 35 lawyers, paralegals and staff. Many multinationals have been experimenting with how to organize their legal operations abroad. Do they do it geographically? Or do they try to leverage expertise across regions? 3M uses a hybrid approach, says Liotta. “We have geographical coverage, having sizeable departments in bigger countries. We do have some subject matter experts, what we call practice groups, trying to share legal knowledge across the area. Still, a lot of activities are managed at the local level, driven by the geography,” he says.
Another vexing issue for a lot of multinationals is compliance. There’s a debate among many in-house thought leaders and compliance experts over where to place the increasingly important compliance function. Does it belong in Legal? Or should it be off in its own silo, answerable only to the board? 3M comes down on the side of putting it under Legal’s umbrella. Why? Liotta explains that his department’s primary mission is to avoid “meaningful” legal exposure, and accomplishing that takes education and oversight. Echoing former General Electric Co. general counsel Ben Heineman, Liotta maintains that “We’re the guardians of the operation.”
To be a guardian at 3M, Liotta adds, involves a special set of skills. In-house lawyers, he says, are very different from their private practice counterparts. Indeed, some law schools in the U.S. are finally recognizing this and coming up with classes tailored for students who might be considering a legal department career.
“I don’t want to generalize, but sometimes I think outside counsel are working too much on their own, just on the billing aspects,” Liotta says. “There’s a huge difference amongst senior outside counsel. They’re still trying to win, and gain their own clients. It’s a different mentality a different attitude.” Plus, in-house lawyers, if they’re serious about their careers, will develop business skills that outside counsel don’t necessarily need, he adds.
Liotta also has his take on when and how to hire outside counsel. “Our brief is to avoid as much as we can in terms of spending on outside counsel,” he explains. “We try to prevent meaningful issues from occurring.” But on the rare occasions, he says he does hire outside help. “We use a network that has been blessed by the U.S. but is international. But we also have discretion on using firms that can better serve our needs.”
Finally, we asked Liotta if there are any issues that keep him up at night. He’s pretty sanguine, given his position. “At 3M I usually sleep well — that’s why I have been working with such a great company for many years” he notes. “But you need always to keep the bar high to avoid the big mistakes — those breakdowns that affect the company’s reputation.” He also says it’s important to be “giving everyone consistent messages of high-performance fused with high integrity, at all levels, in all circumstances.”