Canadian Lawyer InHouse

JULY/AUGUST 2019 16 INHOUSE proverbial handicap carries with them for a long time. Law firms After graduating from Georgetown law school, Chris Sacca did a brief stint at Fenwick & West LLP in San Francisco. He eventually landed at Google and later created one of the most successful VC funds with Lowercase Capital, with early seed investments in Uber, Instagram and Twitter. When I spoke to Sacca, he discussed his early law firm days and told me, "New, creative, unconventional approach- es to things are not particularly relished in law firms." This stays with you. We are quickly taught "the model" and then stick to the model, as it works well. "Most law firm cultures are built around a strong bias to risk aversion, essentially highlighting each risk and decrying each as a block to feasibility," said Sacca. "As an entrepreneur, we encounter risk at every turn. Yet, the distinction is that we must weigh the relative likelihood of a bad out- come and the cost of the eventuality and use that analysis to make a decision. It's about seeing everything through a lens tinted 'no' and transitioning to a world view that starts with 'yes,' even if the next question is, 'how?'" Many GCs have seen this in dealing with a very rigid external counsel who will be fixated on details that are part of an inter- nal checklist they follow almost religiously, which can create an obstacle in moving the deal forward. This is not by accident and is ingrained in our early years as a lawyer. The transition Recently, I completed an industry test given to new mergers and acquistions hires for their competency in our specific verti- cal and scored very well. When an M & A associate wondered how I knew all this, my reply was simple — because I listen, ask questions and make sure I understand the sensitive business issues to better serve the company. This skill does not come naturally to many, and when we first transi- tion into an in-house role, many of us will attached to the reason why lawyers are hired in the first place, as gatekeepers. The reason may also include lawyers themselves. In the last 10 years, I have worked for a technology-focused investment company that has built, sold and acquired more than 50 businesses. Over time, I realized that by working alongside the business people, a general counsel has a mix of a unique skillset and opportunity to climb the ranks, but overcoming the preconceived notion attached to lawyers and our own pedigree is often difficult to overcome. It is important to take a look at the various stages of a lawyer's background to understand why this is the situation. Law school Law school in general focuses on the down- side of particular actions, while entrepre- neurs will focus on the upsides for a busi- ness from risk taking. One of the most successful lawyers to make the jump is Frank Blake, former chief executive officer of Home Depot, who rightfully stated that "law school trains you to worry about things that no nor- mal human being would worry about." While that type of mindset may help in certain situations, as an entrepreneur, it also creates complexity and ambiguity for problems that need to be solved. It is a way of thinking that is not easy to detach from, which could be one reason for holding lawyers back. While law school does instill valuable qualities such as the ability to process overwhelming amounts of information and build a narrative, most schools fall short when it comes to exposing future lawyers to basic financial information. For many in the corporate world or those serving as general counsel, this can be a valuable asset. This lack of training often leads to law- yers avoiding "numbers" and the financial side of the business, instead being pigeon- holed in their role as gatekeeper. This becomes obvious in organizations, and this FRANK BLAKE: Home Depot, 2006 to 2014 Former lawyer and GC Frank Blake led Home Depot to its most successful period from 2006 to 2014. Blake entered at a time when Home Depot was facing a slowing economy, its struggling stock price and company morale at an all-time low. He turned the company around with what is described as a slow and methodical climb exercising discipline. In the end, the company's total shareholder return, including dividend reinvestment, exceeded 150 per cent during his tenure. CALIN ROVINESCU: Air Canada, 2009 to present Calin Rovinescu was former managing partner of Stikeman Elliott who took the helm at Air Canada after the global recession, with serious liquidity issues due to a $2.9-billion pension deficit position. Much like Blake, through hard decisions — including union negotiations — he turned the company around. Air Canada's finances have since been tightened, the pension deficit was in surplus and a lower-cost vacation airline, Rouge, was successfully launched. Rovinescu, much like Blake, is also noted for re-engineering the culture at the company. BRIAN MOYNIHAN: CEO and chairman of Bank of America, 2010 to present Much like Blake and Rovinescu, Brian Moynihan was promoted to CEO at a tumultuous time when appointing a lawyer who lacked operational expertise to rescue one of the largest finan- cial institutions in America was met with much skepticism. Sticking to a disciplined playbook dubbed a "back-to-basic strategy" under Moynihan, Bank of America's revenues have increased by US$8.3 billion or 10 per cent, at a rate of 3.2 per cent a year, while shrinking its cost base by US$4.3 billion over the past three years or 2.4 per cent a year. TURNAROUND SPECIALISTS The following are examples of some high-profile attorneys turned CEOs with similar track records during their tenure in what can be labelled "turnaround specialists" for their respective companies.

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