Capatides, who runs CIBC's legal and compliance group worldwide, is part of the management team. He is also part of an evolving group of corporate counsel who are redefining the role within Corporate Canada's power structure and transforming the role of law departments from a support or service role to that of a strategic business advisor.
This reflects an important development for law departments across Canada. Rightly or wrongly, corporate counsel have historically been seen by many law firms as second-tier in-house legal advisors, good enough for the daily grind, but not the big deals. In the past, first-tier issues regularly went to external counsel from the top transactional law firms.
"When I made the move to CIBC, 80 per cent of the people said to me, 'Oh, do you want to work fewer hours?'" recalls Jackie Moss, Canadian general counsel and senior vice-president at CIBC, a role for which she was recruited from the mergers and acquisition group at Blake, Cassels & Graydon LLP in Toronto. But Capatides recruited Moss because she was considered one of the go-getters at Blakes, and he specifically needed someone who would be able to hit the ground running. And Moss made the move because the philosophy regarding the role of corporate counsel espoused by Capatides and CIBC meant that she would be in on deals from the get-go-much earlier than was possible in her earlier incarnation as a partner at Blakes.
Capatides and Moss illustrate the evolution of corporate counsel from pure service provider-on par with other central service departments such as human resources, accounting and IT-to an integral and respected part of the management team. Is their experience typical of a larger trend, or is it anomalous? Catalyst Consulting researched this question through a series of interviews with the leadership of 23 Canadian law departments (see Table 1) earlier this year. The survey results form the basis of this article.
TWO SOLITUDES
Ever since companies started recruiting in-house counsel, the profession has split into the two solitudes. "In Canada, lots of corporate counsel did the day-to-day work, but if a pressing strategic issue arose, the company would call in someone like Jim Baillie at Torys," says CIBC's Jackie Moss. Such practices affected external counsel's perception of their in-house colleagues and perpetuated the idea that going in-house was the career track for those who couldn't deal with the demands of a top-tier private practice. Today, things are changing. Notes Moss, "As [external lawyers] see corporate counsel who are good and smart and work through the night to get the deal done, their perceptions change."
Those private practitioners who still think that the law firm is the sweatshop where the real work is done, while the in-house legal department is where you go if you want to work less, stress less and take weekends off, are in for a rude awakening. This is particularly the case if they come to work with a general counsel like Moss, Alcan's David McAusland, or BCE's Martine Turcotte.
"External counsel have to understand they are there to support us, and we have to understand that they bring in a wealth of experience that we may not have," explains Turcotte. But, even though the atmosphere is clearly collaborative, it's the internal team that is unequivocally responsible for negotiating the deal. "It's something I insist on," says Turcotte, "because we're the ones who have to live with the deal."
"Some of our external lawyers are not put off, but surprised," says Moss. "They're unsure in their heads as to who is running the deal-are they or are we?" The confusion is not surprising. To work effectively, the external and in-house counsel have to work hand-in-glove. As Hugh MacKinnon, managing partner of Bennett Jones LLP's Toronto office points out: "Some of our best long-term working relationships are ones in which we're effectively integrated with the law department-the law firm is an extension of the law department." This approach works for the in-house counsel they work with because, as MacKinnon explains, Bennett Jones's lawyers recognize that the in-house people "are frequently the leading experts in the area particular to their enterprise." And who is calling the plays? It depends on the general counsel, but if a firm is working with CIBC, there is no doubt about the answer. "We are," says Moss.
Stikeman Elliott's Ed Waitzer, who acted for CIBC in its recent acquisition of various assets from Merrill Lynch, agrees. "A lot of manpower came from Stikemans, and I managed that, but Jackie [Moss] and Mike [Capatides] clearly led the transaction."
The tension between the two solitudes has been dissipating partly because, says Robert Jones, a former general counsel at Eatons: "There has been a significant change in the working relationship between general counsel and the law firm. General counsel has become the client, not the company. That has done a lot to improve the working relationship, both ways."
The mobility within the profession has helped too. It's possible that MacKinnon sees in-house counsel as "vital" and "expert" because he once spent nine months in-house at the Royal Bank of Canada, on secondment from his firm. "A lot of people are going back and forth [between industry and private practice] and that increases understanding," says Richard Bailey at Kraft. And that means that most private practitioners today-even those working at top-tier transactional practices-would echo the assertion of one external lawyer that today's corporate counsel "are of much higher quality, as good as lawyers at law firms. It's becoming a viable career path-and not just for lifestyle."
The survey findings, while not necessarily representative of the state of every law department across Canada, suggest that the contribution of corporate counsel has changed significantly over the last five years. Corporate counsel positions have become a viable alternative career track for the ambitious and the talented. What has driven this development is the internationalization of business, and the need for an effective cross-border counsel like Capatides and his department to know everything that's going on, strategically, in the company. If a company wants to be a player in the Brave New Borderless World, it needs a general counsel who's a strategic thinker, in on the ground floor of every deal and strategy. And, increasingly, companies are willing to make the necessary financial investment to get these top people. The high calibre of these general counsel is redefining the role of legal departments in Canada.
| TABLE 1: LAW DEPARTMENTS SURVEYED | |
|---|---|
| Company | General Counsel |
| Alcan Inc. | David McAusland |
| BCE Inc. | Martine Turcotte |
| BC Hydro | Ray Aldeguer |
| Bell Canada | Richard Mannion |
| CBC | Pierre Nollet |
| Cell-Loc Inc. | Rob Van Walleghem |
| CIBC | Michael Capatides |
| Cognos Inc. | John Jussup |
| CP Rail | Marcella Szel |
| DuPont Canada | Seymour Trachimovsky |
| EDC | Gilles Ross |
| ENMAX | Lynn Meyer |
| Fairmont Hotels | Terence Badour |
| IBM Canada | Jay Safer |
| ICBC | Shelley Milne |
| Kraft Canada | Richard Bailey |
| Labatt | James West |
| MOSAID | James Skippen |
| Potash Corp. | John Hampton |
| Procter & Gamble | Eric Glass |
| TransCanada | Al Bellstedt |
| Weyerhaeuser | Alex Shorten |
| Zarlink | Don McIntyre |
SO, HOW HARD DO THEY WORK?
The Catalyst survey selected larger law departments. American Corporate Counsel Association and Canadian Corporate Counsel Association data suggest that 60 per cent of non-government law departments have only one or two lawyers. This is not our sampling for this study. In the Catalyst sample, they range from one (Cell-Loc) to 65 (Insurance Corporation of British Columbia), with a mean size of 15 (see Table 2-reported numbers represent only those members of the departments located in Canada).
| TABLE 2: DEPARTMENT PROFILES AND AVERAGE WORKLOAD | ||||||
|---|---|---|---|---|---|---|
| Number of lawyers | Years of Call | Average Hours | ||||
| (1-4) | (5-10) | (11-15) | (over 15) | |||
| Alcan Inc. | 30 | 8 | 3 | 7 | 12 | N/A |
| BCE Inc. | 9 | 2 | 1 | 1 | 5 | 55 |
| BC Hydro | 10 | 3 | 3 | 1 | 4 | 45 |
| Bell Canada | 37 | 4 | 15 | 8 | 10 | 50 |
| CBC | 18 | 4 | 5 | 2 | 7 | 50 |
| Cell-Loc Inc. | 1 | 1 | 55 | |||
| CIBC | 39 | 5 | 13 | 16 | 5 | 55 |
| Cognos Inc. | 6 | 5 | 1 | 1 | 45 | |
| CP Rail | 12 | 8 | 1 | 3 | 45 | |
| DuPont Canada | 4 | 1 | 2 | 1 | 45 | |
| EDC | 22 | 3 | 3 | 7 | 9 | 45 |
| ENMAX | 9 | 4 | 5 | 50 | ||
| Fairmont Hotels & Resorts | 4 | 2 | 1 | 1 | 50 | |
| IBM Canada | 10 | 3 | 7 | 55 | ||
| ICBC | 65 | 6 | 18 | 25 | 16 | 45 |
| Kraft Canada | 5 | 1 | 1 | 3 | N/A | |
| Labatt | 5 | 1 | 3 | 1 | 45 | |
| MOSAID Technologies | 4 | 3 | 1 | 50 | ||
| Potash Corporation of Saskatchewan | 6 | 1 | 4 | 1 | 50 | |
| Procter & Gamble | 4 | 2 | 1 | 1 | 55 | |
| TransCanada | 29 | 10 | 5 | 5 | 9 | 55 |
| Weyerhaeuser Company Ltd. | 5 | 1 | 1 | 3 | 50 | |
| Zarlink Semiconductor Inc. | 4 | 1 | 3 | 50 | ||
Whether in a small or large department, the in-house members surveyed (including general counsel and their junior team members) reported that they put in a 45- to 55-hour work week. Subsequent interviews suggest most general counsel and their teams put in much longer hours when need be-and the need arises often.
"I'm as much a workaholic as ever," says David McAusland, who was recruited to Alcan Inc. from his position as managing partner at Byers Casgrain in Montreal (now Fraser Milner Casgrain LLP). "I work as much if not more than before." And, in addition to putting in an average work week of 55 hours, Moss and her team at CIBC find themselves frequently burning the midnight oil when there's a deal to be done.
The perception that working at an in-house department is an easier career path is simply wrong, according to those general counsel who see their role as extending beyond legal advisor. But it's a view that is still held by many colleagues at law firms, who understand the career choice of their corporate counsel counterparts mostly in terms of lifestyle. It's even embraced by some corporate counsel themselves. In the United States, Corporate Counsel magazine's Quality of Life Survey (June 2001) reports corporate counsel are "basically content practising law at companies-and that they are much better able to balance work and home than they were while working at law firms."
If lifestyle is the main motivator for pursuing a corporate career path, there are certain companies-many of those featured in the Catalyst survey among them-to which such lawyers need not apply. McAusland is blunt: "Anybody who has that attitude will not be participating in the strategic thinking of the organization." The rise of a new sweatshop? Not at all. Rather, the price of the ticket of admission to the role of decision maker.
REPORTING RELATIONSHIPS
Almost all general counsel in our survey report to a Canadian CEO. One (Procter & Gamble) reports to a North American chief legal officer, while two others (Kraft Canada, Inc. and Weyerhaeuser) have dual reporting, both to the CEO and to the CLO. Many of the general counsel are CLOs themselves. Many wear several hats (see Table 3). Alcan's McAusland is a senior vice-president, responsible for the mergers & acquisition portfolio among others, as well as being the company's CLO. BCE Inc.'s Martine Turcotte is the CLO, but she's also an integral part of the senior management team, and she's in on all the deals from "the germination of the idea." In addition to instructing his team of lawyers, who he sees as "CLOs for specific business units," Kraft Canada's Richard Bailey is a member of the executive team, which maps out the company's strategy. In fact, more than 75 per cent of the general counsel surveyed are members of their company's executive team.
| TABLE 3: OTHER COMPONENTS OF THE PORTFOLIO | |
|---|---|
| Alcan Inc. | M&A, Strategic Affairs |
| BCE Inc. | Corporate Secretariat |
| BC Hydro | Regulatory Affairs, FOI |
| Bell Canada | Corporate Secretariat, Environmental |
| CBC | Corporate Secretariat, Privacy Office, Records Management |
| Cell-Loc Inc. | Government Relations, Human Resources, some financing |
| CIBC | Compliance |
| Cognos Inc. | Secretariat, Stock Options and Stock Purchase Plans |
| CP Rail | Strategy, Corporate Secretariat, Claims- Third-Party and Workers Compensation |
| DuPont Canada | Corporate Secretariat |
| EDC | Corporate Secretariat, Corporate Governance, Security International Relations |
| ENMAX | Corporate Secretariat, Contracts Management, Compliance, Environment |
| Fairmont Hotels & Resorts | Corporate Secretariat, Legal and Shareholder Services for Legacy REIT, Asset Management, Property Tax Administration |
| IBM Canada | Intellectual Property & National Standards |
| ICBC | Corporate Secretariat |
| Kraft Canada | Public Relations, Government Relations, Internal Communications, Special Situation Management |
| Labatt | Intranet Council |
| MOSAID Technologies | Human Resources, Corporate Secretariat, General Strategic Management |
| Potash Corporation | Corporate Secretariat, Pension Board, Offices of Wholly Owned Subsidiaries |
| Procter & Gamble | N/A |
| TransCanada | Internal Audit, Regulatory Affairs and Strategy, Internal Security, Special Projects |
| Weyerhaeuser | Environmental, Corporate Ethics |
| Zarlink | Human Resources, Information Services |
Reporting relationships do not, however, necessarily reflect the lawyers' true contribution to the company. "It doesn't matter who you report to, but what your role is," says Jackie Moss. "The relevant test is how involved are you in the strategic thinking behind the big deals."
And the relevant question, suggests David McAusland, is not are legal counsel involved in the strategic thinking at a company, but should they want and expect to fill a role larger than that of legal advisor. The answer, says McAusland, "depends on who they are."
"You've got to look at people, not functions," he stresses. "You hire a person and build a role around the person." In other words, not every corporate counsel is cut out to advise the CEO on business matters. While the Catalyst survey indicated that many of the respondents had significant strategic roles-at the most extreme end of the spectrum, Labatt's James West spends 75 per cent of his time on strategic matters-these were invariably accompanied by the more traditional roles of gatekeeper and internal law firm (see Table 4). As Richard Bailey explains: "You play two roles, the strategic role and the legal advisor role." After all, if the legal role wasn't important, the company wouldn't need a lawyer to fill it in the first place.
So what does it really come down to? R-E-S-P-E-C-T. Moss sums it up, "If people don't respect the lawyer, they're not going to go to him or her."
| TABLE 4: DISTRIBUTION OF ROLES (BY %) | |||
|---|---|---|---|
| Gatekeeper | Law Firm | Strategic Advisor | |
| Alcan Inc. | 40 | 40 | 20 |
| BCE Inc. | 20 | 40 | 40 |
| BC Hydro | 10 | 70 | 20 |
| Bell Canada | 15 | 25 | 60 |
| CBC | 30 | 50 | 20 |
| Cell-Loc Inc. | 40 | 40 | 20 |
| CIBC | 10 | 60 | 30 |
| Cognos Inc. | 30 | 60 | 10 |
| CP Rail | 15 | 65 | 20 |
| DuPont Canada | 10 | 60 | 30 |
| EDC | 20 | 70 | 10 |
| ENMAX | 10 | 70 | 20 |
| Fairmont Hotels | 30 | 40 | 30 |
| IBM Canada | 10 | 40 | 50 |
| ICBC | 33 | 33 | 33 |
| Kraft Canada | 20 | 50 | 30 |
| Labatt | 10 | 15 | 75 |
| MOSAID | 10 | 80 | 10 |
| Potash Corporation | 20 | 70 | 10 |
| Procter & Gamble | 30 | 50 | 20 |
| TransCanada | 25 | 50 | 25 |
| Weyerhaeuser | 20 | 65 | 15 |
| Zarlink | 5 | 85 | 10 |
SPECIALIZATION VERSUS BUSINESS ALIGNMENT
The complexity and sophistication of legal issues handled in-house has meant that while general counsel have multiple roles, the members of the law department frequently specialize in an area of law, just as they would at a large law firm (Table 5). BCE and ICBC have counsel who specialize in dispute resolution. A good number of companies (BCE, CIBC, CP Rail and Export Development Canada among them) are building up certain high-end capabilities to the point where outside counsel act as co-counsel or only manage overflow. Weyerhaeuser's Alex Shorten is representative of many companies when he says that labour and employment law is one of the fastest-growing fields and areas of responsibility for law departments. And this doesn't factor in lawyers working as human resources specialists-10 to 15 per cent of legal resources are deployed in this area. Consumer-focused companies such as Procter & Gamble are developing capabilities in marketing and advertising law.
| TABLE 5: LEGAL TALENT BY AREA* OF LAW (BY %) | ||||||
|---|---|---|---|---|---|---|
| Regulatory Affairs | Litigation | Transactions | Financing | Labour/ Employment | Other | |
| Alcan Inc. | 20 | 10 | 20 | 40 | ||
| BCE Inc. | 33 | 34 | 33 | |||
| BC Hydro | 25 | 5 | 40 | 13 | 7 | |
| Bell Canada | 15 | 25 | 40 | 20 | ||
| CBC | 5 | 49 | 10 | 26 | 10 | |
| Cell-Loc Inc. | 25 | 20 | 20 | 20 | 15 | 10% IP |
| CIBC | 3 | 10 | 20 | 31 | 8 | 28% Tech & Electronic Banking |
| Cognos Inc. | ||||||
| CP Rail | 30 | 10 | 5 | 5 | 20 | 30% Trademarks |
| DuPont Canada | 15 | 20 | 60 | 5 | ||
| EDC | 1 | 52 | 4 | 40% Insurance 3% IP | ||
| ENMAX | 10 | 5 | 85 | |||
| Fairmont Hotels | 15 | 5 | 40 | 30 | 10 | |
| IBM Canada | ||||||
| ICBC | 8 | 68 | 8 | 16% Governance | ||
| Kraft Canada | 15 | 2 | 20 | 20 | 40% Marketing 3% Other | |
| Labatt | 30 | 10 | 50 | 5 | 5% Other | |
| MOSAID | 5 | 15 | 25 | 45 | 5 | 5% Other |
| Potash Corporation | 22 | 17 | 15 | 34 | 10 | |
| Procter & Gamble | 25 | 10 | 10 | 20 | 35% Advertising | |
| TransCanada | ||||||
| Weyerhaeuser | 15 | 15 | 20 | 30 | 20 | |
| Zarlink | 5 | 20 | 20 | 55 | 5 | 15% IP |
* Some groupings and rounding were required.
Most companies are also growing their transactional capability-having their own teams that can get deals done-although law firms still provide the "extra bodies" needed to complete the big deals.
The trend towards specialization is developing in tandem with something more important: business alignment. Being more than a legal advisor requires law departments to be more than internal law firms, and so the organization of the law department as a closed-system "captive law firm" is giving way to integrating its members with business units. Although only a few companies (CBC, Enmax, IBM, ICBC and TransCanada PipeLines Limited) deploy their Canadian-based lawyers outside the law department proper, the majority from the survey make an effort to connect their in-house lawyers with specific business units. Alcan, CIBC and Bell Canada have the critical mass to organize their departments by area of law, like in a traditional law firm. But they have also set up teams that are aligned with their company's lines of business, as have CBC and EDC. CIBC's lawyers, says Moss, participate in their business unit's weekly meetings, to stay appraised of developments and be aware of larger issues and strategies. Successful relationships with the business lines are key to getting involved with issues at the earliest possible stage. Says EDC's Gilles Ross, "Right now, our relationships with the business lines are especially good and they involve us early."
TransCanada's legal teams reflect the company's two main divisions, with commercial and procurement lawyers assigned to Gas Transmission, and regulatory lawyers to Power Generation. Potash Corporation has teams for each of its Nitrogen, Phosphorus and Potash divisions. MOSAID has teams for the Classification Chip, Systems, and IP divisions. All of DuPont Canada Inc.'s four in-house lawyers are assigned to specific lines of business.
THE HUNT FOR TALENT
If they want to play a larger role in their organization, law departments have to be aggressive players in the war for legal talent. Like law firms, they look for both experienced veterans and young up-and-comers. The must-have quality general counsel look for in new corporate counsel is hybrid: that is, just the right combination of both "solid legal skills and good business skills." That's what Turcotte looks for when she's recruiting for BCE. "Somebody can be an excellent legal technician," she says, but to really help a company like BCE, they have to stretch "beyond legal skills and wear the business hat. The question they have to be able to ask and answer at the end of the day is, 'Do you think this is a good deal-would you put money into it?'"
CIBC's Moss concurs. "The key for our people is to really know the business-that's how they become more useful and become part of the team rather than just being 'the lawyer.'" It was because he had such an attitude that CIBC went after Capatides. "I always loved the law," he says. "However, I wanted to have more business-related aspects in my job." He now has both in abundance.
External and in-house counsel alike agree that the calibre of corporate counsel has increased considerably over the last few years. Says Moss, "I'm able to hire more skilled lawyers who can do anything." Once in-house, lawyers find both their legal and business skills honed. Corporate counsel in legal departments run like Moss's group at CIBC or Turcotte's team at BCE "can do anything" because they are closer to the business side and have more involvement in the initial stages of a deal or project.
How long does it take to learn those business skills? Counsel at most of the companies surveyed by Catalyst suggest that one to two years of company immersion is enough. But several others-notably those at Alcan, Labatt, ICBC, MOSAID and Procter & Gamble-believe there is a correlation between the length of time a lawyer has been with the organization and that lawyer's ability to contribute strategically. IBM's Jay Safer notes four of the lawyers on his 10-member team have more than 20 years with the company and have accumulated a wealth of business experience. It is that seniority and experience that allows them to strategize and negotiate most of IBM's deals.
Keeping these experienced counsel means finding ways to equitably compensate them, and in many companies that's a challenge. ("Why this and not private practice? It's certainly not for the money," quips Kraft's Bailey.) Today's expertise and workloads are not adequately accommodated with variable pay systems and options. More often than not, the corporation's internal equity rules prevent too many lawyers from receiving a "fair share." As Corporate Counsel magazine's Quality of Life Survey suggests, this is a complaint Canadian corporate counsel share with their American counterparts. Yet, given those frustrations, retention among corporate counsel is surprisingly high. In the Catalyst survey, only one-third (eight out of 23) of the companies had lost lawyers in the last two years, and two of those were due to internal promotions or transfers.
The chance to be on the deals from point zero is an effective carrot. But, for a profession where private practice success is associated with significant financial rewards, it is not enough. Stikeman Elliott's Ed Waitzer recalls discussing lawyer salaries with CIBC's CEO John Hunkin when CIBC was going after Capatides. "It took him a while to come to terms with what he'd have to pay for a top New York lawyer," says Waitzer. But come to terms he did-there was no financial sacrifice involved in Capatides leaving his position as managing partner of U.S. legal powerhouse Mayer, Brown & Platt in New York (now Mayer, Brown, Rowe & Maw). CIBC has subsequently applied the same philosophy to the compensation of Moss and other top recruits. Says Capatides, "CIBC made the leap several years ago to bring in lawyers with a competence level equal to that of senior partners at major law firms. To attract and keep them, they made the decision to pay at a competitive level."
Waitzer believes other companies are increasingly demonstrating "willingness to pay market rates for top-tier lawyers." That's helping them recruit a calibre of people who previously would not have entertained abandoning the partner career track. "Ten years ago, there was a tendency to assume that people who went to be corporate counsel did so because they wanted less demanding careers, intellectually and workload-wise. They couldn't make it, or didn't want to make it, in the top-tier transactional practices. You can't say that today." As Capatides puts it, "You have to perform. The expectation is that we perform at a level consistent with the advice given by top partners at top law firms."
Money talks, but if companies want to keep people like Moss and Capatides, they also have to challenge them. "They have to bring them into the managerial side, get them involved in strategic thinking, and offer them greater opportunities," says Waitzer. Fortunately, the complexity of doing business in the Brave New Borderless World means those opportunities are there for the taking-if a company has the necessary vision.
CROSS-BORDER DRIVEN
Capatides splits his time between Toronto and New York. He's fully cross-border and at the forefront of a new trend for in-house counsel. Only nine of the surveyed companies, domestically owned and operating primarily but not exclusively in Canada, reported no international placement of lawyers. The rest boast lawyers globally, with the greatest concentration in the United States. Such a situation further boosts the skill set required by top general counsel. "Trying to cope with the international dimensions of the job and managing international law departments-that's definitely a new challenge," says John Kazanjian, a partner with Osler, Hoskin & Harcourt LLP in Toronto. It's also an aspect of the job poised to grow exponentially.
"We see a tonne of business requiring multi-jurisdictional capabilities, and CIBC's business groups are organized to handle north-south, south-north flow between Canada and the United States," says Capatides. More than 80 per cent of the departments surveyed by Catalyst forecast a significant increase in U.S.-generated business and related legal work within the next two years. Some departments have been integrated in a cross-border sense from the outset (e.g., IBM, Kraft and Procter & Gamble). Nineteen of the 23 counsel (BCE, BC Hydro, Bell Canada, Cell-Loc, CIBC, Cognos Incorporated, CP Rail, Enmax, Fairmont Hotels, Kraft Canada, MOSAID, Potash Corporation, Procter & Gamble, TransCanada and Weyerhaeuser) indicated their company was likely to conduct more business in the U.S. or that they expected to deal with a larger proportion of U.S.-based issues in the next two years. For five others (such as Alcan and Zarlink), growth will be focused outside the North American perimeter.
"Most companies and businesses that are growing will be growing beyond the Canadian border," says Bailey. And that's good news for ambitious corporate counsel. "In-house counsel not only have to be aware of international law, but they have to develop expertise in the cross-border movement of goods and people." The number of counsel who had that expertise 10 or 15 years ago, says Bailey, was minimal. Now it's becoming essential. While in the past general counsel of even the Canadian subsidiary of a multinational focused just on legislation and regulations coming out of Ottawa and the provinces, now "we need to be aware of evolving legislation in foreign jurisdictions and need to get involved in shaping those laws." New York and Washington are as important as Ottawa and the provinces, if not more.
"One of the things CIBC tells its clients is that we have the capability on the business side to handle transactions and clients which cross national borders," says Capatides. And that means CIBC's lawyers, wherever they are, are called upon to provide legal advice that spans Canadian, U.S. and European law. "It's a great job for a lawyer looking to operate at a high level."
The intellectual rewards can be considerable. Law firms working for international clients are likely to be getting not just one transaction, but merely a piece of just one transaction. "And that one transaction is just a piece of the global work," says Robert Jones, general counsel of Eatons until 1989 and founder of the Canadian Corporate Counsel Association. In-house counsel have the opportunity to see the entire picture-and, increasingly, the chance to shape this picture. Also, the responsibility to take out the garbage afterwards. "As general counsel, you can't hide from what you've done," says Kraft's Bailey.
THE GRASS IS NOT ALWAYS GREENER...
If moving in-house at the top of your game is a viable career move for more junior lawyers, there are risks that should be considered. Only two general counsel in the Catalyst survey reported their company encouraged internal mobility of lawyers to operating units or other staff positions. This is not surprising, given the level of specialization and compensation levels of in-house counsel. Few in-house opportunities are available, or affordable, to lawyers at six or seven years of call.
Even at the senior levels, the opportunities that do arise are few and far between. Says McAusland, "One of the problems in Canada is that there's a dearth of large multinational corporations with attractive opportunities." He made the jump to Alcan because the scope of the job he was offered was "unusually large in the context of a Canadian corporation."
When Al Bellstedt left Fraser Milner Casgrain in Calgary to become the executive vice-president, law, and general counsel at TransCanada, he knew he was grasping a once-in-a-lifetime opportunity. "Jobs like that don't grow on trees in this city," he says. Fresh from its merger with Nova Chemicals and beset with a variety of legal, personnel and business issues, TransCanada offered Bellstedt a chance to be part of the management team that develops the company's strategy on an ongoing basis. He recognizes that his role is not typical. "There are some counsel who fulfill a purely mechanical role-you only do what you're asked to do. I knew that coming in, and if that had been the case, I would not have taken the job."
The prevalence of strategists among the general counsel surveyed by us suggests they represent the leading wave of an approach increasingly accepted by Canada's major business players with multinational interests or international ambitions. But, says Robert Jones, "When you get below that, it's a crazy quilt of practices."
McAusland at Alcan agrees. "In general, Canadian corporations have a way to go in order to catch up to their American counterparts," he says. Many general counsel see the growth of their roles as a result of the move by Canadian companies towards the model more prevalent south of the border, in which general counsel are more likely to play a key management and strategic role. It's been pioneered by U.S. companies such as General Electric, and applied in Canada by, among others, Nortel Networks-the current general counsel of which is Nicholas DeRoma, formerly with IBM in the U.S.
ENTERING THE CORRIDORS OF POWER
It's the leading-edge minority that makes the ultimate difference in a profession. Unlike accountants, who have been both more integrated into companies and more mobile on its corporate ladders, in-house lawyers are a relatively new development in Corporate Canada. Nonetheless, they're making considerable strides, particularly in highly regulated industries. The career prospects of CP Rail's general counsel Marcella Szel, Q.C., are very bright: three presidents in a row have come out of that company's legal department. In Calgary's oil patch, Bellstedt is participating in the management of TransCanada and precedent suggests the top job is not out of his reach. Bennett Jones's alumni Henry Sykes and John Richels already run the Canadian operations, respectively, of U.S.-based giants Conoco Inc. and Devon Energy Corporation. Richels, long groomed for the top job at Bennett Jones, skipped the corporate counsel step altogether, and was recruited directly into the executive team.
The glory comes with a hefty price tag. Thinking about moving in-house to relax a bit before retirement? Think again. "We work as hard as in private practice if not harder, and the pressure is greater," says Capatides. And while salaries are better than they were 20, 10 or even five years ago, adequate financial compensation is still an issue-not all companies have recognized that to get the top lawyers you have to match compensation levels at top law firms.
But, for a company that wants to be a player in the Brave New Borderless World, having a top-notch general counsel who's a strategic thinker able to quarterback any deal from the get-go, on either side of the border, is now one of the passkeys to entry.
Richard G. Stock, M.A., FCIS, C.Adm., CMC, and Lori D. Brazier, B.A., LL.B., M.B.A., are partners with Catalyst Consulting. Additional files and research were provided by Lexpert staff writer Marzena Czarnecka.