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2010 Best Legal Department…And the Winner Is?

Corporate Counsel's fifth annual competition for "2010 Best Legal Department" identified Microsoft as its winner. The winning legal department was one that prevailed in a prolonged and very expensive antitrust legal battle. As Ian Forrester, a partner at White & Case who represented Microsoft in Brussels put it, the case is "a really extraordinary piece of legal history." Some have called the settlement one of Microsoft's general counsel, Brad Smith's crowning achievements. He and his legal team ended more than a decade of close scrutiny by European regulators. The software colossus can keep doing business across the Atlantic, and the stage is now set for better relations with Brussels.

The litigation successes were among several reasons Microsoft was named Best Legal Department of 2010. The department achieved success after having its budget and staff cut for the first time, due to the economic meltdown. The department improved its diversity, it's helped laid-off workers get free computer training, and has represented immigrant children in court. In other words, it has reached out to the community and given back in tough times.

All three legal departments that were selected this year (the other three finalists) had one thing in common: they retooled and achieved great success doing "more with less."

  • Finalist: Discover Financial Services
  • Finalist: Hewlett-Packard Company
  • Finalist: The Williams Companies, Inc.
See below what made each of these legal departments stand out from the crowd:

Discover Financial Services
2009 Net Income: $1.3 billion
General Counsel: Kelly McNamara Corley
Number of In-House Lawyers: 34
Pro's: Doing a lot with very little.
Con's: No formal pro bono program.
Why Was It Picked as Finalist: The legal department at Discover — the country's sixth-largest credit card company, headquartered in the Chicago suburb of Riverwoods — has only 34 lawyers. While they have limited resources, they are doing a lot with what they have. Its tiny litigation team — with just one full-time attorney and two part-time lawyers — handled over 1,000 legal matters in 2009, while resolving 11 of 14 pending class action suits. Not bad for a small legal team!

Hewlett-Packard Company (HP)
2009 Revenue/Net income: $114.55/$7.66 billion
General Counsel: Robert Holston
Number of In-House Lawyers: 190/425 (worldwide)
Pro's: Good litigation management, excellent pro bono and diversity programs.
Con's: Ad hoc flextime and fixed-fee arrangements.
Why Was It Picked as a Finalist: Retooling of the legal department, reorganization of litigation, and commitment to pro bono and diversity. "This isn't a place lawyers go to retire," said deputy GC Ashley Watson. Today, HP lawyers describe the department as "energized." In the past two years especially, there have been higher work expectations, a boatload of new hires, and ambitious new projects like revamping the company's worldwide system for complying with local laws that have meant more work for newcomers and veterans alike. Changes were not easily made, but today HP's Legal Department stands as one of the best in the country.

The Williams Companies, Inc.
2009 Revenue/Net Income: $8.3 billion/$285M
General Counsel: Jim Bender
Number of In-House Lawyers: 39
Pro's: Outside counsel management, discovery, and pro bono efforts.
Con's: Diversity.
Why Was It Picked as a Finalist: Williams' legal department was able to do what most talk about, but never get to achieve: to cut its outside legal expenses by about 15 percent. The effort started six years ago, when General Counsel Jim Bender decided to reduce the number of law firms the natural gas company used, and implemented blended-rates (that came as close to fixed rates as can be). Williams's ability to use its data to effectively manage outside counsel is one reason it was chosen as a finalist for Best Legal Department. They've also done a god job implementing a new compliance program and developing a comprehensive approach to discovery. Kudos for a legal department that's done what most hope to achieve , but never quite get to do - make real cuts into outside legal fees.

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