InfoPAKSM Role of the General Counsel 2 Role of the General Counsel Updated September 2009 Provided by the Association of Corporate Counsel 1025 Connecticut Avenue, NW, Suite 200 Washington, DC 20036 USA tel +1 202.293.4103 fax +1 202.293.4107 www.acc.com The purpose of this InfoPAKSM is to provide some definition of the role, scope and nature of the duties of a general counsel in a globalized, post-Enron, post-Parmalat, post-Satyam Sarbanes- Oxley world, further battered by a worldwide recession the likes of which have not been seen for more than a generation. By noting some of the issues that arise in the ordinary course of an in- house counsel’s practice, this InfoPAK will help general counsel provide high-quality representation for their corporate client. The information in this InfoPAK should not be construed as legal advice or legal opinion on specific facts, and should not be considered representative of the views of ACC or any of its lawyers, unless expressly stated. Further, this InfoPAK is not intended as a definitive statement on the subject and should not be construed as legal advice, but is intended to serve as a tool for readers, providing practical information to the in-house practitioner. ACC wishes to thank West Group for its generous contribution of research resources. 3 Contents I. Introduction: The Function of a General Counsel...........................................................................7 A. General Overview ................................................................................................................................................................7 B. Road Map .............................................................................................................................................................................8 II. The Corporation as a Client ..............................................................................................................9 A. Duty to the Client ................................................................................................................................................................10 1. Corporate Affiliates.............................................................................................................................................................10 2. Actions that are Not in the Corporation’s Best Interest ...............................................................................................11 3. Contest for Control of the Corporation by Takeover ....................................................................................................12 4. Derivative Litigation............................................................................................................................................................13 5. Dual Representation of Corporation and one or more Directors, Officers, Employees, or Agents........................13 B. Confidentiality .....................................................................................................................................................................14 C. Client Focus..........................................................................................................................................................................14 III. Corporate Compliance and Security ................................................................................................15 A. Ethical Duties .......................................................................................................................................................................15 1. Non-legal Business Activities.............................................................................................................................................15 2. General Counsel’s Role as Legal Adviser..........................................................................................................................16 3. General Counsel as Advocate ............................................................................................................................................17 4. General Counsel as Director ..............................................................................................................................................17 5. General Counsel as Media Liaison....................................................................................................................................17 6. Conflict of Law.....................................................................................................................................................................18 7. Individual Rights and Liabilities of Corporate Counsel.................................................................................................18 8. Post Enron: Expanded Ethics Role of General Counsel under Sarbanes-Oxley.........................................................21 9. General Counsel Licensing and Multi-jurisdictional Practice (“MJP”).......................................................................22 10. Examples of General Counsel Violations.........................................................................................................................22 B. Forms – Compliance Plans and Policies for Your Company.......................................................................................23 IV. Record Retention and Management Policies ...................................................................................25 A. Overview...............................................................................................................................................................................25 B. Requirements of Corporate Records Management Programs ......................................................................................26 For more ACC InfoPAKs, please visit http://www.acc.com/infopaks 4 1. Retain Records Long Enough to Meet Requirements ....................................................................................................26 2. Locate Records Quickly and Effectively ...........................................................................................................................26 3. Protect Records When They Are Subject to Litigation or Examination......................................................................26 4. Destroy Obsolete Records ..................................................................................................................................................27 5. Appropriately Tag Records According to Non-Retention Requirements...................................................................27 C. Establish a Defensible Policy..............................................................................................................................................27 1. Know What Types of Records Are Generated and Retained ........................................................................................27 2. Know Who Owns and Controls Each Record Type.......................................................................................................27 3. Know Where the Records Are Located ............................................................................................................................27 4. Know When Records Can Be Destroyed .........................................................................................................................28 V. Reporting Structure............................................................................................................................28 A. To Whom Does the General Counsel Report?................................................................................................................28 B. Functions Reporting to the General Counsel..................................................................................................................29 VI. Internal Legal Department Structure .............................................................................................30 A. Different Models..................................................................................................................................................................30 B. Legal Recruitment and Staffing .........................................................................................................................................33 1. Recruiting Top Talent.........................................................................................................................................................33 2. Hiring the Best People ........................................................................................................................................................33 3. Providing Orientation.........................................................................................................................................................34 4. Motivating and Managing People.....................................................................................................................................34 5. Handling Difficult Situations.............................................................................................................................................34 C. Developing & Maintaining Good Working Relationships............................................................................................35 VII. Controlling Legal Spending................................................................................................................35