Ben Heineman is a “legendary and transformative figure” in the field of corporate law. He is also a published author. His most recent book, The Inside Counsel Revolution: Resolving the Partner-Guardian Tension*, will be released this Spring. Heineman discusses his experiences in the corporate law field and what led to the writing of his latest book in this interview by Mark Wahlstrom, CEO of Sequence Media Group.
One very important topic covered in Heineman’s new book is the role of a corporation’s counsel and counsel’s relationship with the corporation’s CEO and its board of directors. Heineman explains that the underlying theme of his book is about “the mission of the corporation today . . . is to fuse high performance with high integrity and sound risk management.” The problem of corporate lawyers, Heineman says, is that they can be too subservient to corporate leaders and not sufficiently independent. In the end, the lawyer’s job is to be “the guardian of the corporation.”
There are many obstacles in the way of a lawyer’s performing that function. The lawyer faces many pressures, including the corporation’s drive to show good results to shareholders. Heineman characterizes these things as “pressures for corruption.” The task of a general counsel is to be a partner, in the sense of attending all the meetings and being integrated into the activities of the company, while serving as the guardian of the company to assure that it has high performance, high integrity, and sound risk management.
As to compliance issues, Heineman believes that the starting place is that top leadership of a company have to deeply believe in high performance with high integrity. And the integrity issue is more important than making good numbers. Below the CEO, a number of people, including the general counsel, will have roles in ensuring corporate integrity. Function is more important than form in this regard.
For a global company such as GE, just determining what the law is in hundreds of countries can be daunting. So as a place to start, the corporate counsel should be a key person in maintaining integrity. But there still must be others, including compliance officers, to make things work.
The host of challenges facing corporations today will, Heineman believes, produce the inside counsel revolution he discusses in his book. The complexity of corporate life today is the reason that the inside counsel has essentially become a partner in the management of the company. This is reflected by the compensation of inside counsel which has become comparable to that of corporation CFOs. The other factor in the revolution has been the transfer of power from outside counsel to corporate legal departments. Law firms “are trying to do less with more.” Heineman says these factors will move the revolution forward.
Ben W. Heineman, Jr. is a Senior Fellow at Harvard University's Belfer Center for Science and International Affairs. In his early career, he served as a public interest lawyer. After serving as Assistant Secretary for Planning and Evaluation, he was managing partner of the Washington office of Sidley & Austin, focusing on Supreme Court and test case litigation. In 1987, Mr. Heineman became Senior Vice President, General Counsel and Secretary of the General Electric Company located in Fairfield, Connecticut. He is a published author. The Legal Broadcast Network is a featured network of Sequence Media Group.