INTERVIEW: PETER ENGSTROM
GENERAL COUNSEL - BAKER McKENZIE
Being GC at a law firm may not be what most lawyers envisage when they first consider going ‘in-house’. But how do the role and its concerns differ from those of a general counsel at a corporate?
G C I N T E R V I E W
Peter Engstrom would know. He’s GC of one of the world’s largest and most geographically diverse law firms, Baker McKenzie. When GC’s Catherine McGregor was recently invited to speak at Baker McKenzie’s EMEA partners conference, she caught up with him to find out more about this unusual in-house position.
GC: How did the role of GC at Baker McKenzie develop?
Peter Engstrom (PE): My predecessor Ed Zulkey was appointed GC at Baker McKenzie nearly twenty five years ago, and we became one of the first law firms to have a GC, which makes sense for what has, for several decades, been one of the world's largest law firms. The role originally was more of a claims management role which grew out of dealing with the occasional professional negligence matter, as well as insurance, HR, vendor contracts and such. Ed held the role for two plus decades, during which time the law business and role became increasingly complex. I succeeded him in 2011.
GC: What was your trajectory to the position?
PE: I was trained as a litigator. I did primarily cross-border litigation for clients but eventually got drafted into a firm management position. I spent six and a half years managing our San Francisco and Palo Alto offices, and then was elected to the firm’s global executive committee and served as our North American managing partner. When my term came to an end, our chairman Eduardo Leite asked me to consider taking on the role of general counsel, which I did with the understanding that the role would be re-engineered to take a shape more like that of a corporate GC.
GC: How has the role become more strategic? Are there different challenges for a GC at a law firm compared to a GC at a corporate?
PE: I still oversee work on claims against the firm, employment issues and contracts and such. But the role is now much more holistic, and more preventive. For example, we're doing even more training, and not just risk training but also compliance training more broadly. I work closely with our executive committee, including on governance and compliance matters. And I help with structuring the firm’s various offices and operations globally to ensure compliance in the various jurisdictions in which we operate. In that sense, in common with the way traditional in-house roles have developed as companies have become more global and more complex, the role increasingly embraces enterprise risk management writ large.
There was a time when law firms were smaller, the business was simpler and we did not need general counsel, but the world has changed dramatically and we’ve evolved along with it. Like our clients, we have become a more complex enterprise, with revenues of $2.5 billion and operations in 47 countries. Law firms with lawyers practicing in multiple jurisdictions are subject to multiple regulatory regimes - whether from a law society, or tax, or other perspectives - which have to be both respected and balanced. Meanwhile, our profession has become much more competitive, and clients have likewise become increasingly demanding, owing to the business exigencies they face. Clients want what law firms have to offer to be cheaper, faster and better, and they usually have numerous choices when it comes to providers. I spend a fair amount of time with clients, so I like to think I understand their perspectives pretty well. The presumption that the client is almost always right is a healthy starting point. We try to teach all our lawyers how important it is to understand the client GC’s role and the demands that role places on them.
GC: Many of our readers grapple with getting enough buy-in from the business. As a GC for a law firm do you get too much buy-in from the business?!
PE: In a sense, I don’t have one boss - I have about 700 bosses! By that, I mean I work in a traditional partnership environment, with partner-equivalent owners - every one of them savvy and entrepreneurial and highly engaged (and usually smarter than I am). If I were in a corporate setting instead, I might have the luxury of more of a command and control-type structure to work with, versus our consensus-driven culture. But I do get a lot of attention for what I do from our people and I welcome it, as those 700 partner-equivalents are some of the best lawyers in the world and a real treat to work with, learn from, and be challenged by. The function of my office offers protection to the business and our clients at the same time, and my colleagues worldwide recognise and genuinely appreciate that.
GC: Given that you are surrounded by lawyers, how much of an in-house team do you have?
PE: I have a small but expert team and a reasonable budget, though it never seems quite enough! This includes a handful of dedicated direct reports to me, and then I also draw on other people throughout the firm when needed. My team includes a deputy GC, who supports me, and our director of professional responsibility, who also has a deputy. In addition, we hope soon to have another attorney starting up in Belfast, Northern Ireland, as assistant GC. We also have a number of non-attorneys who report up to us.
GC: Where do you see the business challenges for law firms like Baker McKenzie being focused over the next 12 months or so?
PE: While this is a better question for my management, I'd cite increasing competition, more demanding and discriminating clients, and the enormous financial pressures which come from both of those. Also, while we are busier than we've ever been, I think in the global economy generally there’s still a sense of political and economic uncertainty, and a feeling that we are one crisis away from a recession, or vice versa. So we are continuing to put a lot of time into smart global strategic planning, and placing a lot of focus on talent, quality and client service.
Additionally, we are seeing the effects of an increasing emphasis on compliance, not only in the many regulations to which we are subject, but also in the detailed questionnaires we receive from clients, for example during the RFP process. We've ramped up our internal compliance training, and we are tuning up our firmwide code of conduct. Interestingly, most all of our large or sophisticated clients have done that, yet many law firms have not - at least not in a formal or distilled sense. Our clients increasingly want reassurance that we are scrupulous when it comes to ethics and conduct.
In terms of other specific issues, cybersecurity remains a concern for us, just as it is for our clients, and we're having to devote an increasing amount of attention to both systems and security training. I reckon there's also a worry that technology (and people's use of it) is advancing faster than the law can keep up with it, so we have to think about things like the social media ethical implications regarding attorney advertising, for example.
GC: What might a typical day look like for you?
PE: I usually get to the office at 6am, though sometimes I start taking calls from home as early as 5am, and begin going through my emails. I'll have dozens of overnight emails from all around the world from folks who want help, and I'll also have numerous phone calls throughout a typical day. It makes for a reasonably long day of providing guidance and helping people resolve problems. Plus, I travel to various firm meetings and other external events. If you like to work with people and solve problems - and I do - it's a terrific job. What makes it all the more interesting and enjoyable is working with so many smart people from all around the world, with the multitude of different perspectives they bring to the table.
GC: You’re very active in regards to the firm’s diversity and inclusion initiatives. Is that a natural fit with your role as general counsel? What can a GC bring to the table in furthering that agenda?
PE: To me, it’s completely natural fit, as our business is fundamentally about people and talent. In order to have the best talent, we need to draw from the broadest and deepest talent pools. And then we need to nurture and develop that talent. Having a diverse pool of top talent begets uncompromising quality, which begets well-served and satisfied clients, which means fewer problems, which makes that part of my professional life easier. Plus, I think it is important for people in leadership positions, like that of the GC, to be standing up in front of the room and saying, ‘this is personally important to me, and collectively important for our organisation.’ It is impressive and inspiring to see how so many of our extraordinarily busy client GCs are at the forefront of diversity and inclusion efforts within their own companies.
GC: Do you have any final thoughts for our readers?
PE: As a law firm GC, I’m always interested in asking clients the question, how can law firms like ours do things better, and serve you better? I wish there was more regular dialogue between corporate GCs and law firm GCs, which I think would go a long way toward improving what we as a profession can do for clients.
If you have any comments or would like to contribute to this dialogue, contact Catherine McGregor