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As part of a series of interviews with in-house counsel, Ivonne M. Cabrera, senior vice president, general counsel and secretary of Dover Corp., recently responded to questions posed by Bloomberg BNA's Michael Greene. Dover works with many outside counsel on its legal matters around the world, and the key characteristics that the company looks for in hiring law firms are the willingness to partner meaningfully with the company and the ability to offer practical advice, Cabrera says.
Could you talk a little bit about how you became general counsel for Dover? Was being an in-house counsel always something in your plans?
After I graduated from law school, I spent a few years in private law firm practice. My experience representing clients as outside counsel piqued my interest in an in-house position. I thought it would be more rewarding to partner with the business and contribute to its success over the long term rather than advise on discrete matters episodically. So when I was given the opportunity to go in-house at a pharmaceutical firm, I jumped at the chance. Some years later I joined Dover as deputy general counsel.
At the time, there were two lawyers in the legal department, including the general counsel, Joe Schmidt. Joe liked to say that he could not envision ever retiring, but he made it clear that he intended to prepare me to be his successor. He gave me a great deal of responsibility and guided me as I learned new areas of the law. As a litigator, I had had little exposure to corporate and securities matters and I had some catching up to do. I was fascinated by the broad array of legal issues I handled in that role.
In 2010, I was given the opportunity to serve as general counsel of one of Dover's larger global businesses. This was a developmental role intended to give me more exposure to international operations and commercial activities and experience as a member of an executive management team.
When Joe Schmidt decided to retire two years later, I was well-prepared and delighted to be asked to succeed him as general counsel.
How does the work of being an in-house counsel differ from representing companies while working at an external firm? Could you address the distinct challenges, and perhaps advantages, you might have in each position?
As in-house counsel, you are uniquely positioned to spot issues and address them before they become problems. This can add significant value to a business by enabling better, more informed decision-making. Outside counsel more often enter the picture after decisions have been made and implemented, an issue has arisen and the business needs advice to fix the problem.
Also, in-house counsel can develop a deeper understanding of the business, including its strengths and weaknesses, which can help in weighing risks and opportunities and making judgment calls. But the broad nature of an in-house practice means that in-house counsel tend to be generalists, whereas outside counsel are typically specialized, making them subject-matter experts in their areas.
As a general matter, what types of things attract you in looking for potential outside counsel? What types of things might turn you away? Is there anything that is an instant disqualifier?
We generally look for outside counsel who have deep experience in their field and are practical. By practical, I mean that they can find workable solutions; that they understand our objectives and help us weigh the relative risks of different approaches to find the best path forward in light of our objectives. We don’t have instant disqualifiers, per se, but in order for a strong relationship to develop, our outside counsel must partner with us meaningfully. For example, we have had counsel proactively offer to handle a matter for us on a modest capped-fee basis where that arrangement facilitated our considering strategic options that we otherwise would have ruled out. This was meaningful to us. It showed us that the firm was viewing the situation from our perspective—it wanted us to have more options available to us, as it would have wanted if it were in our shoes. While the arrangement substantially limited the firm’s fees, it enabled us to work closely with the firm over a long period of time and to experience their excellence—an opportunity we otherwise would not have had.
As a general matter, is there a type of work you believe is better suited to external counsel, as opposed to those you have in-house? What types of work do you typically commission outside counsel to complete?
We typically engage outside counsel to represent us in connection with litigation and M&A transactions, in matters that are highly technical or can benefit from specialized expertise—an example is intellectual property—and to help us navigate issues in international jurisdictions. This is a representative list. We work with outside counsel in many other areas. I should note that Dover owns a wide variety of operating companies and given the breadth of our markets, we work with more than 50 firms worldwide.
This year Dover announced that it had acquired Gala Industries. Are there any unique challenges when it comes to hiring external counsel for M&A deals?
We have completed several transactions this year and continue to have an active pipeline. Because we are a highly acquisitive company, we are fairly continuously engaged with outside M&A counsel. We work with a number of outside counsel who know our company and our approach to deals, and who actively look for ways to keep fees at a reasonable level. We consider which firm is best suited to help us on each deal, which depends in part on the nature of the deal, the jurisdictions involved, and the level of complexity we anticipate. Often there are several firms that are well-positioned to help us on a deal and we pay particular attention to their proposals for managing the deal in a cost-effective manner. From time to time we handle very small deals entirely in-house, but that is unusual for us.
What type of ratio does Dover maintain between in-house and external counsel? Some research has suggested that the use of external firms is falling to historic lows. Do you expect that ratio, and the ratio your company uses, to continue? What would tip the scales, if anything, to using more outside firms?
Dover has a relatively small legal department and we rely to a significant degree on outside counsel. Our company continues to grow and to expand internationally, and I don't see that changing any time soon. We like the significant flexibility this gives us in employing the right resources on our matters.
Many legal departments have ranked ethics and compliance as the highest business priority for this year. Does that compliance work necessarily have to involve external counsel? Generally, what is the ideal set-up for your legal department's compliance efforts, between internal and external work?
Ethics and compliance is very much a business priority for us. And having the right internal resources is particularly important in this area because it can drive the effectiveness of an ethics and compliance program. I don't believe ethics and compliance work necessarily has to involve external counsel, but I will say that we find it very valuable to stay engaged with external practitioners in this area. We benefit from their independent judgment and perspective, and from their experience and expertise, especially when their background includes work in the government sector. We very much look to them for guidance, both with respect to particular issues and more generally in our efforts to increase continuously the effectiveness of our ethics and compliance program.
Ivonne Cabrera is the senior vice president, general counsel and secretary of Dover Corp., a diversified global manufacturer with approximately $7 billion in revenues and 26,000 employees. She oversees Dover's legal and compliance teams and advises senior management and the board of directors on a wide variety of legal and corporate governance matters. She served as Dover's deputy general counsel from February 2004 to January 2011, and as vice president, business affairs, and general counsel at Knowles Electronics, then a wholly-owned subsidiary of Dover, from February 2011 to September 2012.
Prior to joining Dover, Ms. Cabrera served as senior counsel at Bristol-Myers Squibb Co. in New York. She earned her law degree from Columbia University School of Law and a Bachelor of Science degree in mathematics and chemistry from the University of Miami.
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