A group of esteemed in-house counsel met for the Third General Counsel Roundtable, sponsored by the Economist Conferences on Nov. 30-31, 2005. Among the many interesting comments in the proceedings, two isolated remarks chimed for me.
The Chief Legal Officer of Bayer, George J. Lykos, warned that “companies should be wary of false economies in hiring outside counsel.” Lykos raised this alarum in the context of retaining outside counsel to help deal with a crisis (at 17). A page later, during a discussion of how to deal with restatements and the costs of counsel, a second participant advised, “Don’t feel that you’ve failed if those expenses are enormous. They often exceed the amount of the restatement – often by a multiple. Legal fees are secondary when the integrity of the company is at stake.”
Two instances, the same message: outside counsel budgets go out the window if the legal issue reaches a certain level of importance, such as the C-suite.