Jeff Carr, the general counsel of FMC Technologies, held forth on a panel at the SuperConference yesterday. In the context of billing arrangements by law firms other than hourly billing (and discounted hourly rates), Carr speculated out loud.
He wondered whether a general counsel who has not actively explored and tested some of the performance-based payment methods might be derelict in the obligation that executive has to steward the company’s funds and resources. Might there be a breach of fiduciary duty to the company, he asked the audience?
Seeking authoritative guidance of what this might mean, I found US Legal.
“A fiduciary duty is an obligation to act in the best interest of another party. For instance, a corporation’s board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust’s beneficiaries, and an attorney has a fiduciary duty to a client.” Surely a general counsel must act in the best interest of the company and its shareholders. To miss opportunities that reduce legal costs and improve quality might, over a period of time, breach the fiduciary duty of a general counsel to the client employer. But I am nervous even writing this…..