Honest frustration from a general counsel about a CEO’s proclivity to work directly with outside counsel

An interview of Stasia Kelly, the controversial general counsel of AIG who recently resigned, appears in Fortune, March 1, 2010 at 48-49. Kelly explains her relationship with Bob Willumstad, who took over as CEO and was her boss. One critical event was a meeting between Tim Geithner (than head of the NY Fed) and Willumstad about whether AIG, an insurance company, might qualify for government assistance. A few legal issues were present, just possibly? But did Kelly even know about the meeting? Listen to Kelly:

“Not directly. Bob operated mainly through outside counsel. That was unusual. I’ve got to be honest with you: I’m used to being consigliore, and I wasn’t. It’s hard to have outside counsel knowing more than you do but that was Bob’s style, and as CEO, he got to do what he wanted.”

That must be the resigned position of many general counsel: the boss does what the boss wants to do. Meanwhile, tell me again who is held responsible for legal problems and the legal budget?