When Dane Drobny was an equity partner at Winston & Strawn, he thought he knew what his corporate clients wanted. But after going in-house as general counsel of Sears and then later Groupon, he learned it wasn’t always enough for outside counsel to deliver legal matter wins; they also needed to deliver value.
“I did a lot of litigation and was focused on winning,” says Drobny, who returned to Winston & Strawn earlier this year after 14 years in in-house leadership roles. “When you’re in-house, you realize your outside lawyer can win a case for you but spend way too much money. That’s not really a victory; it’s an outcome in a case but it’s not the result you want.”
Drobny joined Sears in 2010, when the company was one of the largest in the world with $40 billion in annual revenue and 200,000 employees.
It was his first in-house role and he realized the view from the general counsel seat is very different from that of the outside counsel. Where outside counsel are focused on winning, the in-house counsel sees winning as part of a broader goal.
“All of us have consumed services where we feel like the service was done but we’re not sure we got value,” Drobny told Legal Dive. “You’d feel better if you feel like you got value in addition to getting the service.”
For general counsel, that means getting litigation wins without breaking the bank, expecting counsel to respond when you reach out to them and having counsel meet with your business partners on an urgent basis when you ask them to do that.
“A lot of the value is driven by the softer sides of the engagement,” Drobny said. “How you interact with them and how you treat them.”
It isn’t helpful when outside counsel says your chance of winning a legal action is 50-50, for example.
“Lawyers love to hedge—in litigation especially,” he said. “It’s 50-50 whether you win or lose. That’s like a coin toss. It’s not an answer that’s helpful for what we really hire outside lawyers to do and that's help drive better decision-making.”
General counsel need to be able to give real-time updates to their board, on litigation prospects and costs, among other things. So they need firm responses when they ask outside counsel for updates.
“What you’re paying for is judgment,” he said.
Although it’s unusual for a lawyer with no in-house experience to move directly into the general counsel seat, especially at a publicly traded Fortune 50 company, Drobny had worked on Sears’ legal issues for years as outside counsel and knew the general counsel well.
“He called me up, and said this is a job you’d be interested in,” Drobny said.
To make the transition, Drobny relied on the company’s team of about 50 lawyers to apply their expertise to areas he hadn’t focused on up to that point, including compliance, employment law and contracts.
“They had such a large suite of public-company work” that they had expertise in, he said.
To get up to speed on securities law, he dug into the details himself and asked a lot of questions.
“It wasn’t micro-managing but I was trying to understand areas I just didn’t know about,” he said.
He also oversaw communications and internal audit, which put another 50 people under his responsibility, for about 100 total.
“In law school you’re not trained in management,” he said. “Not like in business school.”
Four years later he ran into the CEO of Groupon, at the time one of the highest-profile technology companies in the United States, and was asked to consider joining as head of legal.
“It had gone through an IPO, was a technology and ecommerce company and was international, so for me that was pretty exciting,” Drobny said. “The average [employee] age was in the high-20s, so it had this high-energy culture.”
After joining Groupon in 2014, he ended up staying for almost nine years.
The two companies offered him the top legal seat, Drobny believes, because they were looking for someone who was primarily a problem-solver.
“That’s an important thing about the GC role,” he said. “You can’t just be a problem-pointer-outer.”
His goal now that he’s back with his old law firm, Winston & Strawn, is to apply what he learned while in-house to better serve corporate clients.
That means he’ll ask his clients to tell him up front what their expectations are, what the budget is and to give him real-time feedback on how his team is doing.
“It’s not fair to hold the outside lawyer to a budget he or she doesn't know about,” Drobny said, “or to expect them to communicate with you in a manner you haven’t specified. If you don’t want your lawyer calling you, you want them emailing, then let them know that. If you want updates on a case once a week, let them know that. If you want a budget set and you want to hold them to that budget unless they get pre-approval, let them know that.”
Anything you want, in other words, you have to specify upfront and not assume the outside counsel will know what you’re looking for.
“If you have an objective in a case, let them know that,” Drobny said. “If there’s a business person who [needs to be] treated a certain way, tell them. It has to be this two-way dynamic relationship, where there’s transparency and communication.”
If you’re doing that, he said, your engagement with your outside counsel becomes easier.
“You can clearly say, ‘Hey, this is what we asked for and this is what you delivered. Here’s the feedback. We need you to reorient to what our expectations are,’” he said. “Most of the time, people respond really well to that. They want feedback. They want to do a good job. Their goal is to get more business, so the best way to do that is to do a great job on what they’re working on now. So, there are very few problems once you provide feedback.”
That’s the insight he’ll bring now that he’s once again on the side of serving corporate clients.