Academic journal article Business Law International

Corporate Counsel in the Era of Dispute Management 2.0

Academic journal article Business Law International

Corporate Counsel in the Era of Dispute Management 2.0

Article excerpt

' What is Web 2.0? It is a system that breaks with the old model of centralized web sites and moves the power of the Web/Internet to the desktop.'

John Robb (2003)1

Introduction

With 24 years in GE as in-house counsel and ten in private practice, I have seen the world of business and technical support change. The telex of my early years of private practice is viewed as a prehistoric tool by my children. Floppy disks have disappeared, smartphones have become indispensable; the internet is everywhere. Our way of life has changed and so has our way of doing business and managing risks: it has become integrated into the Information Age, into modernity.

Modernity is a word that has been used and reused throughout dispute management literature: some use it to qualify globalisation,2 others to underline the efficient and integrated role of corporate counsel within a given company.3 One is a contextual definition and sets the scenery of the current business environment and its challenges. The other is a structural definition. Both are complementary. General Electric has always -1 daresay successfully - embraced change and has endeavoured to respond to the evolving business environment with structural changes. One of the key structural changes was the implementation of dispute management processes and of a true dispute management culture.

Definition of dispute management

'Dispute management' is a relatively recent term in the legal lingo. If you google it in French, there are virtually no results appearing before 2009 and the publication of the Dispute-Wise study by Fidal and AAA/ICDR.4 In the US, dispute management has been a topic of discussion since the early 1980s.5

Semantically, there is a fundamental incompatibility between the words 'dispute' (in its legal meaning) and 'management'. Putting the two together suggests that legal disputes can be managed, like an asset or a business. Therefore, a legal dispute, something perceived negatively as an intrusion of lawyers and claims into a business whose objective is to generate profit, has been increasingly associated in business practice as an integrated part of the business. It is not so much a paradox as an ongoing revolution in the profession of corporate counsel.

This revolution went, and continues to go, both ways. It required, and continues to require, corporate counsel to gain credibility with business people and organisational leaders, who should integrate corporate counsel into their overall business strategy - an argument I was making close to 20 years ago.6 When it comes to dispute management, it was rightfully argued in the mid-1990s that:

'conflict is generally viewed and managed in a piecemeal, ad hoc fashion, as isolated events, which are sometimes grouped by category if the risk exposure is great enough but that are rarely examined in the aggregate to reveal patterns and systemic issues. Viewing corporate management systematically provides unparalleled opportunities for an organization to learn critical information about its operations, its population and its environment - that is, to achieve a more "global" perspective.'7

The evolution from 'ad hoc' dispute resolution to 'systemic dispute resolution' is a key notion to bear in mind: management requires a structure and a system.

In 1995, GE hired Elpidio ('PD') Villareal as counsel for litigation and legal policy with the broad direction to improve GE's response to the spiralling costs of litigation.8 With the support of GE's general counsel, Ben Heineman, Villareal9 understood that reducing litigation costs would require transforming GE's legal policy fundamentally. His action required deep cultural changes, such as putting in place an institutionalised ADR programme, changing how the lawyers viewed their role, how the company viewed its legal docket and how managers worked with lawyers to handle disputes. This evolution in corporate mentality as regards the management of disputes is a relatively recent trend, which has now become a must for any multinational company involved in the global economy. …

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