ACCNE Special Event: Being the GC!: A Virtual Discussion with Kathleen Burke and Gemma Dreher

I haven't quite made it out. You know, I'm in my cooking.

Yeah, happy to. And I feel like things just sort of, I got a little bit lucky because the reasons for transitioning were very different than the reasons why I'm happy I'm here and probably the reasons why I'm still here. So I mean, I had two kids at the time, and working in the corporate practice at Hale and Dorr just was grueling, and I was just at a time when it was time to start to lever up, frankly, if you're going to kind of keep going on that chain, and it was the last thing on earth I wanted to do. So I decided to move in-house, and MKS was a client of mine. So I always joke about that because I got there and I sort of looked at some of the acquisitions that we had done and I'm like, you know who drafted this? And it was me. So yeah, you got to kind of live with some of those choices that you made early on. But I really went primarily thinking it was a lifestyle change, and in fact I even started off on a four-day week. I remember talking to the CFO at the time, who was my boss at that point, and he said, you know, I don't know if we're going to have four days' worth of work to keep you busy. And that was very short-lived, and it soon became pretty evident that it was not just a full-time job, but it was certainly more than one person was going to be able to do. But I think it's important because I didn't go in thinking I'm going to go build a department, I'm going to, you know, here's what I want to achieve. I just went in as a single practitioner to just do my job and kind of stay in my lane, and it just evolved very, very differently from them.

Yeah, I mean, for me, the biggest part of it is, I don't know if the word is autonomy, but you do get to look at the problems in front of the company and kind of decide how you're going to deal with them, what you're going to prioritize, what you're going to build on, what you're going to let go, what you're going to live without. And even though I'm sort of responsive to my internal clients, it's really much more, I think, self-determinative than being somebody's advisor coming from the outside. So my experience is two things: one is sort of that self-determinative part, and then I think the other thing is just the diversity of what you get exposed to on a day-to-day, week-by-week, year-by-year basis is the reason why I'm still at the same company. And Jeremy, you and I talked about this before, but people will say to me, oh my god, you've had the same job for 17 years, and I said no, no, I've had the same employer for 17 years, but the job is so much different and it's evolved so much over the years. So it really is continually, it sounds goofy to say it's challenging, but it is, and there's something new that comes up every single day. I never think, oh boy, here we go, another IPO. You don't do that in-house. There are some things that are obviously repetitive, but you get better at them. So I just find the practice just suits me better. It's probably a little bit more creative, and it's more of a business partnership than a service delivery. That makes sense.

Yeah, it's... I was thinking about this. Every once in a while you sort of step back and say, I can't believe we are where we are right now. Again, going from a one-person working on a part-time schedule, we're now at 20. We're 20 people. But you don't go from one to twenty; you go from one to two, and then you don't know if you're going to get another headcount, and then three years later you can go from two to three. So you keep having to build the department based on where you are at that moment in time. And the company itself has grown. When I first joined, I think we were a $300 million revenue company, and now we're $2.3 billion. So the needs of the company have changed, the geographic spread, the industries that we're in has all changed. But it is challenging when you don't know what the end game is. And we kind of laugh about that internally within the department sometimes. We'll say, all right, let's step back from being in the weeds. If we were to build a legal department for a $2.3 billion company, how would we build it? And we try to get out of our own way and think a little bit more objectively. And it doesn't necessarily mean you can turn the switch and do it right away, but it might mean, gee, we should really build out this particular area of expertise, and let's focus on growth in that area. But again, as you're adding one at a time over time, the skill sets really have changed too. Early on, you kind of... well, we still are looking for just a good athlete, somebody who can do a lot of different things, but in the early days you had to be all over the field. Now, I think one of the things we struggle with is we don't want people to be too narrow in their scope. It's great that we're now 20 people, but we want to give people still the opportunity to have new experiences, get involved in things like M&A that they haven't been involved in before. So the dynamic and the challenge is very different today. Today we've got a whole bunch of skill sets, and you're thinking, okay, how do I help each individual grow, and then how do I make sure that that's aligning with where the company's going? And before, it was just kind of bunker, just get in there and just get stuff done, and probably frankly more reactive than we can be with this mass, a little bit more mass in the department.

Yeah, it's not easy. It's a tough case to make. And I'll start with the context that MKS is in. Historically, it has been in the semiconductor capital equipment space, and that's a highly cyclical space. So things can be really good for a couple of years and then they tighten up for a couple of years. And it's evolved over time, but in general, we have to realize that we may have relative high and low volumes happening in the course of a couple of quarters. So as a result, the company is very, very conservative in terms of having full-time staff. It wants to have a baseline of staff and then be able to pull in external resources as we ramp up in the cycle. And that's true of direct labor. It's harder obviously when you're talking about lawyers. You can't just say, okay, we're going to pull in somebody for two years and then let them go. That's not going to fly. And that's always in the back of my mind. I never want to ask for a hire that I think anybody is going to give me pressure to adjust down. So I've kind of philosophically wanted to be operating at the baseline level that I feel like my team is safe in the highs and the lows. And the challenge that we've had then is, so how do you do that? And we've been experimenting with that, particularly with big M&A transactions. Now the difference is when you have 20 people versus when you had four, the fungibility of the group is so much different. And we have sort of more junior people now than we had the luxury of having before. So we're able to pull them off and say, hey, we're going to pull you into this. So all of a sudden we have a little bit more, I don't know, with the scale we have a little bit more flex that's internal. So that's one thing that's great. But then there's also just the cost-benefit analysis. And the case in point there is for our IP department. We historically always outsourced all of our patent work, and we did that because we were a $300 million company with a huge breadth of technology. So the technical needs for somebody to do the patent work were just a mile wide and an inch deep. You just couldn't find somebody who was going to fit enough of those technological needs. Then we did a couple of acquisitions, and all of a sudden we started having enough scale. And with one of the acquisitions, Newport Corporation, we acquired an in-house patent drafting team. And so then we were at a size where we could start to say, what is the cost of having an outside counsel drafting this? What is our internal fully loaded cost? Because you know this costs more than just salary, there's benefits and things like that. And then what are the efficiencies on top of that? Because even if it's cost neutral, you may find that you get a lot more out of that internal person who's now able to go and sit down and get to know the engineers, get a heads up before something's quite ripe for filing, but now they know that it's coming just because they have that rapport, where you might not pick up the phone and call an outside lawyer. So there's definitely a quantitative analysis, but there's also a qualitative analysis in terms of what is the output and what are you getting. So we have now adjusted. We now have a hybrid model for IP where we still have some work that we send outside, and that is because it's very particular work and you kind of have a business continuity issue if you bring somebody in-house to do it because you may not be able to have, if that person leaves you will be out of luck. So you're balancing all those different things. So you have that in the back of your mind, and then you're going to your CEO to make your argument. And sometimes the CEO just wants to hear what is this going to save me. So I find myself anyway talking about value oftentimes in addition to cost, because if you're talking solely about cost, you're going to lose many of the benefits that having an in-house person participating, understanding the business, understanding the risks, understanding where we can live with risks. That's a huge part of it too. And when I was talking about that, I was joking about looking at the merger agreement. That is absolutely true. As an outside lawyer, I didn't understand the business as well as I do. I made decisions in advising the client that I wouldn't make those decisions now because I understand more that we could have completely given on this point, but we would never give on this point. So there's a tremendous amount of value that comes from that.

No, I was going to say that that also folds into the issue about M&A. You can certainly outsource M&A, and we do, we rely heavily on outside experts, but I really want the legal team directly involved in M&A because they understand the business as well as anybody. And so the deeper, the more involved they are, not necessarily read every document or check every box, but I want them understanding strategically what are we trying to get out of this deal, what are the risks that you're seeing, how does that relate to our existing risk profile, what do we have to identify to management, what do we have to drill down on, and what can we live with. So for me, having the in-house team involved in M&A is absolutely essential.

Yeah, I mean, it aligns exactly with what the legal team as a group developed, a three to five year plan a couple of years ago once we had a couple of these acquisitions and we all of a sudden we were growing so fast and we realized we need to have a long-term vision as to where we want to be headed so we can slowly start to point the ship in that direction on the horizon. And one of the things that we realized in doing this three to five year plan was that one of our biggest needs was to take things out of the legal department. So as lawyers and as hard workers and such a smart team, everybody's sort of, how can I help, how can I help, how can I help, and over time we had sort of acquired elements where we probably weren't the best resource to use for that. And I'll give one example: business continuity planning. Somehow that just kind of fell through the cracks. It wasn't something, in retrospect now after post-COVID, it's like how could you not have valued that, but this was many years ago and nobody was really taking ownership and all of a sudden the legal department ended up owning that. So as we looked at the department and said where do we want to be using our resources, you have to think about where we're not the best resource to move this forward, and we have since found another resource to move that forward. So some of it's just taking stuff off. The other thing though, which is more related to what you were talking about, is some of the contract work. We realized the businesses were relying heavily on the legal team to make basic business assessments about contracts, and that's not a cost-effective way to use lawyers. So we have started to develop a paradigm where a non-lawyer contracts administrator sits in the business and will escalate to the legal team. Now the legal team may still look at the document for X, Y, and Z, but we don't anymore have a senior person looking at a document saying, you've given a perpetual warranty, do you really want to do that? It just doesn't take a lawyer to raise that hand. So what we're trying to do is push some of the less expert work down the food chain a little bit, with the hope that that frees up the lawyers to be looking at the more complex issues. And now that we are able to again staff with some more junior people, that also sort of frees up the most senior people to be looking, they can take responsibility for key contracts and be an escalation resource for somebody else on other work. And then we're also looking at what is it that we're looking at. Do we need to look at every single document? Some companies do that. We have established some criteria, some is quantitative, some is qualitative, for what the legal team will as a default review, and anything can get escalated. So here we were making our three to five year plan, I was thinking like, oh, we're going to have all these great strategic things that we're going to be doing, and as I looked at my list it was like, we got to get rid of this, we got to get rid of this, we got to get rid of this. But it was helpful because it helped us think about where does the legal team bring the most value. And getting involved in strategic business transactions, even aside from M&A, but working with key customers, that's where we should be. And we should try to push some of the work out, less likely to go out to a law firm unless there is a level of expertise or a level of volume that we can't handle internally. So as the European data privacy laws were evolving, we obviously went out for a lot of help. We've since then learned quite a bit and we have a couple of internal experts who deal with that. But basically, unless it's antitrust in Korea, which we're not going to staff for that, or a huge M&A deal where we just don't have the bandwidth, we really do try to do most of it in-house.

Yeah, I mean, there's... I think people tend to think of becoming a manager as progression and that's sort of the next step, but I think it doesn't match everybody's skill sets, and it's a different thing. And there are times that I have an extrovert part and an introvert part, and there's an introvert part of me that sometimes wants to just give me a big document and I'll sit and do it and get it done and have my quiet time. I think being a manager of a legal team is particularly complex because you're talking about such highly skilled people. And I gave this analogy to a friend who has nothing to do with the law, she's in medicine, and she made a comment to me once about, oh, you're what do you know, all you do is tell lawyers what to do all day. And I said no, that's not what I do. If I was hiring people who needed to be told what to do all day, I would be a disaster. You'd never want to be in a situation like that. So what I said, and this sounds super hokey, actually I'm kind of embarrassed that I'm even saying this, but I said it's being a general counsel or being a manager is almost more like being a conductor of an orchestra. And you have the violinists who are so skilled at what they do, and you have percussion that's so skilled at what they do, and you're trying to drive everybody to make this productive output together and allocating resources among them, like we need more strings. And it sounds super hokey, but I actually think it's pretty true. As a manager, I feel like my job is to first of all find the smartest people you can and the best athletes, and then to align their work with the ultimate strategy of the company. And if you've got the right people and they have the right motivation, you're just kind of keeping everybody on track. And one of the other things that I think is probably one of the biggest parts about being a manager, being general counsel in particular, is a huge part of my responsibility is just communicating. So communicating the executive strategy to my legal leaders, communicating things that they're finding to the executives, or communicating to the board what the issues are. And so you end up just being somebody who's relaying the information to keep everybody in the loop. But yeah, so being a manager to me is if you can align business goals with your individual contributors and then find a way to allocate the resources so that we can ultimately achieve the business objectives, then you're doing your job.

Yeah, so it was interesting because I've had to shift both ways. First I got there and nobody knew what to do with a lawyer. And I joked about the first thing I said was, okay, so where are all the contracts? And the answer was, well, Bill's are in Bill's drawer and Susie's are in Susie's drawer. And we didn't even have a contract system. So a lot of the time early on was spent sort of showing the value of what legal advice could do. There are some areas where, on the board and things like that, I think they were the ones who said, hey, you're a public company, it's time for a lawyer. So there were some people who understood it, but for a lot of other people it was more of a journey to help them understand why there was value. Then you have success there, and then you have to spend the time explaining why you can't get this resource because they're tied up with something else. So that's definitely a challenge. But once people understand that the goal of the department is not to serve you individually as a person but to serve the corporation, then it's pretty easy to explain why we're making a decision about this not warranting the same resources as that. And we came up with, the management came up with a vision and mission a couple of years ago, and one of the key elements is corporation first, organization second, individual third. And if you are aligning your work on a day-to-day basis in that order, then you're probably going to be making the right choices along the way. So we now have that at least to point to and say, hey look, we know that you would like to have it this way, but here are the resources and here's how we're going to allocate them. That's particularly tricky after M&A because you have a culture of another company that has a different experience, a different expectation as to the level of support that they're going to get from the legal department. And we have to train them to adapt to the culture. And some of it takes years, not gonna lie. It's definitely not an overnight event. And I mean, we had one company that we bought where in one subsidiary they had three lawyers. I mean, we just, that's just not a model that would have worked, and we have I don't know 60 subsidiaries. So that took a couple of years to get that one straight. And it's still a little different, still a little bit of an anomaly. But I think if people understand that what you're trying to do is further the business objective, then that helps you go far.

Yeah, so I probably, based on what I was just saying, it won't surprise you to say that to me, number one, I assume you're smart and you know your stuff, right? That's just a price of admission. But in terms of qualities, for sure the one that I look for is people who can align with that kind of business partner mentality. If somebody wants to come and be the smartest person in the room and the academic, it's not going to be a good fit for us. We think you are the smartest person in the room, but you don't have to prove it by just being theoretical. So we never want to hire somebody who's going to say, great news, I've identified the problem. I want, great news, I've identified the problem and here are three possible ways that we can go to solve the issue. And maybe one of those three ways is not the ultimate way, maybe it's something different, but you should be thinking about that as you're discovering the problem. What's the objective? What's the most important thing to get done here? What can we live without? And how do we get to the place that we need to go? So that is absolutely the number one criteria from my perspective to fit into the culture of the department that we have and frankly to bring value. I want executives to see people acting that way and to be more comfortable going to the legal department. When we can engage in thorough business discussions and understand the risk profile of the companies that we support, it really makes a big difference in the way that those business folks come back and engage with us, as opposed to just the dry theoretical black letter law output, which doesn't always work well.

Well, I told you we keep a baseline. So I mean, I have busy lawyers in my department, I'm not going to lie. There's a lot that's... everybody is individually responsible for. We do make decisions a lot about what we really do need to ask when we pick up the phone to speak with outside counsel. We don't want to say, hey, data privacy, what's that about? We want to have done our homework and then have a pointed question. Now sometimes it's new law and you need a 101 refresher, but if that's the case, then what you should do is get six of your lawyers on the phone at the same time so that they can all get the benefit of this expert and say, we want a 101 and here's the agenda that we'd like to hear, and help us understand what's going on with this. So I think using outside resources efficiently is a huge deal. We started instituting, and actually I owe one to set up, we started instituting deep post-deal debriefs with outside counsel after M&A activity. What worked, what didn't work, where we thought we could have done things more efficiently. And then we asked outside counsel to give us their feedback too. And it's getting to the point where they are willing to share things and say, well gee, we attended these meetings because they put six of us on the invitation, and now I have to go to the biz dev guy and say, okay, we need to work on that. So the next time you're doing that and having these all-day due diligence sessions, come and check with the legal team about who should be participating on them. So again, I guess it comes down to communication and expectation, but it's also being disciplined about what it is that you go outside for.

Yeah, that's certainly true. And I think in an area like litigation, it's so easy to have that run away from you.

The offering advice part has declined. I like to think it's important advice, I like to think that it's critical, but the time doing that is definitely less today than it was before. That said, my team collectively is offering advice all the time. And so again, if we're working efficiently as a team, then a significant amount of the collective time of the team should be doing just that. And that's why we want to get rid of those areas where it's not really advice, it's just kind of processing. I want to push that out. That was advice. The other one was me... what was the second part? Sorry.

Well, I have to say, first of all, isn't it wonderful to see the light at the end of the tunnel? Even if the tunnel's not right there, what a relief. Like you wake up every morning feeling like 10 pounds off your shoulders. I would say at the beginning, we have global operations and we make stuff, so we have manufacturing sites all over the globe. And in that early spring 2020 timeframe, it was literally the first thing I would do when I woke up, and I know members of my team did the same thing. The first thing I would do is look up to see what was closing. And it went from east to west, starting in China and then hitting the rest of Asia and moving to Europe and then to the States. And we just watched on a daily basis and had to make decisions on a day-to-day basis about okay, we're shutting that factory down. And that is hard work because it's a lot of hours, it's also mentally exhausting. And I saw the strain on my team. You're making decisions, first of all you have to understand what the laws are, and then you have to make ethical decisions. Are we an essential business under that local law jurisdiction? And that's the difference between staying open and not staying open. So there's a lot of business pressure to make determinations go one way or the other. So you have to really get connected with that analysis. And I think that was a very challenging emotional time during that period for everybody. So that was sort of the content. In terms of the interpersonal part of it, pluses and minuses. I mean, mostly minuses. I love being with people and laughing and just having a different rapport when you can just pop into somebody's office. I miss that a ton. I can't wait for that to come back. On the plus side, we ended up being a lot more intentional about our communication. So the executive team, for example, we now have a weekly check-in, no agenda. Sometimes it's an hour, sometimes it's 15 minutes, but it's just to say what's going on because you've lost the hallway interaction. So we just talked about this the other day. We were saying, well once we're all back in, do we want to keep it? And there's some thought that we might still want to do that because it has enabled us to have a level of connection that you don't have when you're kind of flying by each other all day and people are traveling. And then for the legal team, I would say one thing that has been nice is being virtual has helped to connect the people who are outside of the headquarters. So we have our headquarters in Andover, but we've got legal personnel as far as Israel and many on the West Coast. And all of a sudden now it's sort of equaled the playing field between people in their communications with headquarters because you're all communicating. It's not six people in a room and then everybody else dialing in. It's kind of everybody on the same platform. So I do think there's a little bit of a benefit to that. Not sure that that makes up for the lack of human connection, but it's something.

Yeah, I do. I don't feel like that dynamic has changed. It may be interesting, I'll have to ask my team this, but my experience is that that hasn't changed at all. But it might be in part because of the goodwill that we developed over time pre-COVID with relationships. That said, we have actually onboarded three people in the legal department during COVID, two of whom I have never met individually, but who I work with and rely on and look forward to the time when we can share a beer too. That would be great. But those people got integrated. Two of them were sort of more junior and had senior people to take them under their wing, but I feel like they have integrated really, really well into the group.

Yeah, again, pluses and minuses there. I mean, it's nice to not have to put on pants that button or bother driving to work and those things. I'm not sure that it has completely changed the amount of work, but it has eliminated the non-productive pieces of my day. So I guess I'd rather work an extra half hour than commute a half hour. And it is nice to be able to be at least home to see the interactions going on, even occasionally. I do tend to bunker down and sort of stay in my lane at home, but you still have a little bit more interaction with the family, so that's been nice. I'm amazed. We just adopted during COVID a remote work policy, not just for COVID but long term, which shockingly we didn't have. So we were certainly behind the curve as a company for that. And quite a few people, and definitely quite a few lawyers, have elected to say maybe not completely fully remote, but maybe two days a week remote. So people are liking it. There are aspects that people are liking. I do have a son who missed his prom and his high school graduation and is having a pretty different freshman year of college experience than I had, very different. So on the personal level, obviously there's been a huge impact there. But this too will change.

Yeah, I mean, the ACC, I know I'm preaching to the choir here, but by far the most valuable resource when I moved from the law firm to in-house. The bang for the buck, the amount of information that you get, there's nothing that compares to it. So I immediately realized how valuable of a resource the organization was, really having not known much about it at all from when I was at the law firm. So I did get quickly involved in the board. I was on the board for 11 years. I was president a few years ago. But yeah, I would say, and I actually worked on the Women's Initiative quite a bit too, developing that. But I do think that the Next Gen is probably my personal proudest accomplishment. And I did very little for it. It was just kind of being in that same position that I talked about, a general counsel being where you're kind of communicating to different groups. So I had somebody who was working on our team at the time, Jillian Gentilly. She sat there and she was talking about being a new in-house lawyer and the needs that she had and wanting to connect to other people who were kind of in the same shoes as she was. And our department at the time didn't have peers for her. And then I was sitting on the ACC board hearing how we really need to appeal to this next generation of new lawyers. And the light went off and I connected the two. And some other folks who participated in that initial group, it was really just a matter of connecting the need to the resource and then letting them figure out what was the most important thing. But yeah, I've gone to several Next Gen events. I love going to them. I love talking to people who are kind of new in their careers and understanding what they're struggling with or what motivates them. It is a different generation. You have to have an open mind and think these people think differently than I thought when I was a first or second or third year coming out of law school. I had a different mentality. It's not that it's better or worse, it's just different. And I think until people like me get their heads around the fact that the needs of this next generation are different, we won't be able to align to motivate and incentivize people. And it's not a world necessarily where you stay in the same place 17 years anymore, but that's okay. And what you should be doing is giving people as many opportunities as you can and having them hopefully want to stay with you as long as they want to.

Yeah, I mean, I look forward to being able to have that casual time to connect with people. I think that that is a loss. Maybe I've been able to connect just as well with my direct leadership team that I'm interacting with all the time, but I probably connected a lot less with somebody who's reporting to them. So I would really value the opportunity to be able to do things like an after-work event or something like that. We did try, it wasn't great, but we did try for the holidays. I always try to do some event that's kind of a new experience, and we've had a couple of pretty crazy ones. We had a medium come once, and we made beer one time, and things like that. So this year we did a virtual escape room. The good thing was I was able to have the whole global team, or virtually the whole global team, participate in it, whereas normally it would be just the people at my site. Was it the same as a personal interaction? No. But at least it was a way to do something that was non-work and a little bit bonding. It was fun to watch how some people are really, really good at that. But again, I just don't think anything replaces being with people for sure. I'm not sure if I answered that question.