Executive vice president and general counsel (Also serving as chief environmental officer) Sempra Energy
Sempra Energy was created in 1998 through a merger of the parent companies of two long-established and highly respected private sector utilities. Sempra is a Fortune 500 energy services company based in San Diego, serving the largest customer base of any energy utility in the United States and with approximately 14,000 employees worldwide. The Sempra Energy companies develop energy infrastructure, operate utilities and provide related products and services to more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia. In 2006 Sempra produced revenues of nearly $12 billion.
Javade Chaudhri joined Sempra Energy in September 2003 and is the company’s executive vice president and general counsel. In his role Chaudhri is responsible for all legal affairs and compliance for Sempra Energy, where he oversees a legal team of nearly a hundred lawyers. He also serves as the company’s chief environmental officer.
Chaudhri has Bachelors and Masters degrees from Yale University and a law degree from Georgetown University. Before coming to Sempra, he served as senior vice president and general counsel of San Diego-based PC company, Gateway, managing the company’s legal affairs, government relations, contract administration and ethics. Before joining Gateway as deputy general counsel, Chaudhri was a senior partner in the Washington, DC office of Winston & Strawn LLP, where he co-managed the international and technology practice groups.
Throughout his career Chaudhri has written and lectured widely on international infrastructure projects, technology and commercial law, and has been a visiting faculty member for the International Development Law Organisation in Rome and the International Law Institute in Washington, DC. In February 2007 the Asian American Legal Defense and Education Fund honoured Chaudhri and two other individuals with a Justice in Action Award, recognising Chaudhri “for his long-standing commitment to diversity and his outstanding legal achievements”.
Role: Executive vice president and general counsel (Also serving as chief environmental officer)
Company: Sempra Energy
Sector: Energy services
Number of employees: 14,000
Before coming to Sempra Energy, I was the senior vice president and general counsel at Gateway from 2001 to 2003. I joined there as the deputy general counsel in 1999. Prior to that I was a partner at Winston & Strawn (1993-1998) and prior to that I was at Jones Day in Washington, DC (1980-1993)
About 90 lawyers worldwide, mostly located in California.
About 75 per cent of the work is done by in-house lawyers and staff. In some operational, commercial and regulatory areas, almost all the work is done in-house; while in certain specialised areas, less than half is.
In-house lawyers are integrated into the strategy and operations of the company in an intimate and established manner and are able to work as part of the business (and risk management processes) in a seamless and effective manner. In-house lawyers become valued advisers and part of the integrated team that advances the company’s objectives and strategic vision. Ultimately, for a successful in-house lawyer, it is a much more satisfying professional experience to work in-house than serve as an outside adviser.
What is most important when you move in-house is to bring a practical and problem -solving mindset to advancing the goals of your company. Your in-house clients may share your interest in the finer points of constitutional law or follow fascinating new areas of law, but their highest priority is to get from A to Z, while remaining fully compliant with applicable rules, regulations and contractual obligations. So lawyers have to sharpen their focus when becoming in-house attorneys. Working in-house requires the same high professionalism that is required at the best law firms. Finally, in-house lawyers must learn to remain current not only in their particular specialisations, but also in macro political, business and legal trends and requirements that affect strategic initiatives.
Life as a general counsel of a large public company is much more stressful than being an outside adviser. As an outside adviser you are effectively a consultant, whose advice may or may not be followed. After an outside counsel completes an assignment or project, however it works out, he or she can move on to the next client or project.
As the general counsel (and member of the company’s senior management team), the advice I render directly affects the life and future of the company, its shareholders and employees. There is no buffer zone. You have to make major decisions based on the facts as you know them at the time and judgments you form in real-time. These decisions will be analysed and judged after the fact by various constituencies, with the benefit of hindsight. On the positive side, an in-house lawyer is involved in every step of a concept that one day becomes an exciting reality. On the other hand, being an in-house counsel does mean that you forgo being involved in the variety of industries and geographies that may have been part of your work as an outside adviser to many companies and institutions.
To a significant extent, in-house lawyers need to be generalists. They need to be able to see the big picture and have sufficient broad-based legal knowledge and judgment to identify the issues beyond their particular areas of competence and to know how and when to call on specialised skill-sets (internal or external). In-house lawyers also need to have excellent social and communications skills as they have to work with many stakeholders within and outside the company. Is the role of the in-house lawyer changing, for example, becoming more specialised? Yes, to some extent. Many of the lawyers we have been hiring recently are partners or very senior associates from mainstream law firms. This is because we need qualified and experienced specialists – litigators, employment lawyers, M&A lawyers and so forth – who can exercise independent judgment and give on-the-spot legal advice. Certain other lawyers with expertise in areas such as regulatory or environmental law can also come from governmental agencies or other companies or we develop these skills in-house over the course of years.
The ability truly to understand the issues of clients and address those issues in a timely, efficient and effective manner. I am regularly surprised by how frequently there is a disconnect between the true needs we have and the perspective or agendas of outside counsel.
Whenever I deem it necessary or helpful. Certainly for any significant litigation, transaction or risk management issue, it is necessary to have the perspective and experience of external advisers. Often, therefore, we hire external advisers on large projects, transactions or litigation; on many other occasions, however, we only ask specific and limited questions of outside counsel with the substantial majority of the work being done in-house.
We tend to hire individual lawyers. That is certainly the mantra, but there is the benefit of the doubt given to certain selected firms because of those firms’ overall performance and effectiveness. Established relationships do play an important role.
We use a range of outside counsel, depending upon the subject matter and geography involved, and there is no one firm that I consider our ‘default’ outside firm.
We rely upon past experience, references from our US counsel and other networks, such as colleagues at other companies.
Failing to respond in a timely fashion and undertaking activities significantly beyond the agreed scope of the retention. If you could change one thing about the ‘average’ external adviser, what would it be? The ability to respond to issues in the same time frame that in-house counsel must respond to them. Instead, many advisers will create a massive and expensive multi-lawyer project out of items that ought to be simple responses to limited questions. Often the question is quite simply, ‘What’s the time?’ and we don’t need an explanation of how atomic clocks work.
Many of California’s creative business and technological attributes are well known and these help make California a good place to do business in general. On the other hand, the state often creates or amends laws and regulations such that the stability needed to make long-term infrastructure investments does not exist. Some things have improved recently but greater consistency of rules and harmony with federal and state rules would help. California has also created certain mandates and rules that discourage many businesses from maintaining any operations in the state.
Unfortunately, as we know, lawyers continue to be seen as just a necessary evil and not particularly likeable or useful; some people wish that they simply were not needed. I wish that lawyers were, rather, venerated members of society who are seen as helping to create new business initiatives (and jobs, shareholder returns and other value) as well as promoting equal justice and advancing human, environmental and social goals. I do believe that lawyers do these things, by and large. That is certainly the Sempra law department’s mandate. I know many business people who dread having to engage with outside counsel, whether they represent the company or the other side. For all the valuable work outside lawyers do, the general feeling that one is left with is that their overarching interest is economic and it is all about billing rates and hours.