An international energy company based in Houston, Marathon Oil Corporation is the fourth-largest US-based integrated energy firm in the world, whose revenues at the end of 2007 totalled $65 billion.
WILLIAM F SCHWIND JR
Role: Vice president, general counsel and secretary
Company: Marathon Oil Corporation
Marathon was established in Ohio in 1887 and moved its headquarters to Houston over a century later, in 1990. The company has operations in the US, Equatorial Guinea, Libya, Ireland and the North Sea, as well as in developing areas such as Angola and Indonesia. Its activities include oil and gas exploration and production, oil sands mining, refining, marketing and transportation, as well as integrated gas. The company hit the headlines in August 2008 when it offered a 20 per cent stake in its Angolan assets, a hotly contested prize worth billions of barrels of oil.
As a law student at Loyola University of Chicago, William Schwind was recruited as one of Swift & Co meatpacking company’s 25 in-house lawyers at its corporate headquarters in Chicago. Originally hired by Marathon as a specialist in the relatively new area of employment law, he soon moved into work as a pipeline lawyer, especially in the downstream area. Schwind’s career has led him from his native town of Chicago, through Ohio, to a stint in Washington, DC, as a government affairs representative and a two-year tenure in Jakarta, Indonesia before coming to Dallas and taking the position of general counsel in a Marathon subsidary. He took over as Marathon’s Houston general counsel in 1992.
For him, one of the greatest challenges is the broad approach demanded by work as in-house counsel, requiring a strategic mind in business and law. "Your role and responsibility is to be both legal counsel and business representative," he says. He feels that work as a corporate counsel is an integral part of the business process. The company can shape its business focus around a legal structure. He states the satisfaction of being involved in "high-end, high-dollar" sophisticated matters.
When working with outside counsel, Schwind maintains, "You need to identify a firm that satisfies your needs." In his opinion, "All firms have cultures and personalities, and if they match up to yours, maintaining that relationship is key."
To do this, it is important to keep lawyers apprised of the company’s business plans in order that they might appreciate the strategic thinking behind them better. "It is important that outside counsel know where we’re headed - I always make sure they know what Marathon’s intentions are, right from their junior days," he says.
Schwind’s 15-year stint at the company begs the question: what has kept him there for so long? He explains that the turnover at the legal group overall is low. He stays because, "It’s a highly ethical, highly principled company. We instil standards in our employees right from day one." Add to this an involved management team, and he feels that Marathon is on to a winner: "In comparison to other companies, the tone is set at the top. Marathon management really understands and values their lawyers."
And the source of greatest satisfaction? Simply, "a successful outcome" - when the client is happy with the result, whether in adversarial or day-to-day matters.
Where were you previously employed?
I began my legal career in the corporate legal department of Swift & Company in Chicago, Illinois, following graduation from law school in 1969.
How big is Marathon Oil’s legal department?
We have 72 lawyers, including myself. Sixty-six are located in the US and six located outside the US. Total staff, excluding the lawyers and including a contract administration group, is 79 for a total of 151. That also excludes tax lawyers and staff who report to the CFO.
What percentage of your work is performed by in-house lawyers?
That is difficult to answer. We handle all legal matters internally, except for most litigation, highly specialised matters outside our expertise or matters that require resources beyond our capability to provide. If one were to look at it on the basis of budget; in this year roughly 60 per cent was external and 40 per cent internal. That can be misleading because of significant litigation matters in a particular year and we more normally tend to be 50/50 or 60/40 in favour of in-house budget. Our internal expense includes a significant "burden" rate in addition to salary.
What are the advantages of doing work in-house?
The major advantage is cost. We find that a "fully loaded" (meaning inclusive of all expense and burden associated with staff and support infrastructure) hourly rate for in-house lawyers has at least a $30 - $50 per hour advantage. And even this is not an entirely fair comparison since the outside counsel rate does not include any of their usual disbursements charges.
In-house lawyers can practise preventive law: stopping problems before they begin, which is not usually a province of outside counsel. Over time, the in-house lawyer learns the inner workings of his client’s business as well as the client itself. This is a major advantage in practising preventive law and, further, provides efficiency in not having to establish a new learning curve - as is often the case with outside counsel. Since the in-house lawyer should be more familiar with his employer and client, the work product should be more efficient and focused. The relationship allows for more feedback without worrying when the meter begins to run each time a phone call or e-mail is necessary or desirable.
How is life as an in-house counsel different from that of a private sector adviser?
While I have not practised in a law firm, I believe I have some feel for the major differences. In-house counsel are generally able to handle a matter or project from its inception, including the shape and form of it, through to its conclusion. At least at Marathon, that will include contributing beyond just providing legal advice. Often, outside counsel only see a slice of the matter. They are called in for their expertise in a particular area and when that is satisfied they leave the project.
While we are on call 24/7 just like our outside counsel peers, we can usually regulate our work to manage a home life. That is difficult to do when in the firm environment you are often in "crisis" mode.
If it’s litigation, the outside counsel is usually called in to put out a fire and they have very little input into preventing the fire from occurring in the first place. Outside lawyers rarely have the benefit of practising preventive law.
What qualities make a good in-house lawyer?
Integrity, competence, confidence, diligence, strength of conviction, strong interpersonal skills, keen insight, business acumen, ability to listen, lack of ego, team orientation and a sense of humour.
What qualities make a good private practice lawyer?
Identical traits as those indicated for an in-house lawyer.
Is the role of the in-house lawyer changing, for example, becoming more specialised?
Clearly, yes. I think, much as in medicine, the days of finding a legal generalist who can capably handle all problems that arise are long gone. The amount of regulation and government oversight virtually requires specialisation - if not that, the malpractice insurance rates may play a role.
Do you see yourself hiring the firm primarily, or the individual?
I believe you hire the lawyer and not the firm. That said, in my experience, I believe that firms have a culture and personality, which generally represents all of the lawyers in the firm. If I am comfortable with those traits I generally have no problem in conferring with a lawyer within that firm that I have not previously worked with.
Do you have a regular external corporate firm?
With our global presence, we have a number of firms with which we regularly deal. Baker Botts LLP does a considerable amount of work for us.
When dealing outside your home jurisdictions, how do you find counsel?
We rely heavily on references from our current approved firms.
What common behaviour from an external adviser or their firm do you find least acceptable?
An air of superiority or arrogance, which defeats a team approach to resolving problems.
What makes Texas "a good place to do business"?
Texas has a healthy economy, a diverse population that is accommodative, good schools, a plentiful skilled and unskilled work force, a positive business environment, and recently enacted tort reform.
What is the most pressing issue facing the legal profession today?
Generally, a lack of respect for the legal profession. Legal TV dramas, from which most people get their view of the profession, often lack a reality of the practice. Everything is done in terms of absolutes and there are always winners and losers.
Technically, I believe that the profession and the judiciary do not understand the full ramifications of the electronic age and the reality that exists in most companies and businesses. Despite attempts at focused rule changes, we still have a mindset built around traditional paper-intensive discovery and litigation. I don’t think our system approaches electronic media in the way users currently intend it.