General counsel, chief legal officer, vice president of legal affairs—the titles may vary from one GovCon company to the next, but the foundation of the job remains the same: ensuring government contractors stay compliant with government regulations in all they do.
And counsel from all fields agree: Few companies anywhere, regardless of industry, deal with the complexities GovCon legal officers do. Today’s climate of increasing regulation and “do-more-with-less” budgets have only increased that complexity.
How do legal officers themselves see this role, and how do they envision it evolving moving forward? Just as the companies they serve do, many frame the answers to these questions in terms of mission.
A Foundation of Compliance
The GovCon legal officer’s role begins with formal legal support—laws, ethics, compliance, security. The primary function of GovCon legal officers and the departments they oversee is ensuring that the company complies with all applicable laws, regulations, and standards while maintaining and growing the business.
“In addition to formal departmental responsibilities, the mandate for the General Counsel at Alion is to provide strategic, holistic legal and business advice to help Alion grow and succeed in a legal, ethical, low-risk manner,” said Thomas McCabe, senior vice president, general counsel, and secretary at Alion Science and Technology Corporation.
GovCon legal officers agree that there’s a lot at stake.
“The ultimate penalty for failure to comply is potentially extinctive: suspension and debarment,” said Lannie Elderkin, deputy general counsel of CSC and chief legal counsel for the North American Public Sector. “All the more reason why we cannot waver from a culture of integrity.”
“Also, protests have become a part of the contracting process, so we must expect to have challenges to our awards,” McCabe said.
At a time when corporations are focused on rebuilding trust and maintaining transparency, GovCon legal officers are more deeply and strategically enmeshed than ever before. The job is more complex and integrated, with more hats to wear.
Gregory Nixon, senior vice president, general counsel, and corporate secretary for DynCorp International, agrees with the need for trust: “They must have a steadfast and unwavering commitment to ethics, compliance, and integrity.”
On this foundation rests the multiple additional roles of the legal counsel. They must work with all departments to encourage innovation within legal and ethical boundaries—for the overriding purpose of delivering competitive, compliant solutions to government customers.
GovCon legal officers deal with traditional legal matters, but also contribute to nearly every other business leadership team on both micro and macro levels. They’re strategists, partners, communicators—all in the context of moving the company forward.
A Look at Breadth and Depth
The following areas are just a few that are increasingly becoming critical facets of the legal officer’s role:
- Forming business strategy:
In addition to leading their divisions, many legal officers play key roles in company transactions, program restructures, business capture, and proposal efforts. They also advise company executives in making smart decisions about company direction.
“They are innovative strategists, helping to identify solutions that maximize the company’s ability to win,” Nixon said.
“By getting involved in the early phases of a business transaction, the general counsel can help the line managers set things up quickly and creatively,” McCabe said. “Rather than fulfill the ‘sales prevention’ stereotype, we try to proactively assist the business units to increase sales properly and effectively.”
“You must be strategic, actively participating in business direction and M&A decisions, and tactical, supporting contracting and operations in multiple locations worldwide,” said Jim Winner, vice president and general counsel for ITT Exelis, Information Systems.
- Navigating regulatory complexity:
“My colleagues on the commercial side often remark on the level and complexity of laws, regulations, policies, and guidelines with which we comply on the public sector side,” Elderkin said. “Every step in the acquisition lifecycle and operation of the infrastructure is regulated and audited.”
“Different from commercial firms, government contractors are subject to a unique and rapidly expanding body of regulations,” said Vincent Maffeo, executive vice president, general counsel and audit, SAIC.
For instance, Grant Thornton’s Government Contractor Industry Roundtable report for 2011, “An Industry Under Pressure,” pointed to a current “climate of enforcement,” where clauses added to the contractor code of ethics and conduct and new rules on organizational conflicts of interest, false claims and mandatory disclosure have upped the anxiety and prompted resource shifts. Increased regulations on businesses overall have become a rallying cry for groups such as the Competitive Enterprise Institute, which said in a recent report that agencies have passed nearly 38,700 rules since 2001 at a rate of about 4,000 per year. The icing on that cake: The number of bid protests filed in fiscal 2011 continued to climb, as it has since 2007.
“Ever-increasing regulation has caused many cases where the law imposes multiple requirements that, in some cases, seem to even contradict each other,” McCabe said. “Alion is absolutely committed to following the full letter and spirit of the law and looks to the general counsel to guide the company through this regulatory maze.”
- Supporting international business concerns:
When leading legal operations of a company with personnel deployed globally, many in harsh and hostile territories, additional factors apply.
“When you have thousands of people deployed to more than 35 countries, with some in active warzones, complex matters of international, employment, regulatory, and corporate law are a part of a typical day,” Nixon said.
- Intellectual property:
With GovCon companies developing innovative processes and tools, the legal officer often must help determine what constitutes intellectual property and how to guard its value—in the United States and overseas, where intellectual property law can be quite different.
At Alion, protecting intellectual property has been a priority. Recently, McCabe’s team assisted Alion in leveraging its intellectual property to capitalize on promising new applications for the company’s software tools in the oil and gas industry.
- Making resources do more:
Legal officers have added yet another hat: financial. As the GovCon sector has faced increasing regulation, tightening budgets, and shifting public perception, legal officers find themselves having to do the same job, but with fewer personnel and financial resources.
“The business, regulatory, and political climate in which we operate is increasingly dynamic and, frankly, uncertain in many respects,” Elderkin said. As government budgets become constrained, cost-efficiency proves essential. Yet, in an environment that has only grown more resource-constrained, both regulations and complexities are mounting.
“With continual government funding constraints, gaps, and shortfalls, all legal officers must work in close partnership with companies’ finance professionals to ensure and maintain expertise on fiscal laws, cost accounting, and related financial rules,” Winner said.
Increasingly, companies are looking to legal officers to demonstrate value—and legal officers deliver. One of the most prominent examples can be found in assisting the company in developing leaner, smarter ways to achieve optimum compliance. This can include consolidating compliance functions, using more assertive leadership practices to protect shareholders and their investments, and solving problems ahead of the curve.
Building compliance up front into every company function adds value as well. This means infusing it into fundamental business and strategic planning functions and across operational activities: leadership and planning meetings, proposal development reviews, teaming and contract negotiations, policy and procedure reviews, and training.
“In order to demonstrate our value, we continually strive to be out from behind our desks and integrated with our business teams, so they can see we are dedicated to understanding their challenges and helping find and implement effective solutions,” Winner said.
And by being present in the early phases of business transactions, legal officers can help line managers set the process up to yield greater time efficiencies, better compliance, the best potential results, and more creative solutions.
When it comes to the dynamic M&A environment of the GovCon field, making a company lean, agile, and ready in advance of whatever challenges a new vertical market may portend helps build value for the company and the customer. Such M&A readiness requires a forward-thinking legal officer. When companies merge into new territory—health IT or cybersecurity, for example—the legal chiefs are likely the first to understand the need for appropriate privacy and security compliance controls.
Legal teams must continually lean forward to identify emerging requirements and communicate and implement them throughout the entire organization. In doing so, they focus on the big picture—the company’s governing principles.
“The trend is to focus on the board, enhancing commitment to sound governance principles,” Elderkin said. “Legal officers are guardians of company reputation through design and enforcement of disciplined compliance processes and practices and shaping a culture of ethics and integrity.”
In order to stay ahead, legal officers are also entrusted with identifying and managing a team of trusted legal advisors to align compliance initiatives across business units.
Finally, GovCon legal officers do none of this from a position of isolation. Skilled in collaboration, they know how to bring in the right resources for any issue. This provides for a seamless approach to compliance—protecting both the top and bottom lines for the company.
Many Roles within a Role
GovCon legal officers need to wear many hats in their dynamic roles. Here are a few areas they need to stay on top of:
• Antitrust and trade regulations
• Intellectual property
• International and import/export
• Board of directors duties
• Industries ranging from aviation and aerospace to telecommunications and beyond
• Corporate finance
• Business transactions
• Technology and internet law
• Employee benefits and pensions
• Government contracts
• Real estate
• Regulated industries
• Mergers and acquisitions
• Security clearances and foreign ownership, control, and influence (FOCI) mitigation
• Bid protests and claims
• Cost accounting standards
• Audits and investigations
Guardians of Value
Ensuring compliance, creating value, mastering the changing regulations—these are just a few of the many responsibilities wrapped into the single role of GovCon legal officer. Here are some of the senior legal officers from large government contracting companies who lead in these areas:
Whit Cobb, general counsel, PAE; Tom McCabe, senior vice president, general counsel and secretary, Alion Science and Technology Corporation; Kevin Hartley, associate general counsel, Microsoft; Lannie Elderkin, deputy general counsel of CSC, chief legal counsel for the North American Public Sector; Scott Silverstein, associate general counsel, office of the general counsel, Deloitte LLP; Arnold Morse, senior vice president and chief legal officer, CACI International Inc.; Chris Heinrich, vice president, legal, KBR; Janet Eichers, vice president and associate general counsel, DRS Defense Solutions, LLC; Stuart Young, general counsel, URS Federal Services; Gregory Nixon, senior vice president, general counsel and corporate secretary, DynCorp International Inc.; Michael Finn, vice president and general counsel, General Dynamics Advanced Information Systems; Jim Rittinger, associate general counsel and secretary, Dell; Jim Winner, vice president and general counsel, ITT Exelis, Information Systems; Anne Donohue, senior vice president and general counsel, SRA International; Vincent Maffeo, executive vice president, general counsel and audit, SAIC