Benefit From Using Outside Counsel With In-House Experience

Friday, April 1, 2005 - 01:00

Editor: Chris, I appreciate your taking the time to share with our readers your thoughts about going outside after serving as in-house counsel.During the course of this interview we will discuss how in-house experience can enable an outside counsel to better serve his or her corporate clients.First, tell us a bit about your career path?

FitzPatrick: I have been practicing law for 28 years. I started with a small Wall Street firm as an associate. After three years, I moved to the Federal Trade Commission for four years as a Senior Attorney, and after returning to private practice briefly, I joined the Koch Administration as Deputy Commissioner and General Counsel for New York City's Department of Consumer Affairs. In 1988, after 11 years of private and government work, I thought the corporate environment might offer something new, and I joined Ciba-Geigy (which eventually became Novartis) in the pharmaceuticals division. I held different general counsel positions for Novartis, sat on executive committees of businesses, and managed legal departments. My titles included Global Vice President, Legal and Regulatory Affairs at CIBA Vision, and more recently, Senior Vice President and General Counsel for the Novartis Consumer Health Division. In 2003, I made a decision to take early retirement from Novartis and move back into a law firm environment. I selected Kelley Drye & Warren from among a number of excellent firms and joined as a partner in September of 2003.

Editor: Tell us about your responsibilities at Novartis and the types of matters in which you were involved?

FitzPatrick : My focus for my last eleven years at Novartis was on the medical device (eyecare), over-the-counter pharmaceuticals ("OTC") and nutrition "consumer products" businesses. These companies had combined annual sales of about $3 billion in the U.S. in 2003. Some of the substantive areas I focused on include commercial litigation, product liability litigation, advertising law, contracts, licensing and transactional work, and FDA law . At different stages, there was a great deal of intellectual property work - everything fromlicensing-in technology for new and innovative products to managing patent infringement litigation.

Editor: What are some of the specific activitiesin which you were involved while at Novartis?

FitzPatrick : There were two areas that particularly occupied my time. One was the litigation front. The other was the transactional front.

I was actively involved inlitigation. Major cases were handled by outside counsel and managed by me, as general counsel. For example, I steered a controversial and high profileage discrimination "collective" action to summary judgment in favor of the company. I was also involved with major advertising litigation under the Lanham Act, where I was called upon to protect the equity of Novartis' OTC brands and challenge misrepresentations made by major competitors. I also had to lead the company's defense in massproduct liability/personal injury litigation brought against many OTC companies over an ingredient in certain OTC products. In addition, I had to manage the company's response to different government investigations into industry, including healthcare fraud and abuse and antitrust reviews.

I was also involved in multiple transactions.For example, while I was at CIBA Vision in Atlanta, we built a significant ophthalmic pharmaceuticals business through acquisitions and licensing. As General Counsel, at each of the companies for which I had legal responsibility, I wasinvolved in the negotiation and documentation ofnumerous strategic product acquisitions, licensing arrangements and joint ventures.

Editor: You have already successfully handled a number of major matters while at Kelley Drye. Please describe some representative matters.

FitzPatrick: We defended a leading medical device client sued for fraud in the inducement and breach of contract by another medical device company and won a motion for summary judgment that eliminated the most significant claims. We participated as local counsel in the very successful defense efforts of an OTC pharmaceutical company in mass products liability litigation. On the transactional side, we represented a major consumer healthcare company in its acquisition of a hand sanitizer product from a manufacturer of industrial hygiene products.

We also represented a small pharmaceutical company in its move from Texas to New Jersey, helping coordinate the transfer of its manufacturing assets and execution of a facility lease with another healthcare company, as well as a long-term product supply agreement and intellectual property license grant.We assisted another international pharmaceutical client in the sale of over-the-counter women's healthcare products to a leading marketer and distributor of branded products through an asset purchase agreement, supply agreement, promotion agreement and patent licenses.

Kelley Drye's well-deserved reputation as a leading litigation firm enables me to bid successfully for very significant trial work from major clients, and the breadth of the firm's substantive practice areas also allows me to provide full service to these clients in addition to litigation. So, besides transactional and litigation engagements like those described, since 2003 my firm colleagues have handled tax, commercial leasing, environmental, employment and other "specialized" matters for different clients Iintroduced to the firm

Editor: Tell us how your experience as general counsel has provided you with insights that your present clients appreciate?

FitzPatrick: General counsel havebroad responsibility for all legal matters. You sit as a member of the management team of the operating company. You have to be accessible to every department and manager. You also have to manage your legal and litigation budgets in a manner consistent with the business strategy There is never a quiet moment as an in-house lawyer in a sizeable organization. The volume and intensity of demandson these individuals is considerable.

I view what I am doing for my clients now through the lens of my experience as in-house counsel. I respect the in-house lawyers' time, because I know that they are always being pulled in different directions. I understand their objectives and priorities. In billing, I understand their need to budget matters and to be accountable for costs incurred.

Editor: How are your experiences at Novartis helpful to you in your present outside counsel role?

FitzPatrick: On a day-to-day basis for manyyears I partnered directly with CEOs, COOs, CFOs, and other corporate officers, lawyers and managers from all levels of the organization on the most significant problems and issues affecting their businesses. That included managing risks, major lawsuits, negotiations, deals, product recalls, policy discussions, public image issues and other serious developments. Since this is the kind of in-house activity that dominates the life of a general counsel, when you counsel from the outside, the knowledge of these internal pressures and dynamics is invaluable. It enables you to cut through a lot of extraneous detours and hone in on what the business objective is to understand where the matter you have been retained forstands in the firmament of corporate priorities. It helps you focus with the client on additional non-obvious but importantaspects of a case that may have a significant bearing on how the legal matter should be handled, such as public relations issues, regulatory implications, organizational and personnel complications, and budgetary concerns.

In-house lawyers and clients do not have time or patience for a lot of academic exercises, for over-educating outside counsel, for wasted efforts or wasteful spending. They do not have the resources to divert to fringe issues. I understand this fully.

Editor: What about marshalling the resources of the firm to work with smaller in-house departments?

FitzPatrick: Often, perhaps because of a sudden spike in legal activity, a client does not have the in-house resources to handle all pending non-litigation matters. I let clients know that in such situations I can call upon the firm's resources to staff the matter at the appropriate level. In order to save costs I can bring in associates with experience and skills appropriate to the task defined so that the internal deliverable is timely produced in a quality manner but the client is not hit with an inordinately large unbudgeted bill. Similarly, when an in-house team is faced with an atypical issue requiring specific expertise, such as environmental questions or creditors rights concerns, we can supplement the in-house effort by assigning a firm 'expert' to the in-house efforts.

Editor: Corporate counsel look for outside counsel who will resolve a matter as early as possible to avoid unnecessary expenses.

FitzPatrick: This has always been a mission for me. When I was general counsel, Iroutinely asked my outside counsel, immediately after issue was joined, to talk to the other side about why they were wasting their client's money on such a specious case. After my counsel reluctantly complied with this unusual request, they would invariably come back and report that the other side believes passionately in their case, and there is no way to reason them out of the dispute. That was the expected response, but at least we tried, and if, one out of ten times, this early contact leads to elimination of gross misunderstandings, and quick, cost-free resolution - which has actually happened - I have done my client a major service. Now that I am the outside lawyer, I ask clients if they want me to pursue such long-shot, early discussions with my counterpart, before we take the gloves off and never look back. Similarly, on this avoiding unnecessary expenses point, when I was in-house and retained outside counsel to defend what I deemed a frivolous lawsuit, the first thing I wanted to discuss was how soon we could prepare a motion to dispose of the case. Six months of litigation is, with few exceptions, far less costly than eighteen months, and in certain cases it pays for the defendant to advance discovery and move for dismissal. My intense focus as an in-house lawyer on pursuing litigation tactics that might protect the bottom-line has remained with me, and will certainly serve my clients well now that I am working for them as outside counsel.

Please email the interviewee at cfitzpatrick@kelleydrye.com with questions about this interview.