Diversity, Ethics, and Succession Planning By Patricia Lee, Search Consultant Change is in the air, not only in the halls of Congress but also within corporate inhouse legal departments. Companies typically have various management reasons and timing guidelines for enhancing or growing their companies' legal departments by adding talented and exceptional lawyers. However, due to changes that have recently taken place in the political, legislative, and global environments, companies would be well advised to consider whether they should feel greater senses of immediacy about hiring general counsel and evaluating their succession plans for the upcoming year. Over the last couple of months, some of the top reasons that companies have added general counsel to their legal staff have included the promotion of diversity, ethics issues, and vacancies (some due to scandals). Moreover, the new legislative focus coming to Congress may be another reason for companies to consider hiring in-house counsel proficient in understanding new governmental regulations and managing potential litigation. Diversity According to the U.S. State Department's website, the election of at least 71 women to the House of Representatives and 16 to the Senate in the 2006 midterm election set a new record for the number of women elected to Congress. Women's growing political power has also been evidenced by the elevation of Nancy Pelosi, Congresswoman from California, to the third most important post in the nation's government. Previously a Minority Leader in the House of Representatives, Congresswoman Pelosi was confirmed by the Democratic Caucus on November 16 as Speaker of the House for the 110th Congress, which will convene in January 2007. The growing number of women in leadership positions was noted by the Minority Corporate Counsel Association (MCAA) in a 2005 report. MCCA found that there was only one female general counsel among the Fortune 500 companies and that 74 female general counsel worked for companies in the Fortune 501-1000. The number of female general counsel in major companies has increased by 17 since MCCA's survey was conducted, which may well indicate another starting point for change. On Election Day, H&R Block, Inc., appointed Carol Graebner Executive Vice President and General Counsel. Graebner, who was formerly Executive Vice President and General Counsel of Dynegy, Inc., succeeded General Counsel Nicholas Spaeth and will oversee legal functions, government relations, and advocacy outreach. Ethics Counsel In light of the Sarbanes-Oxley Act, companies have found it necessary to address new regulations by hiring in-house counsel who understand and can apply highly technical regulations and laws. Companies must be aware of the ethical implications business actions have for them and for their employees. In October, Hewlett-Packard named former NCR General Counsel and Senior Lawyer Jon Hoak as its Chief Ethics and Compliance Officer. According to The Wall Street Journal, this ethics position had been vacated after allegations of an internal scandal. Hoak was hired to address the ethical needs of the company. Vacancies It is helpful for companies to develop succession plans to address vacancies that may occur inhouse. According to CNN.com, more than 150 companies are currently under investigation by the Securities and Exchange Commission or other federal agencies. Vacancies can remain open for months, as was the case at Apple Computer. In mid-November, Apple announced that it had hired Donald J. Rosenberg (formerly of IBM) to fill the vacant seat of its former general counsel. Another company recently released its general counsel in connection with an internal investigation. In these cases, succession plans and reliable sources of exceptional legal talent would have been very valuable tools to rely on when filling the sudden vacancies. New Legislative Focus This fall, the election season has brought change to the U.S. Congress, as well as to many states across the country. Top governmental issues to be considered and addressed by Congress include healthcare, the environment, minimum wage, the deployment of troops, and a of the Sarbanes-Oxley Act, along with its myriad of regulations and guidelines that affect corporations on a daily basis.