COVER STORY
BEST LEGAL DEPARTMENT WINNER:
QWEST COMMUNICATIONS
BY AMY MILLER
Vision Qwest
The telecom’s legal department gets a makeover—under extreme duress.
RICHARD BAER CLEARLY REMEMBERS THE DAY he walked into the center of a perfect legal storm.
Like the eye of every hurricane, the nondescript San Francisco conference room was decep-
tively calm that fall 2004 day. But the eye soon passed. Baer, Qwest Communications Inter-
national Inc.’s general counsel, stood before two dozen of what he calls a “murderers’ row”
of plaintiffs attorneys from firms such as Entwistle & Cappucci, Berger & Montague, and
Cotchett, Pitre & McCarthy.
They were out for blood. Their clients were angry investors suing to recoup more than $40
billion after a multibillion-dollar accounting scandal wracked the Denver-based telephone com-
pany in 2001. Its stock value had plummeted, and in June 2002, then–CEO Joseph Nacchio
resigned amid rumors of fraud and insider trading.
Baer says his department, not outside counsel, had to take primary responsibility for handling the
difficult, often tense negotiations with the investors. The company’s survival and the livelihoods of
too many people depended on the outcome—people who had nothing to do with Nacchio’s alleged
deeds. “It was very important that plaintiffs lawyers understood that the company is made up of
people, good people,” Baer says. “We tried to humanize the company as best we could.”
The strategy worked. Qwest settled the suit a year later for $400 million, a mere 1 percent of
the original claim. Then Qwest’s lawyers took a deep breath. Investors who had opted out of the
settlement filed additional lawsuits alleging nearly $2 billion in damages. So Baer and his most
experienced litigator, Stefan Stein, crisscrossed the country last summer to negotiate. Last fall,
PHOTOGRAPHY BY CHRIS LAKE
