THIS YEAR’S
MODEL
Ford’s legal department has learned how to do more with less.
DAVID LEITCH DIDN’T KNOW WHAT HE WAS IN FOR WHEN HE
became general counsel of Ford Motor Company five
years ago. One thing he wasn’t expecting was another
crisis. He’d dealt with two in his previous jobs. Leitch
was chief counsel of the Federal Aviation Administration on the worst day in the history of American flight:
September 11, 2001. And he’d been deputy counsel
to President George W. Bush when the United States
invaded Iraq two years later. The Ford job figured to be
an easier ride.
So much for expectations. A year after Leitch became
GC, Ford’s sales collapsed—from 2006 to 2008, the company lost a cumulative $30 billion. One response: It laid
off a third of its 300,000 employees worldwide.
Percentage-wise, Leitch’s department took an even
bigger hit. Through an equal number of voluntary and
involuntary departures, Leitch cut his staff by 40 percent, from 200 lawyers to 120—an extraordinarily large
reduction, even in the current economic environment.
Leitch acknowledges that the downsizing was painful. By the end, he says, “I thought we were really cutting into the bone.” But his misgivings have dissipated:
“As I sit here now, I realize it was necessary.” Plus, Leitch
says, “people have adapted, and are more efficient and
effective than they ever thought they could be.” His
department continues to perform at the same level, he
says. And it hasn’t increased its use of outside lawyers
to make up for the loss of in-house attorneys.
We last visited Ford’s Dearborn, Michigan, headquarters in 2006, when we were about to name its office
of general counsel the first winner of our Best Legal
Department award. Even then, crisis loomed. The ability of Ford’s lawyers to retain their focus in the face of
adversity was one of the reasons we chose them.
Later that year, the company plotted a sharp change in
course. Chief executive Bill Ford turned over the wheel to
Alan Mulally, the company’s first CEO from outside the
auto industry. (Bill Ford remained chairman.) An engineer by training, Mulally had worked his way up the corporate ladder during 37 years at The Boeing Company.
Even before the leadership change, Ford had begun
to sell its noncore businesses, like the Hertz Corpora-
tion. Mulally embraced that strategy. He believed Ford’s
luxury car brands, for example, were distractions that
had created fiefdoms within the company, and in short
order he shed Aston Martin, Jaguar, and Land Rover. At
press time the sale of Volvo to a Chinese company was
expected to be completed early this year.
