good jobs. Still, Douglas Cropsey,
one of the lawyers on the finance
team, vividly recalls the anxiety.
“At night, it was gut-wrenching to
think about the prospect of having to uproot your family.
But during the day,” he says, “the volume of the work kept
you focused.”
Told about the 40 percent cut, Jon Bellis calls the num-
ber “extraordinary.” Bellis chairs the law department con-
sulting group at Hildebrandt Baker Robbins, and has been
surveying in-house staffs for 25 years, beginning when he
worked at Price Waterhouse. His most recent, the 2009 Hil-
debrandt law department survey, examined cost-cutting
measures instituted at large companies from the end of
2007 to the end of 2008. Overall, less than a quarter of com-
panies laid off lawyers, and only 9 percent cut more than a
tenth of their staff. (According to the survey, 16 percent cut
none, and 48 percent actually increased their legal ranks.)
“Ford is the most extreme reduction I’ve heard of at any
large law department,” Bellis says.
Clearly, not everyone believes it’s a good idea to cut
lawyers during a crisis. It may be the very time you need
them the most. Schloss says of his finance team: “In bad
times, we need more resources, not less.” He adds: “I think
legal is probably very similar.” In good times, he points
out, transactions are easy and disclosures are clean: “You
could probably deal with less [legal staff]. When things
are difficult, you probably need more. We are somewhat
countercyclical to the environment.” The finance department, he notes, shared equally in the cuts.
Asked about the rationale for laying off lawyers,
Mulally doesn’t address the question directly. Instead he
speaks of the necessity of making companywide cuts: “Say-
ing goodbye to talented coworkers and friends is never an
easy decision, but we needed to size our business for the
real market.”
Leitch seemed to have doubts at first about the deep cuts
to his department. But he didn’t petition the company for a
pass. “I thought it was important for the office of general
counsel to participate in the shared sacrifice that everyone
agreed was necessary to turn the company around,” he
says. Asking for special treatment could have rendered
CEO ALAN MULALLY
CAME TO FORD AFTER
37 YEARS AT BOEING.
his department less effective “if people concluded that we
weren’t team players.”
More recently he’s discovered an upside. “The reduc-
tions gave us confidence about what we could achieve,”
he observes. “The people in the office learned a lot—I’ve
learned a lot—from feeling that our backs were against
the wall. We had to figure out ways to accomplish more
with what we had.”
The litigation group has been particularly resourceful.
It’s long had four teams: product litigation, general litiga-
tion, regulatory, and in-house discovery. In the past, law-
yers were assigned to one. But the reductions have some-
times required them to multitask. A general litigation
lawyer may be asked to help out when the discovery team
is overloaded, and vice versa. The lawyers are becoming
utility players, and more agile.
Making a virtue of necessity? Perhaps. But Katherine
Kjolhede sees the big picture. Until last May she managed
Ford’s employment litigation (which is handled separately
from general litigation); now she’s the GC at Ford Credit.
The key to Ford’s downsizing, Kjolhede says, was that it
was early and consistent. What about the lawyers—should
they have been placed in a special category? She doesn’t
buy that claim either. “If every other division is shrinking,” she says, “it’s hard to justify giving lawyers a pass.”
LESSON FOUR:
GO HEAVY ON PROCESS, ADD A PINCH OF ATTITUDE
MULALLY ARRIveD WITH A PLAn TO UnIFY FORD
as one team, and a process to get there. The vision was
important, but the really big deal was the process. It’s
not only inclusive and transparent, it’s very much data-driven—the kind of approach you’d expect from a former
Boeing engineer. And it resonates with the lawyers.
At Ford, they seem to measure everything. They set
performance targets, and measure how they’re doing.
They project forward, compare backward, check the side
mirror to eye the competition. The slides Leitch carries
around in his binder are filled with numbers. each has a
column called “metric” in which he states specific goals for
the matter at hand.
It is this aspect of the crisis at Ford that Leitch finds
so different from the others he’s weathered. “The big difference for me from the crises when I was in public service,” he says, “is that [the crisis at Ford] involved finance
and economics. It was more measurable in terms of the
problems and the progress.” It’s hard to know how you’re
doing when you’re fighting terrorism. It’s a lot easier to
measure a company’s performance, and “there’s a comfort
in that,” he says.
When we visited four years ago, we saw a department
that embraced data—especially in its approach to litigation.
Litigation chief Mellen is a lawyer with lots of numbers in
his head. Having overseen 900 trials to verdict during the
past 17 years, he has a good idea of what Ford’s cases are
worth. And he’s learned to make do with a smaller in-house
