Few in-house legal departments are so proud of their strategic relations with external counsel that they are prepared to launch a bespoke website trumpeting their approach to the world at large. But the general counsel at global chemical behemoth DuPont has devoted two decades to getting the formula right, so it’s perhaps understandable that he wants to have his slice of cyberspace glory.
Back in 1992, Thomas Sager was already a fixture at the company, having joined the legal department 16 years earlier. But twenty years ago he launched the ‘DuPont convergence and law firm partnering programme’, which saw the company slash its network of outside counsel by about 90 per cent.
Today, Mr Sager continues to oversee what DuPont describes as ‘a benchmark in the industry’, a model that has earned him ‘national acclaim for its innovative approach to the business of practising law’.
He is also one of six officers at DuPont who reports directly to the chief executive, as Mr Sager oversees a legal department of some 220 lawyers and 600 total staff. Most are based at the company’s headquarters in Delaware, with others scattered across the US and the globe in ‘legal hubs’ in Geneva, Sao Paulo, New Delhi and Shanghai, with additional ‘satellite offices’ in Beijing and Singapore.
Chemical companies are a bit like oil companies – their executives take a lot of grief at dinner parties for allegedly polluting and poisoning the world. And DuPont has had no shortage of controversy swirling round it, not least reports last year that it was one of 30 US companies that paid more to its lobbyists to schmooze politicians on Capitol Hill than it did in taxes.
Nonetheless, after 36 years it is to be expected that Mr Sager would be a company man, and he is above all a staunch defender of DuPont’s role on the international business stage.

The economic traumas of the past five years have seen managers of in-house legal departments react in several ways – some have shed staff to keep internal costs down, while others have taken on lawyers to cut expenditure on outside counsel. How have you approached recruitment during that period?
Five years ago, about 70 per cent of our total legal department spend was on outside counsel, which also included fees to patent agents in various parts of the world. Today, that figure has been reduced to 57 per cent – but much of that has been the direct result of an increase in the number of lawyers from our recent acquisition of Danisco [DuPont paid nearly $6.5 billion in a deal to take over the Danish food ingredients company last year.]
So the ratio has become a bit more balanced, but we are still highly leveraged in that a lot of our variable cost is associated with either defending or pursuing litigation, filing patents in the US and beyond.

Has the changing business climate affected your staffing approach at all?
We are going through a transformation as a company, becoming increasingly focused on bio-technology. And with that comes a need to find intellectual property lawyers who have advanced degrees in bio-technology as well as law degrees. We are becoming less chemical dependent – not totally free of material sciences, which remains one of our business pillars, but we are heading more towards bio-tech, which has again been illustrated by our acquisition of Danisco.
We are also shifting some of our focus to emerging markets – so a lot of our hiring of lawyers is happening outside the US.

DuPont has a long history of forging innovative relations with private practice law firms. How would you
describe the approach?
We’ve always adopted the view that strategic relationships have served us incredibly well regarding our outside network of external providers. Because the more we invest in those law firms, and the more aware they are of the direction in which the company is going, the better they will be able to serve the company, regardless of whether it is in litigation or helping us protect our intellectual property.
We are a pioneer in the strategy of convergence – beginning the process in 1992 by creating the DuPont legal model. That initial process ran from 1992-96, during which time we went from having about 350 law firms on our books to 34, and from about 150 other ancillary suppliers to about 10.
On the law firm side, the numbers have increased slightly since then, as we have about 39 currently on the list. But essentially, the principles behind that initial convergence process continue to be the way we operate – strategic, highly leveraged relationships with external providers. They may be competitors, but for the sake of working with us, they put their competitive instincts to one side and work as one.
This doesn’t mean that on occasion we won’t look for legal advice outside that network if we lacked some specific expertise, or in certain cases of joint defence arrangements.

What’s at the heart of the DuPont legal model?
Our legal model playbook has several elements: a strategic relationship based on trust and candour; the embracing of alternative fees to drive efficiency, predictability and better results; leveraging technology; eliminating duplication of effort; joint collaboration; and strategic budgeting to ensure we are meeting the goals of the respective businesses to advance their interests in litigation or project-related work.
When we began the process of convergence it was simply through typical beauty contents – what are now requests for tender. We wanted to articulate to the firms the vision we wanted them to embrace and how it might be different from their historical relationships with other clients.

How did the firms react to that suggestion?
Their mindset went from curiosity or even cynicism to one of enthusiasm because we were providing law firms with a laboratory to experiment in ways of creating efficiency – and with efficiency they get more work.
The emphasis in the model is doing work cost-effectively and bringing closure to matters, which has been somewhat of an anathema to law firms. The historic view has been the longer a matter takes the more hours could be billed. But now they realise that with alternative fee structures, they can still be handsomely rewarded for bringing something to closure quicker – rewarded in a way that recognises their contribution and that allows them to do other work.
Our network of firms works very well – even if there is a hiccup every now and then. Those firms outside the network may have client relationships like this, but we are probably the exception rather than the rule, because of our willingness to invest in the financial success of the firms and their willingness in turn to invest in our financial success. We have a true partnership relationship with our firms.

Has the financial crisis affected your dealings with the firms with which you’ve had very long-standing arrangements?
The recent recessionary period has really tested relationships with law firms. Fortunately, by the onset of the crisis we had invested many years in the model and in some of these firms. And, because of that, we were able to come up with creative ways to navigate through that year and a half of very difficult economic times.
For example, some firms came to us and waived their fees for three months. Others unilaterally froze their rates and still others reduced rates. These were more than just token gestures – some of the dollars were significant. And because of those measures, we were able to reduce our costs during that rough period.

For years the public perception of the chemical sector has been one notch above the big oil companies and Satan himself. Has that been a problem from a legal perspective – and is there any sign of a change of attitude?
Historically, we’ve suffered from a poor public perception. We are 210 years old, so we have legacy challenges in the environmental space that we work on regularly – we are forever trying to eliminate or reduce our environmental footprint.
But the image of the company has been transformed dramatically. We have a major positioning effort currently underway called ‘global collaborator’, in which we tackle challenges such as population increase and feeding the world through bio-technological advances. It also addresses issues around protecting the environment, and protecting people, such as soldiers and military vehicles in combat, as well as developing alternative fuels to reduce energy dependency on traditional sources.
These are not issues traditionally associated with a chemical company. We still have traditional chemical offerings and products, but over time we are going to see more and more of that being shed and an increasing embrace of bio-technology, material sciences and industrial bio-sciences, such as enzymes that do remarkable things.
We can’t solve the world’s problems on our own – increasingly we are working with academics, non-governmental organisations and governments themselves. One leading academic recently told us that we are an innovation powerhouse, but as big as we are – and as much talent as we have – the pace of innovation is too great in the world for us to keep pace alone, so we need to reach out to third parties to capitalise on the work of talent outside DuPont. And that is the way in which we are positioning the company now.

What makes a DuPont lawyer?
Recently, there has been a real effort to recruit people with bio-technical degrees.
But generally we are looking for lawyers who come from any number of backgrounds – the public sector, private law firms or other legal departments. We are looking for people who are totally collaborative, good communicators, who also have an ability to apply business disciplines to the practice of law, for example, being able to demonstrate project-management skills.
However, first and foremost, they must have our core values. They have to appreciate the importance of ethics – the how, as much as the what. Valuing and respecting people and protecting the environment. Those are company-wide values and we in the legal department are expected to lead by example.

CV -- Thomas Sager
Senior vice president and general counsel at DuPont legal since 2008. He joined the company in 1976 in the labour and securities group.
Mr Sager became a divisional general counsel in 1994, and four years later he was appointed as chief litigation counsel. He was named vice president and assistant general counsel in November 1999. Mr Sager received a law degree from Wake Forest University School of Law in 1976.