When Being GC Is Just Part of the Job: An Interview with DSM North America’s Hugh Welsh

Topics: Client Relations, COO/CFO Forum, Corporate Legal, Efficiency, Justice Ecosystem: Innovation, Legal Innovation, Q&A Interviews

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General counsel are always saying that they have to wear a lot of different hats these days: lawyer, crisis manager, cybersecurity expert, manager, and so on.

We recently spoke to one GC who literally does have quite a few jobs: Hugh Welsh, General Counsel of DSM North America. He’s also the company’s president. Oh, and he’s its chief communications officer, too. Is it too much for one man? “Most days I have the greatest job in the world,” Welsh told the Legal Executive Institute blog. “Some days, a very challenging job. But most days, it’s fun.”

DSM is the $12 billion in revenue, multi-national corporation that most people have never heard of. It produces vitamins, food additives, renewable energy components and other chemical products that other companies buy. So, it’s not consumer-facing and thus, not a household name. How does that affect the legal department? “We run a unique model,” Welsh explains. “We’re pretty lean and tight.”

Tight is an understatement. Welsh’s U.S.-based legal team numbers only six. But don’t think that the company’s global headquarters in the Netherlands deploys platoons of attorneys — the entire legal department lawyer headcount amounts to just 50. That may sound borderline insane to most GCs, but there’s a good reason for the relative paucity of legal talent. As a B-to-B company, DSM simply doesn’t have the legal exposure faced by companies that sell to consumers.

Welsh

Hugh Welsh, General Counsel of DSM North America

Being so lean though dictates certain ways of doing business. For example, everyone is a generalist. There is no litigation department, or patent prosecution operation, or separate compliance function. But don’t think that Welsh’s department is just winging it. They do adhere to some state-of-the-art practices — convergence, for one. When he arrived at DSM 13 years ago, Welsh recalls that the in-house lawyers used 200 outside firms. “It made absolutely no sense,” he says, adding that now that number is down to eight. He puts out RFPs every two years, and makes occasional changes to his outside legal line-up. And in return for a certain amount of guaranteed work, Welsh says, “I get a very steep discount.”

Welsh’s team keeps costs down by doing most work in-house anyway. He says that his team can even handle fairly sizeable acquisitions — he calls M&A in general “insanely expensive,” adding that his people can handle deals up to $400 million.

Welsh’s preference for working with generalists isn’t driven solely by necessity. He’s a restless lawyer, who thinks that specializing in one practice area is a bore. He started as a litigator and eventually found his way to the New Jersey law firm McCarter & English. When he started there, he worked a deal with the managing partner: He’d circulate among the different practice groups to see what he liked. He discovered that liked them all.

When some attorneys there jumped in-house to American Standard, he went along; and again, it was a small enough group that everyone did everything. (He says that once he left for DSM, American Standard’s department grew and broke up into practice groups.)

So, what’s it like being president as well as general counsel? “I’m very familiar with the consequences of my decisions, on the legal side. You become a much more pragmatic lawyer, when you know that you have to live with the consequences of the decisions you make operationally.”