Paul A. Marcela | Executive Profile | ATLANTA TREND
A General Counsel Who’s All Business
By Karen Rosen
Shakespeare went overboard with his famous line, “The first thing we do, let’s kill all the lawyers,” but Paul A. Marcela understands the sentiment.
“Many times, the non-lawyers in a scheduled meeting hope that the lawyer who will be attending the meeting has some kind of conflict and can’t make it,” he says. “I don’t know why that is, because most of the lawyers I know are pretty nice people, but they have tended historically to adopt a persona that is sort of standoffish.”
Marcela is Vice President, General Counsel & Secretary of Blue Bird Corporation, the longtime manufacturer of school buses, and North American Bus Industries, Inc., which manufactures transit buses. Before assuming that role in August 2009, he was Associate General Counsel and Assistant Secretary of Dow Corning Corporation.
Marcela says lawyers within a company -- as well as outside counsel -- should defuse a demeanor that’s seen as formal and standoffish. “That doesn’t mean that they should not be professional,” he says, “but it means that they should be user-friendly.”
Marcela’s main practice areas are corporate governance, mergers and acquisitions, securities and finance. Besides earning a law degree from Case Western Reserve University in Ohio, he also has a MBA with an emphasis in finance from Central Michigan University in Michigan and a Bachelor degree in economics and political science from Allegheny College in Pennsylvania.
The business and economics background helps Marcela speak with his clients in language they understand as opposed to in pure legalese.
“Executive management today expects their general counsel to be more than a lawyer,” Marcela says. “They don’t necessarily expect the general counsel to have a MBA, but they expect them to have a broad view of the business and to understand it.
“They also expect them to be able to interact about strategies, vision, programming and so forth, particularly those that the CEO is sponsoring, but also the objectives being advanced by vice presidents and other business leaders in various businesses and functions.”
Keeping Costs in Line
Marcela says the days are long gone when a general counsel had a budget and could use it any way he or she pleased. Now the legal department, just like business units and other functions, must look out for the bottom line, and outside counsel must be business-minded, too.
“Business people will view legal service like they’re buying anything else,” he says. ‘They’re looking at it as a cost, and how to justify that cost, They justifiably ask if there is a less expensive way to procure the same service.”
But, while business people generally prefer the lowest cost alternative, Marcela says the general counsel sometimes has to convince management that there is a reason to pay more. For example, retaining a firm that specializes in a particular area such as intellectual property law justifies a higher rate.
Outside counsel “has to be able to talk about legal fees in a business way: This is what they’re charging, this is why they’re charging it,” Marcela says. “I think they need to realize, too, that there are so many law firms and so many lawyers; if a firm is going to charge a high price relative to alternative firms that can perform similar services, the firm has to be able to justify that additional cost. “
On the litigation side, the general counsel has to distinguish between “fighting to the finish” while leaving no stone unturned, and resolving a case for a modest amount. “Because, if you’re going to resolve a case for an amount that’s far less than what it’s going to cost you to “fight to the finish” by paying lawyers over a long period of time during the litigation process,” Marcela says, “you have to look at it as a business proposition as opposed to simply the desire to win at all costs.”
Bluebird and NABI are privately held companies indirectly owned by Cerberus Capital Management L.P. The companies have operations in Alabama, California, Georgia, Ohio and Hungary and employee approximately 2,200 people.
All On His Shoulders
Marcela is a “one-man show”, counseling management and operational personnel and overseeing outside counsel within defined budgets.
He manages product liability and other litigation and claims for both companies. Marcela also assists company staff with procurement contracts and processes and other commercial activities and interfaces with regulatory staff and outside counsel regarding statutory and regulatory compliance. In addition, he monitors developments relating to intellectual property assets and key legislative and regulatory issues related to the production and sale of buses.
Marcela’s strengths include diplomacy, advocacy, ambassadorship, leadership and international skills. He also is able to maintain his composure, objectivity and patience in difficult circumstances.
Born and raised in the Newark, N.J., area, Marcela graduated from Allegheny College with a double major in political science and economics – the perfect springboard for pursuing a law degree.
During law school at Case Western Reserve, Marcela clerked at a couple of downtown Cleveland law firms. Upon graduation, he joined the Cleveland law firm of Seeley, Savidge, Ebert & Gourash and was a member of the business section of the firm, working mostly on business planning, tax planning, estate planning, probate and the private placement of securities.
“I was always interested in the business side of the law as opposed to being a litigator, ” he says.
Marcela moved to another Cleveland law firm, Meyers, Hentemann, Schneider & Rea, where he did similar work. Deciding that he wanted to practice law outside of a law firm environment, Marcela conducted a search in 1985 for a corporate counsel position. He joined Dow Corning Corporation, an independent joint venture of The Dow Chemical Company and Corning, Incorporated, headquartered in Midland, Michigan.
“At the time, the corporate counsel role was just evolving,” Marcela says. “Only the largest companies had corporate law departments then.”
Marcela’s first role was called “the finance attorney,” and he and two other lawyers were allocated to the Corporation’s finance function, which was led by the Company’s Chief Financial Officer. He soon moved into the leadership position of that group, and then took on the leadership of the business and commercial section of the law department as well.
Marcela managed attorneys responsible for counseling businesses and service functions of the $6 billion, 10,000-employee, global specialty chemicals (silicones) manufacturing company. He was also a member of the law department leadership team.
At Dow Corning, Marcela developed detailed expertise in areas of corporate governance, mergers & acquisitions, securities, bankruptcy, finance, employee benefits, tax and real estate.
As a leader, Marcela is proud that he developed a cohesive team out of a diverse group of legal professionals. He accomplished that through regular staff meetings, which fostered more exchange of information about projects. He also sponsored social events so that the members of the team could get to know one another on a personal basis. “The combination of these actions seemed to foster collegiality within the group and promote cooperation and collaboration among team members,” he says.
They not only saw better results, but also had a more satisfying experience while working as a team instead of just as individuals, Marcela says.
In 1991, Dow Corning became embroiled in the silicone breast implant mass tort litigation, which eventually led to a multi-billion dollar settlement of the issue by Dow Corning. Other implant manufacturers separately settled their implant litigation.
In his role as business and finance counsel, Marcela managed the financial and corporate law aspects the Dow Corning case, primarily with respect to securities disclosures and bank debt negotiations. . He worked heavily with the Company’s Chief Financial Officer and Controller. Marcela believes his business, finance and economics background was helpful with respect to understanding the financial law aspects of the situation..
Dow Corning decided to file for Chapter 11 protection in April 1995. “I think it was the largest Chapter 11 case ever in U.S. history at the time,” Marcela says. “The Company’s Chapter 11 case was not resolved until 2004 primarily because of the contentiousness of the implant issue.. The Chapter 11 process was an effective method to resolve the litigation.”
“It was an exhilarating experience and very much of a learning experience for an attorney involved in the whole process of resolving this mass tort situation, ” he says. “It was probably the biggest legal issue that existed in the country over that period of time from a mass tort perspective.
In mid-2009, Marcela early retired from Dow Corning, and he and his wife decided to move to the Southeast, where they both have family. Shortly thereafter, he was hired to serve as general counsel for the two bus manufacturers.
In deciding what to handle himself and what to delegate to outside counsel, Marcela says there are three criteria: the amount of time he has, his level of expertise and his budget for using outside services.
He handles most commercial, financial and contractual issues directly because of his background, while litigation is mostly done externally with Marcela coordinating the effort.
“Meeting client demand is certainly a key success criteria for any corporate counsel,” he says. “I think that today what executives are looking for from the general counsel is for him or her to be part of the management team and to perform a role beyond purely providing legal advice.”
Throughout his career, Marcela has had to break deadlocks, especially regarding transactions.
“One of the attributes that I pride myself on is the ability to bring disparate views together,” he says, “and to develop a position that is not only palatable internally, but is also palatable -- after some negotiation -- to the opposing side instead of taking an extreme position that’s never going to sell and is only going to protract the process and potentially derail a transaction.”
Marcela has honed these skills in roles outside of his job. In Michigan, Marcela was president of the Michigan chapter of the Association of Corporate Counsel and now is vice president for special programs for the Georgia chapter of the organization. He was also president of the Detroit chapter of the Society of Corporate Secretaries and Governance Professionals and is currently a member of the advisory board of the Southeast chapter of the organization.
Marcela has retained his academic ties, too. In November, Marcela will finish a two-year term as president of the Law Alumni Association of Case Western Reserve University. He has just completed a four-year tenure as chair of the Managerial Economics Program Board of Visitors at Allegheny College. Since arriving in Atlanta, Marcela has joined the Oglethorpe University President’s Advisory Council and also hopes to become involved in other volunteer educational roles in the area.
Marcela also garnered a lot of satisfaction from his work as President of the Midland Country Club in central Michigan. During his presidency of the Club, Marcela fostered the reconstruction of the Club ‘s facilities and the revitalization of the Club’s membership and offering.
“All of these things involve dealing with a lot of different people from a lot of different perspectives and trying to keep people on track toward converting a vision into a reality,” he says.
Secrets to Success
- “Hard work. It is important for a general counsel to be very professionally focused while maintaining work-life balance.”
- “Develop a relationship with clients pro-actively. Good attorney-client relationships do not happen automatically or by accident. General counsel should get to know their clients and understand their objectives. General counsel need to make sure that their clients know that the lawyers are not trying to create roadblocks or be impediments to the achievement of business objectives. In fact, it is important for clients to know that the lawyers are actually trying to help clients reach their objectives. The idea is for the lawyers to say to their clients, ‘I understand what you want to do. There may be this issue or that issue with it, but let’s figure out a way to get beyond those issues in a way that’s not going to create a legal problem for the Company.”
- “Be able to relate to people and speak with them in a way that fosters a constructive dialogue and a productive relationship.”
- “In terms of managing people, to be successful a general counsel needs to understand who the people are that he or she is managing in terms of personalities and capabilities and what drives them and then try to match the assignment of responsibilities to their capabilities, personalities and drivers.ers.”
Paul A. Marcela is Vice President, General Counsel & Secretary of Blue Bird Corporation and North American Bus Industries, Inc. Atlanta Trend expresses its thanks and deep appreciation to Paul Marcela for sharing his thoughts with us.
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