Five years ago, Sandra Phillips Rogers started an effort to analyze and revamp how the auto giant’s corporate legal department – informally called Toyota Legal One – selected and worked with outside counsel.
The idea was to develop a more collaborative relationship between Toyota’s lawyers – both in-house counsel and its outside lawyers – and the rest of its business.
Rogers, current Toyota Deputy General Counsel Ellen Farrell and others took several months to meet with leaders from various business units across the company. They talked with leaders from law firms that did work for Toyota and some that did not.
In the years since, Rogers was promoted to general counsel, Toyota North America relocated its headquarters to Plano and Toyota Legal One has fully implemented its Partnering Program and law firms are witnessing the intended impact.
“We wanted to improve results for our client, improve efficiency and thus lower costs and improve our relationships with the outside counsel who work with us,” says Farrell, who chairs the legal department’s Legal Operations Committee, which is in charge of implementing the Partnering Program.
“A key goal is for our outside lawyers to get to know their client better and better understand our business and, as a result, do better work for us,” she says. “But we also want to work with our outside counsel to identify best practices and share those best practices.”
The Partnering Program is similar to the “preferred lists” of outside counsel that many corporate legal departments employ, but much more extensive. And it goes beyond discussions on rates, alternative fee agreements and staffing to include comprehensive approaches to diversity and public service and pro bono.
Toyota Legal One, which now employs 54 attorneys in-house, has about 60 outside law firms – many of them with offices in North Texas – included in its Partnering Program.
The DFW Chapter of the Association of Corporate Counsel and The Texas Lawbook announced Thursday night that Toyota Legal One and its Partnership Program are the recipients of two honors in the 2018 Outstanding Corporate Counsel Awards: the Creative Partnership Award and Diversity of the Year.
Two law firms – Winston & Strawn and Norton Rose Fulbright – were also nominated along with Toyota Legal One for the Award. They are part of the Partnering Program and received the joint honor at the award’s event on Jan. 24 at the George W. Bush Institute.
“Toyota has become an exemplar among corporations for its work in establishing creative partnerships that have enormously benefited non-profits and other groups in need of quality legal services in North Texas,” Norton Rose Fulbright stated in nominating Toyota for the honors.
Creative Partnership Award
Born on a U.S. Air Force base in France, Farrell spent her junior high and high school years in San Antonio. She went to Rice University for college and Loyola Law School in Los Angeles. She practiced general litigation and labor and employment law at Gibson, Dunn & Crutcher for four years and spent four years in the tax group at Arco, which is now part of BP.
In November, Farrell will celebrate her 20th year as a lawyer at Toyota. She says changes in both business and the practice of law dictated that Toyota Legal One re-examine its legal operations.
“The speed of business has accelerated and that changes what is expected of the lawyers serving those business,” she says. “When I started, lawyers were not expected to be on call 24 hours a day.
“With the Partnering Program, we identified the legal needs of the company and then we identified our resources and processes,” Farrell says. “It was beneficial to our clients and our lawyers to deepen the relationships to better serve our clients and to give new, different, diverse viewpoints and creative ideas and solutions.”
One issue Farrell says Toyota was able to identify was that outside counsel was not adequately communicating issues and solutions to non-lawyers in the business – too much legalese.
Farrell says the Partnering Program has helped change that. The law firms say they like it, too.
“TL1’s Partnering Program is an impactful model of collaboration that maximizes the quality of legal services and extends beyond the provision of legal services to improve important elements of the legal profession,” Winston & Strawn partner Taj Clayton wrote in nominating Toyota for the award.
“Through the Partnering Program, Toyota’s in-house legal team provides unified, best-in-class legal services to Toyota’s North American clients, such as engineering, manufacturing, sales, marketing, distribution and government affairs affiliates,” Clayton said. “The program delivers expertise, efficiency and solutions to its clients’ most complex issues.
“The process enables TL1 to provide creative solutions to business and legal challenges in a manner that not only advances business objectives but also mitigates legal risk to the enterprise,” he says.
Diversity of the Year Award
One of the Partnering Program priorities for Toyota is clearly to promote diversity and inclusion. No corporate legal department is pushing more forcefully, trying to be more creative and making a bigger difference than Toyota’s.
“Diversity and inclusion lie at the heart of Toyota’s evolution as a mobility company,” Rogers told The Texas Lawbook. “It’s important to us that our company and legal department reflect the diversity of the marketplace we serve, and we deeply value having diverse team members and business partners with a broad range of perspectives at the table.”
A 2001 graduate of the University of Texas School of Law, Rogers is a founding member of the Center for Women in Law at UT. As a former partner in the Houston offices of Morgan, Lewis & Bockius and Shook, Hardy & Bacon, she understands the internal struggles corporate law firms have in their diversity efforts.
“The Toyota legal department has turned the diversity issue on its head and they are getting results,” said Baker Botts partner Christa Sanford. “Toyota is affecting change at outside law firms because outside counsel knows that Toyota requires them to do so if they want Toyota as a client.
“From the get-go, Sandra focused on diversity,” Sanford said. “She and the lawyers at Toyota understand that legal departments can lead and make changes. Some legal departments promote diversity, but if you look behind the curtain, their numbers are not that great. That is not the case at Toyota. They live what they preach.”
Three-fifths of the 54 Toyota attorneys are women, while 40 percent are lawyers of color.
Toyota instructs its outside counsel handling its matters to track diversity and inclusion metrics, which the TL1 legal team monitors through its e-billing system. Using its metrics, Toyota follows how much of the company’s legal work outside law firms give to lawyers who identify themselves as women, lawyers of color, LGBT, veterans and those with disabilities.
In 2018, about half of Toyota’s outside legal spend through its Partnering Program went to lawyers who were identified as diverse timekeepers. TL1 also insists that law firm partners leading the relationship with Toyota be diverse.
“We review these relationships every six months to one year,” Farrell said. “We recognize that the lawyers within a firm who have the most power are those lawyers who have the client relationships.”
“When you think about how the law touches society, it is very broad,” she says. “You get the best ideas when you have more diverse viewpoints.”