Lucille Karp | Risk, Balance, and Leadership: Insights from a Law Firm General Counsel

Elise Holtzman: Hi, everyone. It's Elise Holtzman here, a former practicing lawyer and the host of The Lawyer's Edge Podcast, where I sit down with successful attorneys, legal marketing specialists, business leaders, and authors to talk about how lawyers and law firms can grow and sustain healthy, profitable businesses.

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I'm delighted to welcome my guest today, Lucille Karp, a partner at McElroy Deutsch Mulvaney & Carpenter, which is located in Morristown, New Jersey, and has about 140 lawyers practicing in 13 offices in nine states. Lucy serves as co-chair for the firm's transactional group, co-chair of the hiring committee, and McElroy Deutsch's general counsel.

After earning her undergraduate degree from Rutgers University's College of Engineering, she received her JD from Widener University School of Law. Lucy's practice focuses on commercial real estate transactions with an emphasis on office, industrial, and retail leasing, acquisitions and dispositions, and real estate financings.

Her corporate experience includes M&A and financings, as well as other corporate counseling and general contract work. Outside her legal work and involvement in multiple bar associations, Lucy also serves on the Zimmerli Art Museum's advisory board of directors. Lucy, welcome to The Lawyer's Edge.

Lucille Karp: Thank you, a pleasure to be here.

Elise Holtzman: I'm excited to talk to you today. As I mentioned, in addition to your real estate and corporate work as a lawyer, you serve as your firm's general counsel. How did you come to be in that role? Is it something that you set out to do, like, “When I grow up, I want to be a law firm general counsel?” Or did it come to pass in some other way?

Lucille Karp: It came to pass in another way. Basically, I had been practicing for over 13 years at another firm before I came to McElroy. I joined McElroy in 2004, and I was not a partner when I joined. I, after a few years, was promoted to partner. As I am a transactional lawyer and have this, I guess, expertise in, among other things, commercial real estate, and we were opening up offices in other states, the firm came to me at some point looking for some help with looking at these leases.

So some of the leases I inherited or the firm inherited from other firms that merged into us or we acquired, but I began working on firm matters that were transactional in nature. We did have a prior general counsel firm for many years, Ronald Riccio, who was a former Dean of Seton Hall Law School, he was in this role of General Counsel.

Ron did not retire as an attorney but retired from the role of General Counsel in 2018, and they asked me to take over in 2018. I was reluctant only because I am not a litigator and I know that part of the role involves professional liability claims and monitoring and strategizing with respect to that kind of litigation, which I didn't have experience with.

But we do have other people here who actually do that kind of work. I have called them like assistant general counsels that help with those kinds of matters. That's how it came to be. It's I guess evolved a little bit over time because shortly after I got into the role, the pandemic came and the shutdown, we had a lot of issues, a first impression, which I'm sure a lot of firms did that came my way. But that's how it happened in 2018.

Elise Holtzman: What does a general counsel of a law firm do? I mean, I think we all have a vague sense or a slightly more than vague sense, but what are some of the things that you think if you were crafting a job description for a law firm general counsel role would go on that piece of paper?

Lucille Karp: Sure, we manage risk. So the overarching job description is you're a risk manager. That would be the same if you were a general counsel of a company that's not a law firm. Of course, just as an aside, one of the first things you really need to understand is that you are representing the company, not any one individual attorney. So you represent the firm in terms of managing risk.

Although folks pop in here all the time and perhaps think I represent them individually, but I don't. I represent the firm. We look at a number of different things in no particular order, like I’ve mentioned initially, I do the transactional work on behalf of the firm. That is our office leasing, general contracts, any financing, I would be a part or should be a part of all of that.

I look at engagement of clients. We have a model engagement letter, but issues come up, questions come up sometimes in engaging clients. The most obvious one, of course, would be conflicts of interest in the engagement. That's an example really of something that typically has to be addressed right away.

What the process would be is you would run, we have an automated system for that and you would run your conflicts. But sometimes, there are cases that maybe were closed a year ago, like there's not an actual current representation going on, but there was nine months ago or whatever and it would perhaps otherwise be a conflict, albeit maybe waivable. But is that a conflict? Because there's no current representation. We look at those kinds of things. That's a regular question.

Elise Holtzman: Well, one of the things that I think is interesting about the conflicts that I wasn't aware of, even as an attorney, is how complicated this stuff can get as you point out, and last year, I traveled to speak for one of the largest malpractice insurers in the country, and they had general councils and managing partners in the room. I mean, like 250 people, the entire conference was just about conflicts, managing conflicts.

I think most lawyers don't sit around thinking, “Oh, there are so many of these things that come up that you need entire conferences on this stuff.” But it's a very complex thing. I imagine, as you say, it comes up constantly and takes a lot of time.

Lucille Karp: Yeah. It might not be obvious. This is why really a general council should really, in my opinion, know the firm really well. Having been here a while, I'm very familiar with the various practice areas and the kinds of clients that we have because there could be conflicts that are like relationship conflicts. They're not actual conflicts that would come up in a conflict search, but they might be an important vendor of ours or our banker or something, we're not going to want to sue them necessarily. That creates a whole discussion.

Also, of course, we have issues where we represent some state agencies and even if it's a waivable conflict, they can't waive. You really have to understand the client base and also just in general, the relationships that the law firm has with third parties because those sorts of things are considerations in analyzing conflicts. I don't know if relationship conflicts came up in your meeting, but that is an issue.

Conflict is a big thing that definitely takes up time. The transactional where ethical issues come up, we've been really fortunate in that regard, but still ethics questions come up just sometimes because clients are just unhappy with an outcome. It could come up. I don't look at those as much fortunately but they do come up occasionally. Terminating relationships with clients or withdrawing from a case, they come up again, that's not like a weekly thing, but they come up in the time frame that I've been doing this, it's come up.

Monitoring any professional liability claims and litigation, so interfacing and strategizing with the outside counsel that represent us in any of those kinds of cases and also keeping our insurance company and advisors updated on cases. That's another part of this. It sounds like it could be a full-time job.

Elise Holtzman: I was going to say, and I think that for some firms, it probably is.

Lucille Karp: Yeah.

Elise Holtzman: How much time is devoted to your general counsel role versus your practice and your other administrative responsibilities? I mentioned that you're a practice group leader, you've got other things going on, and this could definitely be, I’m picturing people, like a constant stream of people walking into your office virtually or in-person to discuss these things with you. How do you balance it?

Lucille Karp: It's really interesting, but sometimes it's very busy in the general counsel's office. Then there are days where I don't hear from anybody, but I would say it's at least 30% of my personal time. That's not including any of my partner's time that may be involved with some of the litigation matters.

Even though I'm not a litigator, I like to know what's going on and I'm copied on everything, I read everything. I will read motion papers, drafts of briefs, all of that. But I do like to have actual people who practice in that area look at these things as well. So my time isn't all the time that is devoted to the general counsel's office. There's definitely more than my time, which is at least 30% of my time is that.

The practice group administration, I have a co-chair with me. So between the two of us, we managed that. Our group is a very manageable size of people and we're not in all those offices. We’re really maybe in like three of the offices, the people that practice in my area. It's easier to manage that, obviously. I don't really have a percentage, that depends, but it's less than the time that I devote to the general counsel role. The rest of it is my practice pretty much.

Elise Holtzman: Do you find that these roles complement each other or do they sometimes create conflicts or conflicting demands?

Lucille Karp: There are two things. It's from the transactional perspective. In a way, the firm is like any other client of mine, it complements, it's not problematic at all. I haven't really run into what I would call conflicts. Again, it's sometimes time conflicts because people really are very demanding. They need to know “Is this a conflict?” or they're freaked out by some communication from a client that upset them for one reason or another or whatever. Like they want to talk to me right away and they want an answer as soon as possible.

I do really try to prioritize, so sometimes prioritizing can be challenging, but really try to prioritize those questions and get answers to people, in most cases, in less than 24 hours.

Elise Holtzman: What are some of the biggest legal risks that you think law firms face today or that you see coming down the pike?

Lucille Karp: I think, and I've seen it at our state bar convention as a topic, I even took one of the classes that they offered, a continuing legal education program in the use of AI in our practices. At McElroy, people may look at AI, but they're not relying on it to do any of the work here. Not at this point in time because there were so many examples of attorneys at other firms using ChatGPT and getting citations that were perfect Bluebook citations to cases that actually didn't exist.

It's too scary still to really rely on AI, but it's still a resource and I think that law firms are going to move more into AI over time as these tools are refined. I think that's a big thing, technology for sure.

Elise Holtzman: It sounds like there is a crossover or what we might call a Venn diagram between some of the work you do, the decisions that you're making as general counsel, and what the role of a managing partner might be or the management committee might be. How do you think that those in management, managing partners and management committees can work most effectively with people in the general counsel role?

Lucille Karp: We're advisors, so we don't have the decision-making authority. I feel very fortunate because I do communicate with my executive committee regularly. It's not in a formalized way, we don't have scheduled meetings, but it's like anytime, they call me anytime, I can call them, it's like a very open-door policy.

Some firms may do it differently and may formalize that more with regular meetings and reporting and that kind of thing, but we've known each other, I've been here over 20 years and so I have direct access to those folks, but the access is very important. The communication, feeling free to say something even if it's critical, you shouldn’t feel like you're jeopardizing your career or something because you have something negative to say.

I mean, I've had to tell members of my executive committee that they have a problem like with a conflict or something and they can't take the case kind of thing. There's this little hesitation of a feeling inside before you do it, but you just have to do it. There's definitely a Venn diagram, but we're more advisors than I would say decision-makers. It's really accessibility that's very, very important and feeling like you can say what needs to be said, even if it's uncomfortable.

Elise Holtzman: While you were talking, what popped into my mind for me is that in many companies, I think it's getting better, but in many companies, the business side will see the general counsel's office as the department of no.

Lucille Karp: Yeah, that's right.

Elise Holtzman: Right. What do you think the philosophy needs to be when you're in this role in a law firm? As you said, you're dealing with other people. You don't necessarily want to give them bad news. What is your philosophy when it comes to making some of these decisions or passing along this information? How do you maintain the relationships you have with these folks while sometimes delivering news that people in general or specific people may not want to hear?

Lucille Karp: It's in my everyday practice, it kind of mirrors how I handle that because I'm not so overarchingly conservative that I'm like a natural deal killer. But at the same time, I will point out all the risks of what could be a bad decision and hope that the client sees the rationale and the common sense way to approach something.

That kind of skill of balancing, wanting to make something happen, but tempering it with what is the ethical way to handle something, complying with our roles of professional conduct, of course, I'd like to see, let's say some new business come in here. At the same time, you have to balance that and you have to look at the totality of the facts of the circumstances.

Guess I may, if I have to lean one way, I am going to lean the conservative way in the general council role. It is still my home here too. I tend to be more conservative, maybe a little more than I would be advising a client transactionally, but it's a similar skill of looking at every which way of a circumstance and determining what all the risks are. We advise clients in our private practice about risk all the time. It's like that. You just have to sort of balance it. It can be really challenging. It can be. But at the end of the day, I don't second-guess myself.

Elise Holtzman: That leads me to the next question, which is, for private practice lawyers who may be interested in taking on a general counsel role within their firm, what skills, experiences, or even character traits do you think that they should prioritize? What are some good pieces of advice for somebody who wants to step into this role?

Lucille Karp: Responsiveness is very, very important. You have to be responsive. Resourcefulness is also helpful because, again, I happen to think I'm very resourceful so I know who does what here, what kind of clients we have, or who to go talk to about a certain thing, who has expertise in a particular subject matter, all those things.

So being resourceful is also important. Being a negotiator, somebody who can manage a lot of different personalities, having the courage to have to tell people no sometimes or telling them something they don't want to hear. Having that courage of conviction is important as well.

Definitely, I've gotten into some heated things at the moment, but always in the end, I feel like I'm still friends with these people that I work with, even when we don't always agree. I have found that if I tell them something they don't want to hear, they abide by that. People don't go off willy-nilly and just do what they want to do.

But I do think the negotiating skills are very, very important in this role. Smaller firms than McElroy have somebody in at least a part-time general counsel role or maybe their managing partner acts as a general counsel.

I think it's maybe not mandatory to have them. I think it's really important. I definitely think firms that don't have them should consider it or at least consider being the managing partner also carrying that role.

Elise Holtzman: I guess if that's the case, you've got to be able to know which hat you're wearing.

Lucille Karp: Yeah. Really, again, it depends on the size of the firm, but I'm sure in a smaller firm, the management of the firm wears a lot of different hats. But the best way to do this, I think, is if there is a management committee and executive committee, there's a general counsel or a general counsel's office that is advising them.

But not every firm is structured like that or that big, that would have that kind of structure, but I definitely think there's somebody that should be out there. There's our State Bar in New Jersey has more, recently at least, at the Bar convention offered classes, CLE on why you want a general counsel and what a general counsel does.

I think if people are considering it, they should take those courses that are offered through the New Jersey State Bar because I think that our world's becoming so complicated. Like I said, I mentioned at the beginning, just the pandemic and all those issues that came up that were like first impression type things, it is a good idea to see what other firms are doing out there in terms of risk mismanagement.

Elise Holtzman: I actually want to get back to that in a minute because I want to ask you about what kinds of resources there are for someone in that role, but a couple of things struck me. One is that a general counsel really needs to understand the business of the law firm.

It can't just be you're looking at a statute or an ethical rule and operating in a vacuum. Presumably, you really need to understand the overall structure and goals and maybe bank accounts and risk tolerance that the firm has.

Lucille Karp: I think that's right.

Elise Holtzman: Also, it seems like being able to compartmentalize a bit is probably a good idea. It's funny because I'm talking about this idea of seamlessly integrating it with whatever the culture of the firm is, the risk tolerance of the firm, and what the business of law looks like.

At the same time from a personal perspective, as you mentioned, you may be in a position of having challenging conversations with people, but you do still want to remain friends with these folks. Maybe a little bit of compartmentalization for everybody is not a bad thing.

Lucille Karp: Yeah, I think it worked out well. You know, I can't complain. It's worked out well so far. But I think again, some of it perhaps is just my natural personality and the relationships I built over time here. When I became general counsel, I had been at the firm for 14 years.

Elise Holtzman: That was another thing I wanted to ask you about because you mentioned this idea of really knowing the firm. How effective do you think it would be for someone to bring in somebody from the outside and on day one say, “Okay, you're going to be general counsel of the firm?” We know that happens in companies.

Lucille Karp: Yeah, it does. There's definitely and I've seen it, my husband has been a general counsel of a company. You don't come in knowing everything, but you have to learn everything. Bigger firms that have general counsel offices that have staff, they hire just for that office.

They are not otherwise practicing attorneys like a number of the big firms in New York have that kind of structure. Those folks come in and they don't know the firm. They don't necessarily know the philosophy and you just are going to be trained like you are at any other job. But I think that for me, it made it more seamless and it was definitely easier to do it.

Elise Holtzman: Right, it certainly sounds like a nice to have.

Lucille Karp: Yeah, for sure. But if it's a company that has a general council and maybe other staff and somebody new is coming into that assistant type role, they're going to learn from those folks like you would in any other company. Maybe they've done it somewhere else at another firm too, who knows?

For me, it was just that having been here a long and just being the type of person who wanted to know what other people did and just talk to a lot of people and understand the firm and the firm dynamics, I think that that really helped me a lot.

Elise Holtzman: I said I was going to ask you this next question. We know there's a lot of support out there these days for all sorts of different roles in the legal profession. Are there organizations of general counsel that provide education and support for those in that role?

Lucille Karp: Oh, yeah. Well, there's a really good group that my firm is a part of, that's the General Counsel Roundtable. It's a great group. For example, if you had a question about something, you could ask the hosts of this, which is a company called, I think, Legal Management Resources.

They will pose the question to the group of general councils. It could be about AI, it could be about anything, and people respond anonymously. They ask survey-like questions all the time, but then you get a consensus of who's doing what without necessarily naming names.

Sometimes somebody just asks a question of the group and people answer, "This is what we do. This is what we don't do," or whatever. That group, they're great. They do have meetings. They're a national group, so they will have meetings in San Francisco, Chicago, Wilmington, Delaware, and Boston.

Once a year, they have something I'll call it like general counsel school and they do that down in Washington DC where this organization's headquartered. That is normally done in the fall, but you could go back. It's really meant for probably people who are newer to the role, but you could go back and get a refresher course.

That's like a two or three-day program. That's great, but they're always available. It's a really great group in New Jersey. A number of the firms just on their own organized what I'll call a networking group. Sometimes we've gotten together in person at one of the participating firm's offices or like we've gotten on a Zoom call or whatever.

That's not a regular thing and to a lesser extent, folks may email in that group questions. But that is available. The other group for firm my size, we really fit well into that group. They have like a large firm group, and then they have like a what I'll call mid-sized firm group, which McElroy falls into. It might not make sense for a very small firm to be part of the general counsel roundtable, but certainly maybe to take that course that they offer once a year.

Elise Holtzman: Well, it's often said that it's lonely at the top so I always love when I hear that there are places to go that if you do step into this role, or if your law firm is finally creating a role for the general counsel that's a little bit more formal than what they've done in the past, that there are a lot of resources out there for you.

Lucille Karp: Yeah, and I'm happy if any of the listeners want to know more about that particular organization or the group of general counsels that are together in New Jersey like their own group. I'm happy to give that information to anybody.

Elise Holtzman: Fantastic. Lucille, as we wrap up our time here today, there's a question I ask all of my guests at the end of the show, and it goes like this: There's a phenomenon called the curse of knowledge where experts sometimes forget that what is so obvious and natural to them is not at all obvious to others.

You've been doing this for a while now, so when it comes to risk management for a law firm, what's a principle or piece of advice that may seem obvious to you, but is important for law firm lawyers to hear?

Lucille Karp: I really think that it's important for law firm lawyers to really stick to the basics, like the fundamentals. Makes you have to run the conflict checks. If there are any questions, you need to talk to the lawyers who represented that client at one time or another and find out, “Is this really a conflict?”

Then you need to go to the, if there is a general counsel, the general counsel's office. You need to have engagement letters. You cannot represent clients without engagement letters, it's just the basic stuff that really prevents problems down the road.

Really a good engagement letter is very, very important. That deals with a number of issues from everything, reimbursement of expenses, and the ability to withdraw if the client's not cooperating. All these things need to be in that engagement letter. It's just basic.

If people aren't sure about engagement letters, the New Jersey Bar offers courses on engagement letters. You really need to just do the basic things. If you do the right things at the beginning, you're more than likely not going to have problems. That's really, really, I think important. It seems so obvious, but you hear stories all the time of folks getting in trouble.

Elise Holtzman: Right. Well, I think a lot of times things that are so obvious get forgotten. Sometimes, as you say, going back to basics and making sure that all of those things are in place and broadcasting that to all of the lawyers in the firm and making it clear that these are our policies, these are our procedures, these are how we do things, are going to head off a lot of problems before they occur.

Lucille Karp: Absolutely, but for smaller firms, it could be just a couple of lawyers, it's the same. It's the same for those folks as it is for bigger firms. You have to do all those things. You have to have really a proper engagement letter. It's really important.

Elise Holtzman: Terrific, all right. Well, that's excellent advice, Lucy. Thank you so much for being here today. It's a pleasure to have you.

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