Carl Belding. Counsel of Europe
19 November 1996
It is a sign of the times: a Swedish lawyer, who has practised in the US and in various locations around Europe, now works for a US corporation in Paris.
Carl Belding, IBM's EU law specialist, is a good example of the new breed of international in-house counsel. The son of a diplomat, he admittedly had a good role-model - and his career took on an international dimension soon after his graduation in law and business studies in his native Sweden.
In Brussels he worked for a spell with DGIV, the competition arm of the European Commission, then gained a Masters degree in comparative jurisprudence at New York University Law School, while working at the same time with the United Nations in the Institute for Training and Research and qualifying as a member of the New York Bar.
Belding's strategy was simple. "I wanted to be a business lawyer and thought I might eventually go into private practice, so I decided I would work in various other careers, including international institutions and as in-house counsel, and see how I liked them first."
With this plan in mind he joined IBM in the US in 1981, and the computer giant has provided all the stimulus he could wish for, so he has remained there ever since. "I was privileged to join IBM in the early 1980s as the PC was being developed and the computer business was beginning to change enormously. There is constant change in this business and laws have to accommodate it.'
Not only was the choice of industry fortuitous, so was the choice of company: IBM, he says, learned early the advantages of in-house counsel. In the 1950s it settled a large anti-trust case brought by the US government and other high-profile cases followed. "The company has always appreciated that building a strong law department was necessary to defend its vital interests, so lawyers traditionally have had a strong position in the company."
Since joining IBM, Belding has occupied various positions in its legal team. A year in the US head office was followed by three years in Paris working as a lawyer in the European, Middle Eastern and African operations, then five in Sweden heading up its legal department of four lawyers. Three years back in the US was then followed by more anti-trust and intellectual property law experience before he became the company's regional lawyer in the Nordic countries. He returned to Paris in 1994 and is now IBM's senior lawyer on EU and competition law matters.
Belding's varied experiences have provided him with a good vantage point from which to view developments in the in-house legal function. "The in-house role is more advanced in the US than in Europe," he reports. "Possibly it relates to the cost of legal services there and litigation in particular. But for reasons of both cost and effectiveness, in-house counsel are valued in the US." He believes it is inevitable that over time Europe will move towards the US position of the more widespread use of in-house counsel.
Although external counsel may view such developments with trepidation, Belding is optimistic about the future relationship between external and internal counsel and believes in deepening the ties with the use of devices like secondments to and from internal departments. "External counsel will benefit from being briefed by in-house lawyers. And there will always be a need to have external counsel either because you are short of time or do not have the critical mass to develop expertise in a particular field."
His experiences have led him to believe that several factors are essential for guaranteeing that the in-house role can be undertaken effectively. "You need to be responsible for all the legal affairs of the company," he says. Also, he urges, it is necessary to report to the top. "It is best to report to the most senior full time business manager or CEO - though this isn't so common in Europe yet." The third requirement, he says, is to have commitment at board level for compliance with the law and not simply those parts with criminal sanctions. "I think these three things are fundamental to being able to do a good job," he says.
In Europe, Belding points out, there are still external regulatory barriers restricting in-house counsel's effectiveness, some maintained by parts of the external counsel community, probably out of competitive concerns. The lack of legal privilege for in-house counsel in EU competition law matters is one such example, and he has worked as a board member in the European chapter of the American Corporate Counsel Association to change the law.
"It is ironic that Europe has not yet fully capitalised on the in-house counsel's ability to cause compliance with competition laws. The inside lawyer is without doubt the most effective enforcer because he knows the company and the facts best, and is in a unique position to influence company behaviour by pro-active advice."