Apple’s crafty, edgy legal strategy (video)

“I don’t want you to stop pushing the envelope because that’s why legal is an important function in the company.” — Tim Cook to Bruce Sewell

From “Apple’s former top lawyer: $1 billion budget enabled high-risk strategies” posted Monday on Venturebeat:

Former Apple general counsel Bruce Sewell led the company’s legal department for eight years, seeing the company through major lawsuits such as the iBooks antitrust case and Samsung’s smartphone patent trial. Now he’s speaking openly about how Apple has strategically embraced high-risk legal strategies to gain competitive advantages — using a gigantic legal budget to back business decisions that could result in highly favorable or unfavorable outcomes.

Having retired from Apple in 2017, Sewell spoke candidly with Columbia Law School student Doreen Benyamin for a YouTube series titled “Before You Take the LSAT” (via AppleInsider), designed to help prospective lawyers know what they’re getting into before they apply to law schools. In the video, Sewell explained that his job at Apple was not to stay clear of the line dividing legally risky actions from clearly safe actions, but rather to “steer the ship as close to that line as you can, because that’s where the competitive advantage lies … you want to get to the point where you can use risk as a competitive advantage.” A legal team becomes an asset to a company when it can help it venture as close to a blurry legal/illegal line as possible, he said, and then manage the “nuclear” situation if it gets into trouble.

Sewell suggested that the keys to a high-risk legal strategy’s success are proper funding and executive support. When he retired, the company had a staggering annual legal budget of $1 billion — enough to support 350 lawyers simultaneously working on a single big case, such as the Samsung trial, which involved reviewing around 8 million documents and 200,000 billable hours of labor, to say nothing of the company’s other cases. Apple CEO Tim Cook backed the lawyers through thick and thin, which Sewell said was important “because every so often, you’re going to get it wrong.”

The “very ugly” iBooks lawsuit, which saw the U.S. government sue Apple and book publishers for fixing prices during the launch of the iPad’s iBookstore, was a critical example of getting it wrong, Sewell noted. While he believed Apple’s conduct had been innocent, “there were some things going on amongst a group of publishers that I didn’t know about … But, in the end, I got it wrong. Apple ended up being sued by the government and having to pay a large fine.” Yet Cook was reassuring, saying Sewell had made the best choice he could with the information he had:

You didn’t know about these other things. Don’t let that scare you. I don’t want you to stop pushing the envelope because that’s why legal is an important function in the company.

Cue the (2-year-old) YouTube:

My take: Apple lawyer throws CEO under the bus.

See also: The Apple e-book trial: The view from the hard benches

6 Comments

  1. Lalit Jagtap said:
    Thank you PED. this is valuable and timely. I didn’t not post my reply to the the post by “Friend-of-the-blog Tommo_UK”, but reflected in my notes about Apple legal team. This great commentary by retired LC of Apple, validates my belief that Team Apple knows how to do the delicate dance while operating in China, S. Korea or India etc.

    6
    January 11, 2022
  2. John Butt said:
    “My take: Apple lawyer throws CEO under the bus” However, this is a story for learning lawyers and the comment should be standard practice for any lawyer wanting to be a corporate lawyer: “steer the ship as close to that line as you can, because that’s where the competitive advantage lies … you want to get to the point where you can use risk as a competitive advantage.” was also the mantra inside my company when I was managing pricing in a dominant position – NZ in 1989!

    5
    January 11, 2022
    • Kirk DeBernardi said:
      Nonetheless, isn’t it interesting how this “steer the ship as close to that line as you can” doesn’t endanger your law office’s shipmates.

      So then steer away and get highly compensated for possibly crashing the other guy’s ship on the rocks.

      Ironically, even with a spend of all the kings horses and all the kings men, still no one knows the outcome of the courts.

      2
      January 11, 2022
  3. Michael Goldfeder said:
    He’s the very first fireman that I’m aware of who traded in his turnout coat, padded boots, and 10-day a month 24 hour shifts to go do something else. What a career change!

    1
    January 12, 2022

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