The Real Lawyer: Lucy Fato (Part 2)

In this episode, Lucy Fato opens up about her bold move from Big Law to the corporate world. She shares why she finally said yes to Marsh McLennan after turning down a previous offer and how trust in leadership played a key role.

From navigating crises at S&P Global to balancing legal, HR, and communications at AIG during the pandemic, Lucy’s story is one of resilience, problem-solving, and staying true to her values. She also offers insights into what it means to lead with integrity and how legal leaders are stepping up to tackle today’s biggest challenges.

Join us for this inspiring conversation, and stay tuned for Part 3 as Lucy dives into her current role at Seaport Entertainment.

Transcript

Speaker 1 (00:03.15)
Welcome back to the Real Lawyer podcast. I'm your host, Joyce Sophia Hsu. And you're joining me for part two of my conversation with Lucy Fatal. In our last episode, we talked about Lucy's path to law school and her successes as a capital markets partner at Davis Polk. In this episode, we're going to talk about Lucy's transition from big law to big corporate.

Speaker 1 (00:36.012)
Now, Lucy, everything was just smooth sailing with you at Davis Polk. You made partner fairly early and you had huge successes as a capital markets partner there. Now I'd like to talk about how you transitioned from Davis Polk to going in-house.

Yeah, well, you know, an opportunity came along at Marsh-McClennan where I ended up spending nine years as the Deputy General Counsel and Corporate Secretary. interestingly, I had been offered that position a few years before with a different management team and I turned it down because I had only been a partner for a couple of years and I wasn't quite ready to leave. And I didn't really know the people that well. And so it wasn't something I was comfortable, you know, leaving a place I had been.

you know, for so many years with people that I knew to go work with people that I didn't know at all, just didn't feel right. But then Marsh MacLennan had a lot of issues when Elliott Spitzer went after the insurance industry and pushed some people out, including the CEO of Marsh MacLennan, who was Jeff Greenberg at the time, Hank Greenberg's son, and

Marsh McClennan brought in a whole new management team, including a new general counsel who was Peter Bashar, who was married to Sarah Bashar, who was one of our partners at Davis Polk. So I had known Peter my whole career because Sarah was a few years ahead of me. I met Peter as the spouse of Sarah. She was a capital markets partner as well. I did a lot of deals with her.

Thank you

Speaker 2 (02:09.429)
I covered for her on one or two of her maternity leave. So he was someone I had known for a very, very long time as the spouse of a colleague who I liked and respected and had learned a lot from. And he needed a deputy who had a strong corporate background because he had a lot of litigation and regulatory matters to clean up post-Spitzer. And so we had had a couple of conversations and I was trying to help him think about who he could put in the role.

And he said to me, you know, I'd like someone like you, Lucy, you know, what would it take for you to take or someone like you to take this job and leave a partnership at a firm like Davis Polk? And I said, I don't know. said, you know, being a deputy is, you know, going back to doing 10 Qs and 10 Ks. And I'm kind of past that at this point. Not that I don't like doing it. I do. And it's my core skill set.

But I said it's one thing that's attractive is that this role has a lot of other things that report into it. Employment law and procurement, people that cover procurement, IT, that kind of stuff is way before the cyber and privacy days. I said, don't know. I said, maybe if you made the person the corporate secretary to the board so they'd have direct access to the board and maybe they're not part of the executive committee, but they have access through the board role.

Governance was becoming a very important topic after Sarbanes-Oxley, after Enron and WorldCom. And so was kind of the early days of a governance community coming together, which I was part of. And I said, I think maybe if you make the person the corporate secretary, that could be appealing. And Peter said, well, I have no issue with that at all. Like, I don't know anything about that stuff. And I'd be more than happy to let someone else.

you know, obviously I'll go to board meetings and I'll be involved in everything, but I have no problem letting someone else kind of run the whole thing and, you know, setting the agendas and getting materials out and interacting with chairs of committees and all that. And I said, well, I think, you know, I think that's a very appealing job. And then he said, well, will you, will you take it? And I was like, what?

Speaker 2 (04:25.838)
I thought I was just helping you with this. didn't know I was like under consideration and then it dawned on me that his whole plan had been to get me because he knew me and there was comfort and bring just like me going there not wanting to go somewhere where I didn't know the people. He knew this was a big job, an important job and he knew that he was going to have a lot of litigation and regulatory stuff to deal with and so he needed someone who really knew what they were doing and so and Davis Polk was

fine because Marsh McLean was a client and they were literally right down the street and they did all the capital markets work. And so it was kind of like a no brainer at the end of the day. And so I was like, I guess yes. Now that I have told you what I think it would take, how can I say no? So I did it and I never looked back. I never, ever, ever looked back. I loved the job. It's a wonderful company. It still is to this day.

Not to say that it was a walk in the park. Our first couple of years were very, very difficult. It takes big companies a long time to recover from a big regulatory hit. It really does. It doesn't just happen overnight if you change out management. There's a lot of work that needs to be done. There's usually a lot of cultural change that's required. There's often difficult conversations with board members where it's time for them to move on and bring in new people, fresh blood, and build for the future.

And those are not easy things to do, but I somehow found it.

I found it easy to play that role. Like it wasn't hard for me. And especially when I was the deputy GC and not the general counsel and part of it gave me a little bit of distance and it gave me a little bit of air cover because my boss supported me a hundred percent and the chairman of the board supported me a hundred percent. and they were thrilled to have someone that wasn't afraid to have a conversation with people and say, you know, maybe time to think about, you know, what your tenure is here.

Speaker 2 (06:31.16)
given how long it's been and the changes we need to make and the different kinds of skill sets that we need. We had a couple of hostile takeover attempts, we had activism, things I had not really dealt with. And at that point in my career, I actually liked a little bit of rough and tumble and especially when I won at the end of the day or we won, the team won. I loved working with finance teams. The finance team at Marsh-McClennan, they had saved the company. They were fabulous, fabulous. And I found that

When you bring a good legal department and a good finance department together, it's amazing. We did amazing things at that company between legal and finance, my team, their teams. It was fun. Even in the darkest days, we would go and have dinners and laugh and find humor in things, you know, in dark times. It was a wonderful experience. And then I got married. I had two kids while I was there. Everybody was so supportive.

I was fortunate, there are some pros to having children later in life and that, you know, it was pretty established in my career. so people were thrilled for me and happy for me. And I was able to go off and do that not once, but twice and came right back into my role as if nothing, no time had gone by. And it was a really great time. It was a really great time and it's still a great company. also taught me that when you bring in great people, as we did,

when we brought in a new CEO, a guy named Brian Dupreau, when you bring in great leaders and the right leaders, they don't just fix a broken company, they set it up for success long past their tenure. And I learned that at Marsh-McClennan. I saw what the great leaders there did in terms of positioning that company where even today it has an excellent board. I view it as one of the best boards in the Fortune 500.

I know what their governance practices are. I know how they do certain things because a lot of what we put in place back then has been carried on. And the general counsel there now is wonderful, someone who Peter and I hired. And so she continues to do a lot of the, I mean, the company's changed and I'm sure there's a lot that's different, but it's still a great company. And I give a lot of credit to people like Brian.

Speaker 2 (08:57.245)
and Peter Bichard who laid a great foundation for the future. And I think that's a real testament to what it means to be a great leader. It's not just about your tenure, it's about what happens when you leave and how do people carry it forward. So it was a great, great experience. But what I found is I liked being part of the decision-making process. And when you're outside council, you...

aren't necessarily you give advice and you give people options, but you're not really the decision maker. Although in hindsight, I remember many of my banking clients saying to me, know, Lucy, what we like about you is you help us make decisions. You don't just say you can do A or B and then you walk away. You say you could do A or B. And if I were you, I would do A for the following reasons. And then we would say, well, but what about this? And what about that? And I was like, okay. Well, now you're giving me new facts.

now maybe we should think about option B a little bit more. And then we would work through it together and they would ultimately make a decision. And then I think what helped me be a good general counsel and deputy general counsel was that I've always spent a lot of time with outside counsel. I make sure they really understand what's going on and what the dynamics are internally, whether it be board dynamics or executive committee dynamics, because outside lawyers are only as good as you make them. If you don't give them all the facts,

their advice may not be the right advice and it's not their fault. It's just that they don't have all the facts. So it takes a lot of time, which is probably why I work too much. But I think you need to make that investment in your outside counsel in order to make sure you're getting the right advice for the company. And I've learned that lesson over and over and over again, that when I invest the time, I get a better result at the end. Everybody gets a better result.

Yeah. I don't know, Lucy, if you've ever heard this term grid worker.

Speaker 2 (10:59.342)
I've not.

It's something that I had just heard recently and it was described as someone who wherever they go in life, whether it's to a different town, different state or different company, they just light up the energy grid around them. Listening to you talk about your experience, it made me think that Lucy is definitely a grid worker.

No.

One thing is that I also love how you have a very clear idea of what it takes to access that grid, right? So you, when you were describing the perfect job that would be enticing to a talented lawyer to join Marsh McLennan, you were already thinking about, you know, what kind of access would the person have to the board, to the nerve center of the company, et cetera.

And then going in-house, then you were able to bring all these different parts of the company together and help move it in the right direction. You're definitely a grid worker. And I think wherever you go, the place benefits from your presence and your judgment and your leadership. Your professional trajectory just kept growing and you went at some point, I forget what year was that you moved from Marsh to SMP.

Speaker 2 (12:29.453)
2014. Summer of 2014, I was recruited to be the general counsel. It was McGraw-Hill Financial by then. They had not changed the name to S &P Global yet because McGraw-Hill Financial had been more of a conglomerate. It had different businesses and then eventually they sold off the education businesses, which was sort of the legacy business. And then it really became businesses that were tied into the rating agency or

Okay.

Speaker 2 (12:57.646)
linked to the rating agency business. So they renamed it S &P Global. That was after I left. So when I was there, it was called McGraw-Hill Financial. I was brought in there to really to resolve an existential problem for the company. mean, after the financial crisis, they had been sued because of ratings that had gone from AAA down to junk overnight. And the government various

state and federal government agencies accused S &P of fraud. That what they had done was really pay to play, that people had paid to get the investment grade ratings and they should have known that they really weren't. And the company had been fighting that litigation on First Amendment grounds for a long time because they had always successfully taken the position that ratings are opinions and you can't sue someone for their opinion.

And eventually that just started to fall apart because they lost the motions. The DOJ case was a firee case, which is a fraud case. And so that kind of goes out the window with the fraud case. And so it became very challenging for them. They tried to get all 20 states. There was the SEC in two states and then the DOJ and 20 other states. They had tried to put all the 20 states into one multi-district litigation in one place.

and they lost on that. So they were then litigating in 20 separate states in addition to dealing with the DOJ, the SEC, and two other states that were aligned with the SEC, which just was untenable and just not sustainable. The amount of money on legal fees alone, management distraction, the reputational damage from all of that.

And so they had a general counsel who was retiring and they decided to look for someone with a very different skill set. They were originally looking, you know, the funny story there, which is why I think everything happens for a reason in life, is that they were looking for someone with a strong litigation background and potentially someone who had been in and out of government who might've been able to, you know, maybe knew people at the DOJ or the SEC. And we all know people like that who have gone in and out of government service and are well connected and do litigation.

Speaker 2 (15:16.166)
And so they were looking for a litigator and they had hired a headhunter who had been making phone calls to people. And several of those people called me and said, Hey, I got a call about this job. I told them they're looking for the wrong skillset that if they want to settle this stuff, they shouldn't be looking for a litigator. Cause litigators like to litigate. They should be looking for a problem solver. And I told them to call you because you solved a lot of problems at Marsh McLennan and

literally three, four, five people called me about that and Headhunter never called. And then a woman who worked at the company at S &P who I had met very randomly at an event I wasn't even supposed to go to, I filled in at the last minute for a colleague, reached out. I'll never forget it. I was on vacation with my husband in Barbados for a wedding and get a call and I'm sitting on the beach and...

She said, know, I'm probably not supposed to know this, but we're looking for a new general counsel and they're looking for a litigator and it doesn't feel right to me. And I remember meeting you at this conference that we went to and hearing your story and Marcia's story and how you guys got out of your regulatory problems and your involvement and all of that. And do you mind if I tell our head of HR about you?

And I said, sure. said, look, I'm always happy to talk to people. If I'm not the right person, I know a lot of people I can make recommendations. And so she passed on my resume. He passed it on to the headhunter who then sheepishly called. And I ended up getting the job and I resolved everything one day shy of my six month anniversary, which everyone told me was going to take two to three years.

Amazing.

Speaker 2 (17:04.907)
That was a great experience. I had never dealt with the DOJ. I'd never dealt with enforcement at the SEC ever. Corp's in a million times, but never enforcement. Never had any reason to go to the DOJ and had never really dealt with state AGs. Cause even at Marsh-McClennan, it was my boss, the GC that dealt with Elliott Spitzer and the fallout from all of that. So I didn't even really get my hands dirty on that at more. I was just helping with other cleanup stuff on the.

you know, how are we going to fund things? How are we going to fund settlements? How are we, you as well as working with the finance team on contingency planning and funding of certain things. I wasn't working on the actual litigation or regulatory matters, given it wasn't my background. So, you know, I just kind of went in and did what I always do. I just followed my instincts. I did a lot of research going in, studied every person that I was going to have to talk to.

and spent my first day calling everybody in the government and just introducing myself. And, you know, I didn't come out and say it, but I basically acknowledged that, you know, they had all the power and I didn't. And I think just that acknowledgement went a long way because the company had been fighting. So I was basically subtly sending a message that I want to find common ground. You know, I don't I don't fight the government. That's not who I am.

And I told the company that before I took the job. said, look, if you're looking for someone to fight the government, I'm not your person. You know, I don't do that. I just, find it disrespectful. And I think people, I think very highly of people who go into government. I know a lot of people that have been in and out of government. They're smart people. They have a lot of opportunities and they choose to give back and do public service. I have a lot of respect for that. And so.

the only way I will do this is if I'm able to build relationships and resolve it in a way that is good for everybody. And so that's how I approached my first day. And like a lot of things, I'm still very close to a lot of people in government who were my adversaries at the time. And we ended up becoming friends. And there was mutual respect. We treated each other professionally. We got to a result that...

Speaker 2 (19:22.38)
gave everybody something to say that was good for them and the company was able to move on. So I was very proud of that, to be able to do that in six months with that many players. I kind of drew a little bit on my &A skills and went back and said, this is a deal. I got to cut a deal with a lot of people. And so how do I figure out, how do I move the pieces around and I can't possibly deal with 20 AGs?

So how am going to get someone else to do that for me? And I got a very nice man, you know, man at the DOJ to do it. name is Stuart Delery, who I still love to this day and adore one of the nicest people I've ever met. He's been in and out of government many times. Most recently as Joe Biden's White House counsel and is back in private practice now. And I told him, I said, I can't deal with 20 states. I'm going to need you to, I'll deal with the SEC and the other two, but.

I can't handle that many people. It's just too hard. And he said, sure, I'll do it. That's what I do. Wow. Okay. Thank you. So he did that. I did the other stuff and then it all came together in the end. And there was no screaming. There was no fighting. There was no arguing. There was really nothing unpleasant about the situat- the process at all. And in fact, I loved every minute of it.

I loved it and I'm still friends with all those people.

It's interesting to me when you talk about drawing on your &A skills, you weren't talking about arguing over commas. You're talking about really real effective deal making skills. Correct. And it almost sounds like you were also being a little bit vulnerable in your negotiation.

Speaker 2 (21:03.936)
No, no, no, no.

Speaker 2 (21:16.834)
No question. Okay, so I was scared to death. I was unreasonably scared to death. I had this notion. I was convinced I was going to get arrested when I went to the DOJ. I don't know why. I just had this fear because when you go to the DOJ, it's very, I don't know if people have been there or not. It is very intimidating. So first of all, since 9-11, they drop you off two or three blocks away. You can't get dropped off in front of the building for security reasons.

So you have to be dropped off two to three blocks away and then you walk to the DOJ. Security, whether it needs to take that long or they're just doing it on purpose to scare you, takes about 45 minutes to get through. Now, maybe it was just slow, know, busy days when I went, I don't know, but every time it felt like it took forever and that they were basically doing a background check, like on everybody that was going through. And then you go up to this, you know, big floor.

I remember it, gorgeous building, gorgeous floor, because it was the main floor. I mean, I was dealing with, you know, the guy who was in charge of the civil division, which is a big job, sits on the same floor as, you know, the attorney general. And so you walk down this big wide hallway with this red rug, American flags everywhere, guards with guns.

everywhere. How do you not be intimidated? Unless you go there on a regular basis because it's your job to negotiate. I had never been there and I never planned to go back there again ever in any capacity unless someone throws a party and invites me. But I was intimidated. I walked down and it was a long hallway. mean, they make you think long and hard as you're walking down that hall. Like, what are you going to say?

How are you gonna present yourself? Like, how are you gonna introduce yourself? And so I just walked in and looked at Stuart and was like, boy, you people really know how to intimidate people here. Which was probably not from a litigation standpoint, like the strongest move one could make, but like, that's how I felt. I was like, I'm scared. I feel like I could be arrested at any moment for any reason.

Speaker 2 (23:31.63)
but I had never been there. I was like a fish out of water. It was not my comfort zone, but you know, it didn't take long for me to realize that the people on the other side of the table were actually professional. They were smart. They knew a lot more about the case than I did because they had been dealing with it for a long time. And so I did a lot of listening. I let each of them speak and tell me their views vent about what had happened, how unhappy they were about how certain things had been done.

And so I did a lot of listening. And at the end of the day, the amount of time we spent negotiating was not that long. I didn't realize it at the time, but what happens is I was expected to make some kind of offer, and then they put you in your own room while they talk about your offer. And then they bring you back and say, no, that's not enough. You need to do more, and we think it should be more like this.

And then you go back to your room. And so the amount of time we all actually spent in that room together was very small. Interesting. But then the side meetings start to happen, right? Starting to meet just me with my counterpart. You know, maybe an AG comes out and tries to work through an issue. And so it was very interesting to see how those kinds of things get done. It was different from the way we did things in the corporate world. Yeah. But I liked it.

And at the end of the day, it ended up being, you know, one-on-one discussions and being a straight shooter. And everybody gives a little bit to get to the right place. And it's really strategic, you know, what is it that they're really looking for? Like, what is the number that they need because they have so many mouths to feed and what is the language they need to satisfy themselves that they've done their job?

And so that's really the trick. All the rest is just anybody could negotiate the rest of the settlement agreement. you kind of have to just get to like, what are the things I can control with these people that have the power to say yes or no? And it was the dollar amount and certain language that they wanted. And that was it. The rest didn't matter.

Speaker 1 (25:47.894)
Well, so within a little under a decade that you had left Davis Polk, but you were already like, you've moved past this role of a capital markets partner and really left that in the dust. mean, you've really grown and expanded so quickly. And I feel like there's no stage, there's no company too big for Lucy Fato. know, there's no problem being for Lucy Fato.

That's so impressive.

Well, I do like problem solving. And when people ask me what I do, I tell them, I mean, I think of it, you talked about a grid worker. Um, I, I always refer to it as that I connect dots. I think that's one of the talents that I have. I honestly don't know where it comes from. I don't know if it was law school training. I don't know if it was Davis Polk training or whether I was just born with it, but I just, I

do you feel like I have an ability to see the big picture and not just look through things with a legal lens? Because when you become the general counsel of a large public company, especially one that's high profile and is in the news a lot, not often for good reasons, you realize that there are multiple stakeholders. It's not just about getting a lawsuit done, then how are you gonna communicate? What are your investors expecting?

Is the stock gonna tank because you overpaid or because there are constraints on the company going forward? What are the rating agencies gonna do? Are they gonna downgrade you because of this settlement and what it requires you to do? And so I think that's where my capital markets background really helped because I think in capital markets, you think about a lot of different stakeholders, right? I gotta protect my client, usually the banker from liability.

Speaker 2 (27:40.14)
We all want to protect the company because that protects the bankers. We got to write the right story for the investor community so they understand exactly what they're buying. And it can't be too legalistic. It's got to be business. So you have parts of a prospectus that are very user friendly and plain English. The box as we still like to call it with the summary of what the company does.

And then you got a hundred pages of risk factors that nobody reads or understands except plaintiff's lawyers. And then you have 300 pages of financial statements that some people read and some people don't. But it all comes down to that little box at the end of the day. Do you capture someone's attention enough to make them want to read other parts of the perspectives? And so I think that

forced me to think about, you know, who are all the different people and then the SEC is going to read it and what do they think? And then if there's ever litigation, a plaintiff's lawyer will read it and how are they going to interpret it? And so I think the capital markets thing did help me learn about connecting dots. And then as I progressed in my career in other places, I worked at a private investigative firm, Nardello & Co., which was fabulous. I was out of the public eye, but it was like a whole new set of

experiences and I learned a lot about things you would never even think about in your day life that are just, you know, people in the intelligence community work on. Sometimes they're public, sometimes they're not. It was very global in nature. So I learned about a lot of global issues. And then, and then I was at AIG for six plus years and there, you know, there were a million things going on all the time, just given the company's history and

the amount of turnover they had had and the turnaround that needed to occur. And so I think I just was constantly, know, and in AIG, I ran communications at one point. I was the interim head of HR a couple times. And so I think that just was constantly expanding the notion that as a general counsel, you actually have a lot of constituents you need to think about.

Speaker 2 (29:47.694)
You're more like a CEO and CFO in that way than you are like other functional groups because you have to protect a lot of people. You have to protect the company. You have to protect its stakeholders. You have to protect the board. General councils are very unique. We are not the CEO's lawyer. We are not the CFO's lawyer. mean, if everybody's aligned, it's all good and happy and everybody plays nice in the sandbox, but...

You know, at the end of the day, a general counsel, you know, we've got up the ladder reporting, as you know, if we think there's something wrong going on or something bad and you go up the ladder and there's no answer, you keep going up the ladder and then eventually, you know, you may need to leave or go to the SEC or, you know, whatever it is you think you need to do. So I think the general counsel job I learned once I got in it,

And even at Nardello advising general counsels and working with partners in law firms that were advising general counsels, you realize that our responsibilities are quite different than other executives because we do have this professional code and ethical code that we have to abide by that makes us an insider, but yet we have to be objective, right? And the outside looking in as well.

That's a hard thing for a lot of people to do. Some people do it better than others. We've seen a lot of companies that have fallen down because bad things happened. Enron's good example. I still remember this day a big article that was written where the headline was, Where Were the Lawyers? I always remembered that, Where Are the Lawyers? Something goes wrong. People don't always say, Where was the CEO? Maybe they say, Where was the board?

Maybe they say, was the board? Right. Yeah. But it's always where were the lawyers? Where was compliance? Right. So people know we have this special role in organizations. And so there's a lot more pressure, I think, on the work that we do. And that's why understanding who all the stakeholders are is very, very important and not something that other people generally need to think about. Like I don't.

Speaker 2 (32:10.796)
Look, head of IT has a lot to worry about, no questions, especially in this day and age, but I don't think they have to worry about, you know, a lot of things the general counsel has to worry about.

Yeah. Being the true gatekeeper. Right. In so many different ways. And, and also when you were AIG, you were helping to shepherd the company through the whole pandemic experience as well.

that was crazy. What a crazy time. I still it's weird. It's like a weird time warp. Like sometimes it feels like it was years ago and then other times it feels like it just happened and we're in it. And so it's a very, I will say we will look back many years from now and still think like, wow, did that really happen the way it did? The world just shut down.

I mean, literally just shut down and we thought two, three, four weeks, never did we think it was going to be what it was. But having to deal with all of that and I think that was really the moment in time where CEOs had to step forward in a way that they never did before. So people, employees really like, I saw it firsthand. They look to their CEOs. What does this mean? Are we going to be okay?

Is our company going to be okay? Like, what does this all mean? And you saw all these CEOs having to come out and talk about it. And then you had Black Lives Matter that happened and then anti-Asian hate that happened. And you had a lot of things that fell out of COVID where CEOs were put in a position of having to speak to the issues because people didn't necessarily view politicians as telling them the truth or being fully honest or

Speaker 2 (34:06.08)
or at least being able to bring it down to a level where, you know, maybe they can tell you what to do about a vaccine or not, but they can't tell you what to do about your job. And so I think that was sort of a moment. And that's why I took on communications at AIG, because then we had to think about everything we said, you know, people were very focused on business interruption insurance, regulators were very focused, Washington was very focused, other governments were very focused. What are you going to pay out on? What are you not going to pay out on?

So we couldn't just put notices out to our employees all over the world and not expect those to be made public. And we couldn't say one thing to one group and say another to something else. And so it all had to be coordinated through the lens of the regulatory environment we were in. And that's why I was asked to take on that role at that time. But I do think it was a very unique time where CEOs were asked to speak up about topics. That was a very interesting moment.

in time and I think we might be moving into another period where CEOs are going to be asked to step up and say more again about certain issues and what do they mean and what does it mean for us and that sort of thing. So I think the responsibilities on a CEO who relies on a general counsel a fair amount is

going to be very hard. Again, it's hard to stay under the radar. If you're a Fortune 500 company, it's very hard to stay under the radar. And even if you're a smaller company or if anything else, your employees are going to look to you and say, well, what does this mean? What does that mean? What does it mean for us? What does it mean for our business? What does it mean for our industry? So I think we're moving into another one of those periods like we did in COVID, where there was a lot of uncertainty.

Yeah.

Speaker 2 (35:56.598)
And it'll be interesting to see how CEOs handle it this time around because many feel like they got sort of, you know, blasted and had got a lot of negative feedback for having stepped up in the moment and done what they felt was right. And then there was a lot of pushback on a lot of these issues.

Yeah, I think it's going to depend in a large part on what kind of general counsel, what kind of advisors they have around them and what kind of judgment that these people have.

Yes, it will be. I think lawyers will continue to be very important players in politics, in democracy. We already see it from the Supreme Court. But I think it's, you know, the DOJ, White House counsel, all the role, the important general counsels of all the cabinet members. I do believe that the legal community will

incredibly important.

Speaker 2 (36:57.578)
once again, it's always been the case regardless of what party's in power. But I do think the lawyers will bear a lot of the burden of making sure that things are being done in a way that's appropriate. And we'll see how that goes. Yet to be seen.

Yeah, yet to be seen. And it's part of my hope for having this podcast doing the show is to hopefully inspire people to get into a career in law because lawyers really play such a critical role in building our society and keep pushing things forward.

Speaker 1 (37:44.056)
That concludes part two of my conversation with Lucy Fado. Thanks for listening. It is such a pleasure to be able to share this conversation with you because to me, Lucy is just such a maverick in her field and such an inspiring and deeply compassionate leader. I hope you will join us again on Friday for part three of the conversation. Until then, be well and be happy.

you

Speaker 2 (00:03.15)

Welcome back to the Real Lawyer podcast. I'm your host, Joyce Sophia Hsu. And you're joining me for part two of my conversation with Lucy Fatal. In our last episode, we talked about Lucy's path to law school and her successes as a capital markets partner at Davis Polk. In this episode, we're going to talk about Lucy's transition from big law to big corporate.

Speaker 2 (00:36.012)

Now, Lucy, everything was just smooth sailing with you at Davis Polk. You made partner fairly early and you had huge successes as a capital markets partner there. Now I'd like to talk about how you transitioned from Davis Polk to going in-house.

Yeah, well, you know, an opportunity came along at Marsh-McClennan where I ended up spending nine years as the Deputy General Counsel and Corporate Secretary. interestingly, I had been offered that position a few years before with a different management team and I turned it down because I had only been a partner for a couple of years and I wasn't quite ready to leave. And I didn't really know the people that well. And so it wasn't something I was comfortable, you know, leaving a place I had been.

you know, for so many years with people that I knew to go work with people that I didn't know at all, just didn't feel right. But then Marsh MacLennan had a lot of issues when Elliott Spitzer went after the insurance industry and pushed some people out, including the CEO of Marsh MacLennan, who was Jeff Greenberg at the time, Hank Greenberg's son, and

Marsh McClennan brought in a whole new management team, including a new general counsel who was Peter Bashar, who was married to Sarah Bashar, who was one of our partners at Davis Polk. So I had known Peter my whole career because Sarah was a few years ahead of me. I met Peter as the spouse of Sarah. She was a capital markets partner as well. I did a lot of deals with her.

Thank you

Speaker 1 (02:09.429)

I covered for her on one or two of her maternity leave. So he was someone I had known for a very, very long time as the spouse of a colleague who I liked and respected and had learned a lot from. And he needed a deputy who had a strong corporate background because he had a lot of litigation and regulatory matters to clean up post-Spitzer. And so we had had a couple of conversations and I was trying to help him think about who he could put in the role.

And he said to me, you know, I'd like someone like you, Lucy, you know, what would it take for you to take or someone like you to take this job and leave a partnership at a firm like Davis Polk? And I said, I don't know. said, you know, being a deputy is, you know, going back to doing 10 Qs and 10 Ks. And I'm kind of past that at this point. Not that I don't like doing it. I do. And it's my core skill set.

But I said it's one thing that's attractive is that this role has a lot of other things that report into it. Employment law and procurement, people that cover procurement, IT, that kind of stuff is way before the cyber and privacy days. I said, don't know. I said, maybe if you made the person the corporate secretary to the board so they'd have direct access to the board and maybe they're not part of the executive committee, but they have access through the board role.

Governance was becoming a very important topic after Sarbanes-Oxley, after Enron and WorldCom. And so was kind of the early days of a governance community coming together, which I was part of. And I said, I think maybe if you make the person the corporate secretary, that could be appealing. And Peter said, well, I have no issue with that at all. Like, I don't know anything about that stuff. And I'd be more than happy to let someone else.

you know, obviously I'll go to board meetings and I'll be involved in everything, but I have no problem letting someone else kind of run the whole thing and, you know, setting the agendas and getting materials out and interacting with chairs of committees and all that. And I said, well, I think, you know, I think that's a very appealing job. And then he said, well, will you, will you take it? And I was like, what?

Speaker 1 (04:25.838)

I thought I was just helping you with this. didn't know I was like under consideration and then it dawned on me that his whole plan had been to get me because he knew me and there was comfort and bring just like me going there not wanting to go somewhere where I didn't know the people. He knew this was a big job, an important job and he knew that he was going to have a lot of litigation and regulatory stuff to deal with and so he needed someone who really knew what they were doing and so and Davis Polk was

fine because Marsh McLean was a client and they were literally right down the street and they did all the capital markets work. And so it was kind of like a no brainer at the end of the day. And so I was like, I guess yes. Now that I have told you what I think it would take, how can I say no? So I did it and I never looked back. I never, ever, ever looked back. I loved the job. It's a wonderful company. It still is to this day.

Not to say that it was a walk in the park. Our first couple of years were very, very difficult. It takes big companies a long time to recover from a big regulatory hit. It really does. It doesn't just happen overnight if you change out management. There's a lot of work that needs to be done. There's usually a lot of cultural change that's required. There's often difficult conversations with board members where it's time for them to move on and bring in new people, fresh blood, and build for the future.

And those are not easy things to do, but I somehow found it.

I found it easy to play that role. Like it wasn't hard for me. And especially when I was the deputy GC and not the general counsel and part of it gave me a little bit of distance and it gave me a little bit of air cover because my boss supported me a hundred percent and the chairman of the board supported me a hundred percent. and they were thrilled to have someone that wasn't afraid to have a conversation with people and say, you know, maybe time to think about, you know, what your tenure is here.

Speaker 1 (06:31.16)

given how long it's been and the changes we need to make and the different kinds of skill sets that we need. We had a couple of hostile takeover attempts, we had activism, things I had not really dealt with. And at that point in my career, I actually liked a little bit of rough and tumble and especially when I won at the end of the day or we won, the team won. I loved working with finance teams. The finance team at Marsh-McClennan, they had saved the company. They were fabulous, fabulous. And I found that

When you bring a good legal department and a good finance department together, it's amazing. We did amazing things at that company between legal and finance, my team, their teams. It was fun. Even in the darkest days, we would go and have dinners and laugh and find humor in things, you know, in dark times. It was a wonderful experience. And then I got married. I had two kids while I was there. Everybody was so supportive.

I was fortunate, there are some pros to having children later in life and that, you know, it was pretty established in my career. so people were thrilled for me and happy for me. And I was able to go off and do that not once, but twice and came right back into my role as if nothing, no time had gone by. And it was a really great time. It was a really great time and it's still a great company. also taught me that when you bring in great people, as we did,

when we brought in a new CEO, a guy named Brian Dupreau, when you bring in great leaders and the right leaders, they don't just fix a broken company, they set it up for success long past their tenure. And I learned that at Marsh-McClennan. I saw what the great leaders there did in terms of positioning that company where even today it has an excellent board. I view it as one of the best boards in the Fortune 500.

I know what their governance practices are. I know how they do certain things because a lot of what we put in place back then has been carried on. And the general counsel there now is wonderful, someone who Peter and I hired. And so she continues to do a lot of the, I mean, the company's changed and I'm sure there's a lot that's different, but it's still a great company. And I give a lot of credit to people like Brian.

Speaker 1 (08:57.245)

and Peter Bichard who laid a great foundation for the future. And I think that's a real testament to what it means to be a great leader. It's not just about your tenure, it's about what happens when you leave and how do people carry it forward. So it was a great, great experience. But what I found is I liked being part of the decision-making process. And when you're outside council, you...

aren't necessarily you give advice and you give people options, but you're not really the decision maker. Although in hindsight, I remember many of my banking clients saying to me, know, Lucy, what we like about you is you help us make decisions. You don't just say you can do A or B and then you walk away. You say you could do A or B. And if I were you, I would do A for the following reasons. And then we would say, well, but what about this? And what about that? And I was like, okay. Well, now you're giving me new facts.

now maybe we should think about option B a little bit more. And then we would work through it together and they would ultimately make a decision. And then I think what helped me be a good general counsel and deputy general counsel was that I've always spent a lot of time with outside counsel. I make sure they really understand what's going on and what the dynamics are internally, whether it be board dynamics or executive committee dynamics, because outside lawyers are only as good as you make them. If you don't give them all the facts,

their advice may not be the right advice and it's not their fault. It's just that they don't have all the facts. So it takes a lot of time, which is probably why I work too much. But I think you need to make that investment in your outside counsel in order to make sure you're getting the right advice for the company. And I've learned that lesson over and over and over again, that when I invest the time, I get a better result at the end. Everybody gets a better result.

Yeah. I don't know, Lucy, if you've ever heard this term grid worker.

Speaker 1 (10:59.342)

I've not.

It's something that I had just heard recently and it was described as someone who wherever they go in life, whether it's to a different town, different state or different company, they just light up the energy grid around them. Listening to you talk about your experience, it made me think that Lucy is definitely a grid worker.

No.

One thing is that I also love how you have a very clear idea of what it takes to access that grid, right? So you, when you were describing the perfect job that would be enticing to a talented lawyer to join Marsh McLennan, you were already thinking about, you know, what kind of access would the person have to the board, to the nerve center of the company, et cetera.

And then going in-house, then you were able to bring all these different parts of the company together and help move it in the right direction. You're definitely a grid worker. And I think wherever you go, the place benefits from your presence and your judgment and your leadership. Your professional trajectory just kept growing. you went at some point, I forget what year was that you moved from Marsh to SMP.

Speaker 1 (12:28.149)

2014. Summer of 2014, I was recruited to be the general counsel. It was McGraw-Hill Financial by then. They had not changed the name to S &P Global yet because McGraw-Hill Financial had been more of a conglomerate. It had different businesses and then eventually they sold off the education businesses, which was sort of the legacy business. And then it really became businesses that were tied into the rating agency or

Okay.

Speaker 1 (12:56.27)

linked to the rating agency business. So they renamed it S &P Global. That was after I left. So when I was there, it was called McGraw-Hill Financial. I was brought in there to really to resolve an existential problem for the company. mean, after the financial crisis, they had been sued because of ratings that had gone from AAA down to junk overnight. And the government various

state and federal government agencies accused S &P of fraud. That what they had done was really pay to play, that people had paid to get the investment grade ratings and they should have known that they really weren't. And the company had been fighting that litigation on First Amendment grounds for a long time because they had always successfully taken the position that ratings are opinions and you can't sue someone for their opinion.

And eventually that just started to fall apart because they lost the motions. The DOJ case was a firee case, which is a fraud case. And so that kind of goes out the window with the fraud case. And so it became very challenging for them. They tried to get all 20 states. There was the SEC in two states and then the DOJ and 20 other states. They had tried to put all the 20 states into one multi-district litigation in one place.

and they lost on that. So they were then litigating in 20 separate states in addition to dealing with the DOJ, the SEC, and two other states that were aligned with the SEC, which just was untenable and just not sustainable. The amount of money on legal fees alone, management distraction, the reputational damage from all of that.

And so they had a general counsel who was retiring and they decided to look for someone with a very different skill set. They were originally looking, you know, the funny story there, which is why I think everything happens for a reason in life, is that they were looking for someone with a strong litigation background and potentially someone who had been in and out of government who might've been able to, you know, maybe knew people at the DOJ or the SEC. And we all know people like that who have gone in and out of government service and are well connected and do litigation.

Speaker 1 (15:14.79)

And so they were looking for a litigator and they had hired a headhunter who had been making phone calls to people. And several of those people called me and said, Hey, I got a call about this job. I told them they're looking for the wrong skillset that if they want to settle this stuff, they shouldn't be looking for a litigator. Cause litigators like to litigate. They should be looking for a problem solver. And I told them to call you because you solved a lot of problems at Marsh McLennan and

literally three, four, five people called me about that and Headhunter never called. And then a woman who worked at the company at S &P who I had met very randomly at an event I wasn't even supposed to go to, I filled in at the last minute for a colleague, reached out. I'll never forget it. I was on vacation with my husband in Barbados for a wedding and get a call and I'm sitting on the beach and...

She said, know, I'm probably not supposed to know this, but we're looking for a new general counsel and they're looking for a litigator and it doesn't feel right to me. And I remember meeting you at this conference that we went to and hearing your story and Marcia's story and how you guys got out of your regulatory problems and your involvement and all of that. And do you mind if I tell our head of HR about you?

And I said, sure. said, look, I'm always happy to talk to people. If I'm not the right person, I know a lot of people I can make recommendations. And so she passed on my resume. He passed it on to the headhunter who then sheepishly called. And I ended up getting the job and I resolved everything one day shy of my six month anniversary, which everyone told me was going to take two to three years. So that was a great experience.

Amazing.

Speaker 1 (17:05.294)

I had never dealt with the DOJ. I had never dealt with enforcement at the SEC ever. Corp's in a million times, but never enforcement. Never had any reason to go to the DOJ. And had never really dealt with state AGs. Because even at Marsh-McClennan, it was my boss, the GC, that dealt with Elliott Spitzer and the fallout from all of that. So I didn't even really get my hands dirty on that at Marsh. I was just helping with other cleanup stuff on the...

you know, how are we going to fund things? How are we going to fund settlements? How are we, you as well as working with the finance team on contingency planning and funding of certain things. I wasn't working on the actual litigation or regulatory matters, given it wasn't my background. So, you know, I just kind of went in and did what I always do. I just followed my instincts. I did a lot of research going in, studied every person that I was going to have to talk to.

and spent my first day calling everybody in the government and just introducing myself. And, you know, I didn't come out and say it, but I basically acknowledged that, you know, they had all the power and I didn't. And I think just that acknowledgement went a long way because the company had been fighting. So I was basically subtly sending a message that I want to find common ground. You know, I don't I don't fight the government. That's not who I am.

And I told the company that before I took the job. said, look, if you're looking for someone to fight the government, I'm not your person. You know, I don't do that. I just, find it disrespectful. And I think people, I think very highly of people who go into government. I know a lot of people that have been in and out of government. They're smart people. They have a lot of opportunities and they choose to give back and do public service. I have a lot of respect for that. And so.

the only way I will do this is if I'm able to build relationships and resolve it in a way that is good for everybody. And so that's how I approached my first day. And like a lot of things, I'm still very close to a lot of people in government who were my adversaries at the time. And we ended up becoming friends. And there was mutual respect. We treated each other professionally. We got to a result that...

Speaker 1 (19:21.004)

gave everybody something to say that was good for them and the company was able to move on. So I was very proud of that, to be able to do that in six months with that many players. I kind of drew a little bit on my &A skills and went back and said, this is a deal. I got to cut a deal with a lot of people. And so how do I figure out, how do I move the pieces around and I can't possibly deal with 20 AGs.

So how am going to get someone else to do that for me? And I got a very nice man, you know, man at the DOJ to do it. name is Stuart Delery, who I still love to this day and adore one of the nicest people I've ever met. He's been in and out of government many times. Most recently as Joe Biden's White House counsel and is back in private practice now. And I told him, I said, I can't deal with 20 states. I'm going to need you to, I'll deal with the SEC and the other two, but.

I can't handle that many people. It's just too hard. And he said, sure, I'll do it. That's what I do. Wow. Okay. Thank you. So he did that. I did the other stuff and then it all came together in the end. And there was no screaming. There was no fighting. There was no arguing. There was really nothing unpleasant about the situat- the process at all. And in fact, I loved every minute of it. I loved it.

and I'm still friends with all those people.

It's interesting to me when you talk about, you know, drawing on your &A skills, but you weren't talking about, you know, arguing over commas and you're talking about really real, effective deal making skills. it almost sounds like, you were also being a little bit vulnerable in, your negotiation.

Speaker 1 (21:03.148)

no no no no.

Speaker 1 (21:15.424)

No question. Okay, so I was scared to death. I was unreasonably scared to death. I had this notion. I was convinced I was going to get arrested when I went to the DOJ. I don't know why. I just had this fear because when you go to the DOJ, it's very, I don't know if people have been there or not. It is very intimidating. So first of all, since 9-11, they drop you off two or three blocks away. You can't get dropped off in front of the building for security reasons.

So you have to be dropped off two to three blocks away and then you walk to the DOJ. Security, whether it needs to take that long or they're just doing it on purpose to scare you, takes about 45 minutes to get through. Now, maybe it was just slow, know, busy days when I went, I don't know, but every time it felt like it took forever and that they were basically doing a background check, like on everybody that was going through. And then you go up to this, you know, big floor.

I remember it, gorgeous building, gorgeous floor, because it was the main floor. I mean, I was dealing with, you know, the guy who was in charge of the civil division, which is a big job, sits on the same floor as, you know, the attorney general. And so you walk down this big wide hallway with this red rug, American flags everywhere, guards with guns.

everywhere. How do you not be intimidated? Unless you go there on a regular basis because it's your job to negotiate. I had never been there and I never planned to go back there again ever in any capacity unless someone throws a party and invites me. But I was intimidated. I walked down and it was a long hallway. mean, they make you think long and hard as you're walking down that hall. Like, what are you going to say?

How are you gonna present yourself? Like, how are you gonna introduce yourself? And so I just walked in and looked at Stuart and was like, boy, you people really know how to intimidate people here. Which was probably not from a litigation standpoint, like the strongest move one could make, but like, that's how I felt. I was like, I'm scared. I feel like I could be arrested at any moment for any reason.

Speaker 1 (23:30.254)

but I had never been there. I was like a fish out of water. It was not my comfort zone, but you know, it didn't take long for me to realize that the people on the other side of the table were actually professional. They were smart. They knew a lot more about the case than I did because they had been dealing with it for a long time. And so I did a lot of listening. I let each of them speak and tell me their views, vent about what had happened, how unhappy they were about how certain things had been done.

And so I did a lot of listening. And at the end of the day, the amount of time we spent negotiating was not that long. I didn't realize it at the time, but what happens is I was expected to make some kind of offer, and then they put you in your own room while they talk about your offer. And then they bring you back and say, no, that's not enough. You need to do more, and we think it should be more like this.

and then you go back to your room. And so the amount of time we all actually spent in that room together was very small. But then the side meetings start to happen, right? Starting to meet just me with my counterpart, you maybe an AG comes out and tries to work through an issue. And so it was very interesting to see how those kinds of things get done. It was different from the way we did things in the corporate world. But I liked it.

interesting.

Speaker 1 (24:55.112)

And at the end of the day, it ended up being, you know, one-on-one discussions and being a straight shooter. And everybody gives a little bit to get to the right place. And it's really strategic, you know, what is it that they're really looking for? Like, what is the number that they need because they have so many mouths to feed? And what is the language they need to satisfy themselves that

they've done their job. And so that's really the trick. All the rest is just, anybody could negotiate the rest of the settlement agreement, but you kind of have to just get to like, what are the things I can control with these people that have the power to say yes or no? And it was the dollar amount and certain language that they wanted. And that was it. The rest didn't matter.

Well, so within a little under a decade that you had left Davis Polk, but you were already like, you've moved past this role of a capital markets partner and really left that in the dust. mean, you've really grown and expanded so quickly. And I feel like there's no stage, there's no company too big for Lucy Fato. know, there's no problem being for Lucy Fato.

That's so impressive.

Well, I do like problem solving. And when people ask me what I do, I tell them, I mean, I think of it, you talked about a grid worker. Um, I, I always refer to it as that I connect dots. I think that's one of the talents that I have. I honestly don't know where it comes from. I don't know if it was law school training. I don't know if it was Davis Polk training or whether I was just born with it, but I just, I

Speaker 1 (26:45.112)

do you feel like I have an ability to see the big picture and not just look through things with a legal lens? Because when you become the general counsel of a large public company, especially one that's high profile and is in the news a lot, not often for good reasons, you realize that there are multiple stakeholders. It's not just about getting a lawsuit done, then how are you gonna communicate? What are your investors expecting?

Is the stock gonna tank because you overpaid or because there are constraints on the company going forward? What are the rating agencies gonna do? Are they gonna downgrade you because of this settlement and what it requires you to do? And so I think that's where my capital markets background really helped because I think in capital markets, you think about a lot of different stakeholders, right? I gotta protect my client, usually the banker from liability.

We all want to protect the company because that protects the bankers. We got to write the right story for the investor community so they understand exactly what they're buying. And it can't be too legalistic. It's got to be business. So you have parts of a prospectus that are very user friendly and plain English. The box as we still like to call it with the summary of what the company does.

And then you got a hundred pages of risk factors that nobody reads or understands except plaintiff's lawyers. And then you have 300 pages of financial statements that some people read and some people don't. But it all comes down to that little box at the end of the day. Do you capture someone's attention enough to make them want to read other parts of the perspectives? And so I think that

forced me to think about, you know, who are all the different people and then the SEC is going to read it and what do they think? And then if there's ever litigation, a plaintiff's lawyer will read it and how are they going to interpret it? And so I think the capital markets thing did help me learn about connecting dots. And then as I progressed in my career in other places, I worked at a private investigative firm, Nardello & Co., which was fabulous. I was out of the public eye, but it was like a whole new set of

Speaker 1 (28:50.89)

experiences and I learned a lot about things you would never even think about in your day life that are just, you know, people in the intelligence community work on. Sometimes they're public, sometimes they're not. It was very global in nature. So I learned about a lot of global issues. And then, and then I was at AIG for six plus years and there, you know, there were a million things going on all the time, just given the company's history and

the amount of turnover they had had and the turnaround that needed to occur. And so I think I just was constantly, know, and in AIG, I ran communications at one point. I was the interim head of HR a couple times. And so I think that just was constantly expanding the notion that as a general counsel, you actually have a lot of constituents you need to think about.

You're more like a CEO and CFO in that way than you are like other functional groups because you have to protect a lot of people. You have to protect the company. You have to protect its stakeholders. You have to protect the board. General councils are very unique. We are not the CEO's lawyer. We are not the CFO's lawyer. mean, if everybody's aligned, it's all good and happy and everybody plays nice in the sandbox, but...

You know, at the end of the day, a general counsel, you know, we've got up the ladder reporting, as you know, if we think there's something wrong going on or something bad and you go up the ladder and there's no answer, you keep going up the ladder and then eventually, you know, you may need to leave or go to the SEC or, you know, whatever it is you think you need to do. So I think the general counsel job I learned once I got in it,

And even at Nardello advising general counsels and working with partners in law firms that were advising general counsels, you realize that our responsibilities are quite different than other executives because we do have this professional code and ethical code that we have to abide by that makes us an insider, but yet we have to be objective, right? And the outside looking in as well.

Speaker 1 (31:12.938)

That's a hard thing for a lot of people to do. Some people do it better than others. We've seen a lot of companies that have fallen down because bad things happened. Enron's good example. I still remember this day a big article that was written where the headline was, Where Were the Lawyers? I always remembered that, Where Are the Lawyers? Something goes wrong. People don't always say, Where was the CEO? Maybe they say, Where was the board?

Maybe they say, was the board? Right. Yeah. But it's always where were the lawyers? Where was compliance? Right. So people know we have this special role in organizations. And so there's a lot more pressure, I think, on the work that we do. And that's why understanding who all the stakeholders are is very, very important and not something that other people generally need to think about. Like I don't.

Look, a head of IT has a lot to worry about, no questions, especially in this day and age, but I don't think they have to worry about, you know, a lot of things the general council has to worry about.

being the true gatekeeper in so many different ways. And also when you were AIG, you were helping to shepherd the company through the whole pandemic experience as well. God. Which is unprecedented.

that was crazy. What a crazy time. I still, it's weird. It's like a weird time warp. Like sometimes it feels like it was years ago and then other times it feels like it just happened and we're still in it. so it's a very, I will say we will look back many years from now and still think like, wow, did that really happen the way it did? The world just shut down.

Speaker 1 (33:05.494)

I mean, literally just shut down and we thought two, three, four weeks, never did we think it was going to be what it was. But having to deal with all of that and I think that was really the moment in time where CEOs had to step forward in a way that they never did before. So people, employees really like, I saw it firsthand. They look to their CEOs. What does this mean? Are we going to be okay?

Is our company going to be okay? Like, what does this all mean? And you saw all these CEOs having to come out and talk about it. And then you had Black Lives Matter that happened and then anti-Asian hate that happened. And you had a lot of things that fell out of COVID where CEOs were put in a position of having to speak to the issues because people didn't necessarily view politicians as telling them the truth or being fully honest or

or at least being able to bring it down to a level where, you know, maybe they can tell you what to do about a vaccine or not, but they can't tell you what to do about your job. And so I think that was sort of a moment. And that's why I took on communications at AIG, because then we had to think about everything we said, you know, people were very focused on business interruption insurance, regulators were very focused, Washington was very focused, other governments were very focused. What are you going to pay out on? What are you not going to pay out on?

So we couldn't just put notices out to our employees all over the world and not expect those to be made public. And we couldn't say one thing to one group and say another to something else. And so it all had to be coordinated through the lens of the regulatory environment we were in. And that's why I was asked to take on that role at that time. But I do think it was a very unique time where CEOs were asked to speak up about topics. That was a very interesting moment.

in time and I think we might be moving into another period where CEOs are going to be asked to step up and say more again about certain issues and what do they mean and what does it mean for us and that sort of thing. So I think the responsibilities on a CEO who relies on a general counsel a fair amount is

Speaker 1 (35:28.718)

going to be very hard. Again, it's hard to stay under the radar. If you're a Fortune 500 company, it's very hard to stay under the radar. And even if you're a smaller company or if anything else, your employees are going to look to you and say, well, what does this mean? What does that mean? What does it mean for us? What does it mean for our business? What does it mean for our industry? So I think we're moving into another one of those periods like we did in COVID, where there was a lot of uncertainty.

Yeah.

And it'll be interesting to see how CEOs handle it this time around because many feel like they got sort of, you know, blasted and had got a lot of negative feedback for having stepped up in the moment and done what they felt was right. And then there was a lot of pushback on a lot of these issues.

Yeah, I think it's going to depend in a large part on what kind of general counsel, what kind of advisors they have around them and what kind of judgment that these people have.

Yes, it will be. I think lawyers will continue to be very important players in politics, in democracy. We already see it from the Supreme Court. But I think it's, you know, the DOJ, White House counsel, all the role, the important general counsels of all the cabinet members. I do believe that the legal community will

Speaker 2 (36:33.536)

incredibly important.

Speaker 1 (36:56.202)

once again, it's always been the case regardless of what party's in power. I do think the lawyers will bear a lot of the burden of making sure that things are being done in a way that's appropriate. And we'll see how that goes. Yet to be seen.

Yeah, yet to be seen. And it's part of my hope for having this podcast, doing the show is to hopefully inspire people to get into a career in law because lawyers really play such a critical role in building our society and keep pushing things forward.

Speaker 2 (37:42.68)

That concludes part two of my conversation with Lucy Fado. Thanks for listening. It is such a pleasure to be able to share this conversation with you because to me, Lucy is just such a maverick in her field and such an inspiring and deeply compassionate leader. I hope you will join us again on Friday for part three of the conversation. Until then, be well and be happy.