Directors Roster: in affiliation with Spencer Stuart -- a quarterly record of new director appointments.

• Author: Porter, Martin D.
• Position: Spencer Stuart/Directors & Boards Directors Roster

IN THE SEVEN YEARS that DIRECTORS & BOARDS has tracked board recruitment, lawyers have never comprised a significant percentage of new members. There are a variety of factors for that, not least of which is the thorny potential attorney/client conflict in issues of disclosure. But in today's scandal-ridden climate, with a record number of securities litigation cases filed in 2001 (according to the just released PricewaterhouseCoopers Securities litigation study), would not having a lawyer sitting on the board be a good idea? Nearly 10 of the 143 companies in this edition's Directors Roster think so.

In conversations with three lawyers who were recruited to boards, these directors say they have no plans on becoming enmeshed with their board company's legal activities, as they believe their value lies more in providing an added second opinion on various legal issues. And, they add, given the litigious climate that corporations are now facing, boards can't go wrong by having a knowledgeable and experienced lawyer sitting at the table as a peer.

"The corporate landscape is a much more dangerous place today than in the past," says Robert H. Denham, a partner at Munger, Tolles & Olson in Los Angeles. "It's likely that legal issues are going to be more critical to the results of the company than they have ever been." The new director at Lucent Technologies Inc. believes that given this scenario, "It's useful to have one or more people on the board with the expertise to test and form judgments about the ways in which the legal issues are going to be managed."

As a general rule, Denham believes that legal issues are "much more part of the fabric" at some companies than at others, and the less significant those legal issues are, the better off the company is. It's hardly necessary for every board to have a lawyer, he argues, but attorneys can help strengthen boards by virtue of their training and experience. "Lawyers are very good at breaking problems down to sizeable components, figuring out what type of information is needed to make good decisions, and determining what are the decisions needed to be made based upon the information boards have at hand."

Donald E. Godwin founded the law firm Godwin Gruber PC in Dallas 22 years ago and built the firm from three lawyers to 115. He becomes an outside director for the first time at Haggar Corp.

Godwin's...