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Tech Data GC: Diversity Critical to Problem Solving

In March, wholesale IT distributor Tech Data joined 378 other companies and signed on to an amicus brief urging the Supreme Court to harmonize discrepant state laws and rule in favor of same sex marriage.

“More than seventy percent of Americans live in a state that celebrates and recognizes same-sex marriages. But many states continue to prohibit same-sex couples from marrying,” the brief’s authors wrote. “This fractured legal landscape harms employers and employees alike.”

For Tech Data, one of the world’s largest wholesale distributor of IT products, the issue wasn’t just about economics. The company’s general counsel, David Vetter, noted that Tech Data has had an internal non-discrimination policy relating to LGBT employees since the early 90s, before the issue had really gained traction nationally.

“Signing on to the amicus brief wasn’t really a difficult choice for us,” Vetter said. “It was embedded in the genes of the company.”

According to Vetter, having diverse perspectives is all the more important for large, global corporations. “Internally, diversity is critical — everything from age, to race, to gender, to culture and background,” he said. “Being a multinational entity, a global entity, you need to have people that understand how things will be different in other departments.”

In addition to discussing diversity, Vetter, who was the first lawyer to work full time for Tech Data, and has been the company’s general counsel since 1993, recently spoke to Big Law Business about periodically asking law firms to justify why Tech Data should continue giving them business, and fly-fishing in his home state of Florida.

Read the first installment of the interview here.

Part II Excerpts:

The [law firm] model is going to have to change, and it’s driven by advances in technology. It’s driven by the need of all corporations, not just wholesale distributors that are very narrow-margin businesses, to do more with less.

Firms need to really look at their cost of service, not just in terms of their head count, but figuring out how they can leverage process, technology, and the knowledge that the firm has in a very different way to get value out of it.

Some firms seem to be personally offended by the fact that we’re asking them to demonstrate their capabilities and why we should continue to use them. I can tell you that doesn’t work with me.

If you’re not willing to justify and defend why Tech Data should continue to use you as a firm — that’s not acceptable to me, and you’re not going to win our business that way.

We absolutely consider diversity in the selection process, not for some sort of arbitrary reason, but because we truly believe that in order to be a strategic partner and be that good communicator and provide solutions, you have to have a range of views.

Below is an edited transcript of the second installment of the interview.

David Vetter

Courtesy of Tech Data

Big Law Business: Do you think the future is bleak for middle-tier firms, given the competition from alternative providers?

Vetter: There’s a legal futurist by the name of Professor Richard Susskind who’s done a lot of writing on where the practice of law is headed. He’s out of the UK, and he’s written a number of books on the topic. I spoke on a panel with him at the University of Florida Law School about a year ago.

I think a number of his theories are pretty on-point, in that I do believe, broadly, that the law firm model will need to change. He thinks that change is going to happen over the next five years. I’m not sure I agree.

But I certainly agree that the model is going to have to change, and it’s driven by advances in technology. It’s driven by the need of all corporations, not just wholesale distributors that are very narrow-margin businesses, to do more with less.

Big Law Business: Can firms can really break with the billable hour?

Vetter: I think they can, but what I’ve seen in the U.S. is that when firms come in and offer to do something — let’s say a fixed fee or some kind of alternative fee arrangement — they’re still making the calculation in part based on how many hours they anticipate putting into it, and what that would look like in terms of billable hours. I don’t think that’s ultimately a sustainable model.

I think firms need to really look at their cost of service, not just in terms of their head count, but figuring out how they can leverage process, technology, and the knowledge that the firm has in a very different way to get value out of it.

For instance, I’m seeing some firms beginning to provide licenses to certain kinds of toolkits they’ve put together, that expert lawyers are going to be required to maintain and keep updated, but they’ll make a certain percentage of their profit as recurring revenue on licensing a particular tool that you can use in a complex area of law, and the lawyers or the legal experts are responsible for ensuring the tool is accurate, and not necessarily in doing day-to-day client meetings and client advice.

Big Law Business: What firms do you rely on regularly?

Vetter: It varies by country. Here in the U.S., Cleary Gottlieb does our securities and key corporate work for us. We outsource our labor relations work here in the U.S. to a boutique firm by the name of Ford & Harrison. A regional firm here in Florida we’ve been using recently is Carlton Fields Jorden Burt. In Europe, we use a variety of different law firms.

Big Law Business: Do you entertain pitches from firms? What sort of stuff works with you?

Vetter: Yeah, we do entertain pitches, and in some of this work that we outsource, we will, consistent with corporate policy, over a period of years, reassess the work that’s being performed.

If need be, we’ll go out and ask whether the provider we’re currently using is the best. We’ll ask people to respond to proposals in a very typical procurement style model.

Some firms seem to be personally offended by the fact that we’re asking them to demonstrate their capabilities and why we should continue to use them. I can tell you that doesn’t work with me.

If you’re not willing to justify and defend why Tech Data should continue to use you as a firm — that’s not acceptable to me, and you’re not going to win our business that way. I suppose the firms that have that attitude maybe already have enough business, but they won’t get ours.

What’s important is the firms that thoughtfully think about, “What is the corporate need, here?” — the firms that understand our business well, that take the time to recognize who we are as an organization, where we fit in what we refer to as the IT channel, the firms that think deeply about how they should position themselves to help us solve problems.

Our in-house mission is to be strategic partners, providing practical solutions to key business goals. I expect our outside law firms to buy into and perform that that mission as well.

In order to do that, they need to get to know us, they need to get to know the business, and they need to do more than just say, “Hey, I have an expert in this particular area of law.” You know what? There are a lot of firms that have experts in that particular area of law. Asking “How is that expert going to enhance my business?” is what’s going to win you points when we’re considering whether or not to engage a firm.

Big Law Business: Is diversity a priority at Tech Data, and something you put pressure on outside firms to improve as well?

Vetter: Is diversity a priority? Absolutely. Going back to our mission to be strategic partners providing practical solutions, critical to being able to do that are communication skills. It has been my experience, particularly as our business has grown and globalized, that different backgrounds, different cultures, will view the same conversation or the same questions in very different ways.

One of the best learning experiences I’ve had in the course of my career at Tech Data is being able to work with a variety of different people coming from different backgrounds and cultures, and I’ve learned a great deal about how I need to be aware of those differences and how I need to seek out help from people that understand those differences in order to be able to understand the communication that’s going on and the best way to solve problems.

Internally, diversity is critical — everything from age, to race, to gender, to culture and background. Being a multinational entity, a global entity, you need to have people that understand how things will be different in other departments.

That’s step one, and then when you look to outside law firms, again going back to our philosophy, my mission applies to them as well. We absolutely consider diversity in the selection process, not for some sort of arbitrary reason, but because we truly believe that in order to be a strategic partner and be that good communicator and provide solutions, you have to have a range of views.

Big Law Business: Tech Data was one of a number of companies that joined an amicus brief urging the Supreme Court to rule in favor of gay marriage. Why did Tech Data feel it was important to sign on?

Vetter: When I joined the company in 1993, one of the projects we were working on was revising our employee handbook, and the person I considered the founder of the company, Steve Raymund, who is still our chairman and was CEO and chairman at the time, participated in that process.

When we wrote out our discrimination policy, it included a provision to ensure that we weren’t discriminating against people based on sexual orientation. I think we adopted that handbook in 1994, so since then that has been an element of our company policy. Signing on to the amicus brief wasn’t really a difficult choice for us. It was embedded in the genes of the company. 

Big Law Business: You were ahead of the curve in 1994.

Vetter: I remember the HR person saying, “It’s going to be a little complicated from a benefit standpoint, if we provide benefits to domestic partners,” as they were called at the time, and Steve said, “I understand, but that’s something we, as a company, are going to do.”

Big Law Business: You’re a busy guy, but when you’re not working, what do you do for fun?

Vetter: Right now, I have a five-and-a-half year-old, so I spend a lot of time with my family. My passion, outside of that, is fly-fishing.

Big Law Business: I don’t immediately think of Florida when I think of fly-fishing. Where do you usually go?

Vetter: You’d be amazed. There’s wonderful saltwater fly-fishing. If you’ve never caught a 100-pound carp on a fly rod, it’s an amazing experience. But one of my favorite places to go to fly-fish is Alaska, and I have some family there as well.

Big Law Business: When you’re saltwater fly-fishing, are you usually wading, or are you fishing from the front of a boat?

Vetter: You do both. Certain species, like bonefish and redfish and so-forth, will be out on flats where you could wade for them, and then species like tarpon, permit, and others, you’ll be on a small flats boat, and on the front of the boat, trying not to hook the guide.

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