There’s a huge difference between an American company doing business in a few “foreign” countries and a U.S.-based company that does business globally and looks and feels like its worldwide markets.
Milwaukee’s Johnson Controls Inc. is the latter, says Jerome D. Okarma, its vice-president, secretary and general counsel.
It wasn’t always so. JCI, a producer of automotive interiors, batteries and climate control systems, was very different in 1989, when Okarma came on board as assistant general counsel. There were six or seven lawyers in the law department, all in the same building.
“We were a $3.5 billion company when I joined, and only 10 percent of our earnings, advance sales and employees were outside the United States. The law department reflected that. We were more of a national company with a few distributorships and the like overseas,” Okarma said.
“That compares to where we’re at now — run the clock forward, with over 50 percent of our sales, earnings and employees coming from outside the United States. Now we have more lawyers outside the U.S. than we have in the U.S.”
Moreover, in FY 2009, JCI’s global sales were $28.5 billion. The company now employs over 130,000 people worldwide, in more than 130 locations.
As for the law department, it has grown to 58 lawyers.
“It’s been incredibly fun and challenging to oversee the globalization of the legal function to match the globalization of the underlying businesses,” said Okarma, who was named general counsel in 2004.
These days, Okarma divides his time among pure legal work, including mergers and acquisitions, environmental or labor issues, and service on the Executive Operating Team, in addition to corporate governance matters.
Before JCI, Okarma spent seven years at Borg Warner in Chicago. The experience was invaluable because during those years, the company was subject to a hostile takeover, which additionally resulted in it taking on significant debt. To defeat the takeover, the company had to sell off four of its six business divisions.
Okarma worked with some of the best lawyers and businesspeople in the country to help keep Borg Warner viable — which he and his colleagues ultimately achieved.
“I learned about how to do a deal, how to prioritize and how to do more with less,” Okarma said. “It was overarching, accelerated learning, that really helped me in the long run, but it was very painful at the time — like learning brain surgery by operating on yourself.”