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Corporate Counsel (Tampa edition)
Attorney David Vetter left private practice 10 years ago to join Tech Data Corp., the largest public company in the Tampa Bay area by revenue.
By Bob Andelman
Contributing Writer
When Tech Data Corp. acquired Munich-based Computer 2000 in 1998, it brought together the second and third largest computer and IT distributors (by revenue) in the world. It virtually doubled the size of the Clearwater corporation in one transaction.
"That was fun," says David Vetter, 44, Tech Data's general counsel for the past decade. "A lot of interesting issues."
The kind of issues that keep lawyers' minds spinning when they're supposed to be sleeping.
Two in particular concerned Vetter. One was the European structure for due diligence, which limited Tech Data's ability to deeply review every document. "We did more than most of the lawyers involved from the other side did, but not as much as my conservative legal nature wanted to," Vetter recalls.
The other issue, a major concern to company CFO Jeffery P. Howells, was whether Tech Data could manage its new, decidedly foreign acquisition and how it would affect the company and its culture going forward.
"In many ways, our management process and the way decisions got made had to change a great deal," according to Vetter. "We were dealing with radically different cultures and different ways of interacting. We had to be sensitive. Fundamental communications changed. We had to find ways of passing information down and, equally if not more importantly, back up."
And from the legal side, Vetter found himself responsible for the corporation's regulatory behavior in countries where he had in some cases never been before, let alone knew the laws.
"I didn't have a clue," he says, smiling, finding humor only in the rear view of history.
"There are always new issues coming up," Vetter says. "I can't say that any particular country has been more challenging than another. Countries with civil law code vs. common law code approach things differently. But the fundamental logic behind laws exists. The gut feeling I have about law is, in most instances, the same approach that most people take. The right way to do things gets followed. Maybe through different paths, but ultimately you get to about the same end result."
Not that Vetter was always that philosophical and laissez-faire about international law. Fortunately, he cut his offshore legal briefs in Tech Data's Central and South America operations before the European deal arrived
"I can't say it will ever be a learning process that stops," he says. "But I found early on that in some countries, I'd say, 'We want to do this,' and a lawyer there would say, 'To do that, do this.' In the U.S., a lawyer will always recommend alternative ways to go. But in Brazil, for example, the legal culture is to be polite. They may think it's easier to do something another way, but they won't tell you. I got used to saying, 'This is the goal.' Then I ask a series of questions. Then another. And I narrow it down. They don't want to be blunt or offensive. So getting useful, consistent information required a couple of years' learning experience."
The European business and legal structural is far more decentralized than the U.S. system, with rules and laws varying from border to border. Vetter isn't convinced that the European Union is likely to fundamentally change that any time soon.
"If I could get the world to accept one set of regulations, that would be great," Vetter says. "But that bubble was burst in a European seminar I attended recently," he says. "The E.U.'s goal is not to homogenize laws but to maintain high level principles. The way individual companies pursue those is very different. In the U.S., we're used to trying to adopt uniform commercial laws. In the E.U., not withstanding this economic community, there are very defined borders. The laws, languages and regulations are different. It makes it a real challenge for us. Meanwhile, the E.U. has done a good job recently of imposing regulations that affect all of us in the world whether you're headquartered there or not."
Until a year ago, the three-person Munich-based legal staff - and a smattering of attorneys in the field - that Tech Data inherited from its Computer 2000 acquisition reported to the company's European CFO. Now Vetter is Munich's boss, although he says that from a collaboration/workflow perspective, interaction hasn't changed a great deal.
"And there are still lawyers in individual countries that don't report directly to me but we are working on ways to collaborate and never reinvent the wheel if we can avoid it," he says.
For a $15.7 billion company (reflecting 2003 sales), Tech Data's in-house legal tree is remarkably compact. Vetter has just three lawyers on staff in Clearwater, plus one executive assistant and one paralegal. The three attorneys' tasks are divided based on client groups: one is responsible for all the back office functions such as finance, real estate, tax, the IT environment, facilities environment; another is responsible for the front office, including sales and product marketing; and the third lawyer handles compliance, the regulatory environment and human resources.
Soon the Munich-based legal operation will merge with another Tech Data operating entity in Germany and form a seven-lawyer organization for European issues - double the legal staffing in the U.S.
"Europe is a more complex legal environment," Vetter says. "One of my focuses has been how best to deliver legal services to this organization. There is a debate as to whether a central legal organization or a more distributed legal organization is more effective. We're going through that process today. From the metrics out there, we are a small legal organization, but we're not highly regulated and, knock wood, we don't face a lot of litigation."
Vetter does rely on outside counsel for many tasks in the U.S. And much of this contract work resides with his mentors from private practice, well-known and respected attorneys such as David L. Robbins (Foley & Lardner) in Tampa and Roy G. Harrell (Holland & Knight) in St. Petersburg.
"I don't take any responsibility or credit for Dave," Robbins says. "He's a terrific lawyer, but he did it on his own. He is a very bright, capable lawyer. It used to be a joke in my former firm (Robbins, Gaynor) that he was a clone of me. But I have disregarded that characterization of me. He's much smarter than I am."
Robbins says there's much more to Vetter than just a sharp mind, however.
"He's a terrific tennis player and he humbled me greatly," Robbins says. "I thought I could be a match for him. I knew I was in trouble when he showed up one day carrying four rackets. I learned my lesson early. My ego is a little too strong to withstand the beating I took. I was very disappointed in him. I thought he would at least throw a few points to me because I was his boss for a while. So I did question his judgment."
Harrell has similarly good things to say.
"Steve Raymund or Tim Godwin, whoever hired Dave at Tech Data, he was an excellent choice for them," says Roy Harrell, a mentor of Vetter's. "Tech Data has grown over time and he has grown with them. We've done work for them; he always has a grasp of the issues and the economics. That, to me, is the mark of a good in-house counsel. Other companies have asked me if they should have legal in-house. I've always referred them to Dave. If you look at (Tech Data's) sales vs. the number of lawyers, they've done well. That's good control of the issues."
Vetter joined Tech Data in the summer of 1993 as general counsel, and while his responsibilities remained consistent as chief legal officer, his title has been upgraded from vice president to senior vice president.
But what, exactly, does he do?
The Association of Corporate Counsel (www.acca.com/) once sponsored a seminar in which Vetter says the title described what general counsels do: "'A general counsel's practice is a river eight miles wide and five inches deep,'" he says, paraphrasing. "We are asked to do a variety of things. Formally, my responsibilities are all legal issues. My client is the corporation; no individual or board member. So my responsibility is whatever we, as an organization, face from a legal perspective. It doesn't mean I'm qualified to handle all those possibilities, but it means I'm capable of identifying and managing those issues."
Vetter, who graduated from Bucknell in 1981 and received his law degree from the University of Florida in 1984, is married and a father of two. He first came to Tech Data's attention while doing work for the corporation in private practice. He was an attorney with the St. Petersburg firm of Robbins, Gaynor, which did financings and other projects for Tech Data. That put him in contact with former president Tim Godwin, and his successor, Howells. Both men made the decision to hire Vetter, which probably explains why when Godwin left, Vetter was unaffected.
"I would call my practice primarily of a transactional nature," Vetter says. "The stock price going up and down doesn't impact my workload. What does is what the government is doing from a regulatory standpoint and what we're doing transactionally and from an operational standpoint. So if we have any significant transactions going on - a merger or acquisition - those take a lot of time. Or if there is a significant new vendor or customer relationship, or a change in technology that leads us to want a different set of vendors."
For example, Tech Data is getting involved in point-of-sale devices and is looking at vendors and studying the channel. "Different products come with different terms, liabilities and legal ramifications," Vetter says.
And, of course, Vetter is responsible for corporate meeting minutes and other corporate governance issues. It is a very different world than the one he left behind at Robbins, Gaynor.
"I enjoyed the private practice of law," Vetter says. "I didn't take this job to get out of it. And I didn't find that some of the pressures and stresses that exist in private practice changed at all. I worked as hard or harder. And even though I work for the corporation, I have a variety of clients. Each executive, each team, is a different client. And as we expanded internationally, I got to work on a variety of sophisticated transactions that, from an academic and career standpoint, I found very interesting. So from the view of career fulfillment, it's turned out to be everything I hoped."
A few months ago, Vetter was at a meeting of lawyers who were discussing the continued development of the E.U. and Russia. He found himself awed by his private practice counterparts' depth of understanding on the various issues. "They know so much and are so involved; you feel like a fool talking with them. They have so much knowledge," he says. "I miss some of that ability to specialize in something that's new. But what drew me to law was the ability to help people solve problems and improve circumstances around me. I get that opportunity everyday here, helping the company and its teams to succeed.
"It's the projects that draw me in," he continues. "I like the type of work I've been involved in and the variety. Could I have gotten that in private practice? Possibly, possibly not. I joined Tech Data because I liked the work I did for them as outside counsel. And I liked the people. That decision has been a good one; I've been very happy here."
Financially, Vetter says his base compensation is less than what a senior partner at a large, sophisticated law firm makes. But yes, he does get Tech Data stock options.
"One of things that has been financially rewarding here is that we've had some periods of time where the stock has been highly regarded in the marketplace and some of those options have resulted in financial benefit," he says. "But it's difficult to say if I would have more cash in the bank in private practice than here. There are days when I'd trade it in a second. And there are days I wouldn't trade it for the world."
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