Win or lose, Google's staff is taking the law and legal departments where they haven't gone before. David Hechler reports

SPEND TIME WITH THE 
energetic crew at Google, and the word "disrupt" comes up a lot. Google's businesses tend to do that to the traditional marketplace, and Googlers (as they call themselves) make no apologies. In fact, they use the word with pride – sounding like 1960s protesters determined to shake the establishment.

The company's lawyers often find themselves in the thick of it – before, during, and after "disruptions". And you might expect them to sound a little upset, since they have to deal with the sometimes messy consequences. But they, too, seem to relish rattling the barricades.

If this sounds like the enthusiasm of youth (and they are young), they also seem intent on building their own kind of law department. Googlers aren't enamoured of received wisdom. They prefer to test all the old shibboleths. And even the new ones.

Many of their cases are cutting-edge. "Bleeding-edge", an in-house lawyer amends. They test the limits of laws perpetually lagging behind new technology. Can advertisers use trademarked terms in Google ads? Can Google scan and make available copyrighted but out-of-print books? Is the company liable if results of its search engine direct users to counterfeit or pirated products? These are just a few of the questions that courts – and Google's lawyers – have been grappling with.

It's an exciting time to be Google's general counsel, says Kent Walker (pictured below, left). They win a lot of cases that define the boundaries of the law. The biggest was the summary judgment last June in which a judge ruled that Google's YouTube was not liable for the posting of Viacom's video clips. "We lose some," Walker adds, "as we did today," referring to the decision by another judge rejecting the Book Search settlement Google had reached with the Authors Guild and the Association of American Publishers. The ruling leaves years of legal work in limbo.

The company has only been around for a dozen years, so the lawyers aren't exactly encumbered by tradition. They are trying to craft approaches of their own, says Walker, sitting in a conference room near his office – er, make that desk. There are no offices. The renovation of their building that Walker ordered last year for the law department was part of an "open style" in hierarchy and architecture. "We don't have an open-door policy," he explains. "We have a no-door policy."

And they reach decisions by consensus, abetted by a multitude of inviting spaces where lawyers are encouraged to congregate – including a library reading room with a virtual fireplace. "Sometimes there's an advantage to having a scrum," says Walker, "where a whole group of people come together on these issues." And it's also – are you ready for this? – fun.

Google attracts a lot of attention for its style. During our March visit to its sprawling offices in Mountain View, California, Lady Gaga was on campus. In addition to performing for the lucky masses, she posed for Rolling Stone with Google cofounder Larry Page – days before his return as chief executive officer (CEO). But its legal department stands out not for the sizzle but the substance of its achievements.

The company doesn't always win the big ones. And it faces a host of challenges, including antitrust investigations in the US and Europe. But it has compiled an enviable record in patent litigation, won a string of victories in the European courts and completed more than 40 (mostly small) acquisitions last year that included two big ones: the mobile ad network AdMob and the flight search company ITA Software. In its spare time, Google stood up to China on censorship and cyber attacks.

Win or lose, Google's cases frequently make law. As one young litigator put it, he rarely has to read case law beyond cases the company has litigated itself.

And as Google's engineers push from data collection to smartphones to the realm of recent science fiction, the law department has sprinted to stay abreast. And Google lawyers have managed to work closely with both the geeks developing products and the outside counsel defending them. All without appearing to lose their cool.

One organisation that has worked with and against them is the Electronic Frontier Foundation (EFF). The two often agree on copyright and fair use issues, and frequently butt heads on privacy, according to EFF executive director Shari Steele. Google's lawyers sometimes want to meet to solicit her lawyers' opinions on new products, Steele says. The only caveat is that the EFF can't go public until the products are released. Then they can slam Google – and sometimes they do.

"They're very smart and easy to work with," Steele says of Google's in-house lawyers. "If they can build a product that will take into account people's civil liberties, they want to do that." The problem, from where she sits, is that "they have a business model that requires them to gather information about people in order to sell advertising". That conflicts with the privacy rights of users, she maintains. "But if you look at the wide variety of things they do, and you look at the people who make up the legal department, they want to do the right thing."

IT STARTED AT STANFORD University, where Larry Page and Sergey Brin were computer science PhD candidates trying to build a better search engine. They attempted to sell it in 1999 because it was taking too much time from their studies, but their asking price of around $1m (£625,000) was deemed too high. A few months later, they raised $25m (£15.6m) from investors and were on their way.

Miriam Rivera remembers the early days as a wild ride for the lawyers. Rivera, who worked at the company from 2001 to 2006, was the second lawyer hired. The company was growing rapidly. There were 160 employees in the whole company when she started. By the time she left, there were that many people in the law department (including paralegals) and 10,000 employees. That's jumped to 25,000 today, including 214 lawyers worldwide, around 50 of which are based in Europe with senior counsel Benjamin Brassington, the company's most senior lawyer in London.

In the early days, every day seemed to bring another deal, Rivera recalls. The small cadre of lawyers was managing to record them in an average of seven days, which felt fast under the circumstances. But it wasn't fast enough. To avoid feeling that they were holding the company back, they standardised compliance and stepped on the gas until they were pushing through ad deals in three days flat. "We were scrambling," she says.

The deals grew larger as the business expanded. The pace continued to be exhausting, Rivera remembers. What saved them was that they hired top people and worked in teams – in practice groups, across practice groups and with business units. "It was a very team-oriented approach," she says. And it still is, adds the lawyer, now co-founder and managing partner of Ulu Ventures, which focuses on seed-stage investments in tech companies.

Google isn't as flexible as it once was. There's more process and more consensus-building, says Chris Chin, who was the fifth lawyer hired and, after nine years, qualifies as an old-timer. In the early days Chin sat next to the CEO and chief financial officer (CFO), who shared an office. Now, he notes, the CFO has his own building. "You're not going to get to know the whole company," he says. "It's hard to know even the whole legal department."

Another sign of the times: until last year Chin headed the US team that negotiates large deals. Now he helps improve processes by directing internal systems that make their practice more efficient.

What hasn't changed is the attitude of top execs to the lawyers. They appreciate the lawyers' contributions, "which I think is a really great thing," Chin says. "That doesn't exist at the other companies I've been with. It was much more adversarial."

Sometimes there's a disconnect between the reality of what Google has become and the self-image its people retain. Collectively, they're like a St Bernard who thinks he's still a puppy as he wags his tail and knocks over the livingroom lamp.

Dana Wagner, who leads the competition team responsible for antitrust matters in the Americas, Asia Pacific and Australia, says: "Most of the people working here still think of themselves as the little start-up. When some of these David and Goliath stories get written and we're not David – that's still a surprise."

It can fall to the lawyers to explain that scrutiny is inevitable for a company its size. (David knew a lot about slingshot technology, but his annual revenue never hit $29bn (£18.1bn).) That's part of what makes being a lawyer at Google so interesting, says Wagner, once a trial lawyer in the US Department of Justice's (DoJ's) antitrust division. The AdMob and ITA deals kept him particularly busy during the past year. The DoJ's review of the flight search deal dragged on for nine months. The proposed settlement in April (which, at press time, had not yet been approved by the DC court) required Google to agree to a host of procedures designed to ensure competition across the travel industry. Google also acceded to years of government monitoring at the same time that it faces antitrust investigations.

The goal is always to weather the regulatory storm and avoid decisions "that will impair product design," Wagner says. "We understand the concerns," he says. "We're a disruptive company."

There's that word again. He means it, Wagner explains, in a good way. Google is disruptive "the way the makers of the internal combustion engine were to the horse and buggy industry". The results may have been bad for horses and buggies, he adds, but they advanced society.

Critics may find this argument self-serving, but Google's lawyers insist the company strives to benefit users – even when the tangible rewards for the company are uncertain. And one of the qualities we admire in the lawyers is that they neither discourage their clients from a legal battle nor shy from one themselves.

The Book Search project is a good example. No-one on the legal team imagined that it would be easy. They understood that scanning the world's books raised major copyright issues. Nicole Alston, who helped negotiate the settlement, remembers that Alexander McGillivray, then an associate GC at Google (and now general counsel at Twitter), predicted that the company would likely be sued. "But the only way to find out was to move forward," says Alston, associate GC for content partnerships.

Everything about it was ambitious. Some of the lawyers talked about making books available to kids who could never afford to see them. But plenty of sceptics suggested that Google was most interested in cornering and controlling a huge and tremendously important market. Alston concedes that Google didn't communicate its message very effectively. Hilary Ware, who manages government and special target litigation, adds that when you take on a project this big, it's hard to perceive all the vested interests and expectations you upend.

The lawyers had no idea that the settlement they'd spent years to achieve would be thrown out the day after they were interviewed for this article. Denny Chin, a judge in the Southern District of New York when the case began (and since elevated to the US Court of Appeals for the Second Circuit), found that the agreement would have granted the company control over out-of-print "orphan books" – more properly the province of Congress than the courts, Chin wrote. He was also troubled by the settlement's requirement that copyright holders opt out rather than opt in.

The in-house lawyers were deeply involved in the case. They are, of course, happy to share the credit when the company wins. But they don't hibernate in the wake of defeat. When Chin handed down his decision, Ware was the spokeswoman who issued a statement expressing the company's disappointment.

Google's lawyers were also quick to acknowledge another high-profile failure last year. This one involved Buzz, Google's new social networking tool, which attracted the interest not only of Gmail users but of the Federal Trade Commission (FTC). Buzz automatically compiled lists of contacts with whom Gmail users communicated using the new service, and made these public without adequate disclosure and options, violating Google's own privacy policies. The company settled with the FTC in March, agreeing to establish a comprehensive privacy programme and to submit to third-party audits every two years for the next two decades.

Google employs about two dozen lawyers to avoid this kind of thing. When new projects are launched, these product lawyers are assigned to bake a legal component right into the design. The idea, says associate GC Mike Yang, is to encourage lawyers and engineers to communicate and develop friendly relationships. When the engineers realise that lawyers are there to facilitate rather than delay product releases, together they can front-load the problem solving. It's better than launching a product "and have lawyers throw rocks at it", Yang says.

But the process failed on this occasion. "We feel that we let users down with that launch," he continues. The company admitted as much at the time, and promptly fixed the problem. But they don't try to excuse it. "We can always do better as a company," adds Yang's colleague, product counsel Brian Downing. Google "cares deeply about privacy", he says, "but the answers don't always leap out."

The good news, they emphasise, is that generally the process works pretty well. "More often than not, what we're trying to help the company do," says Yang, "is apply cutting-edge technology to antiquated laws.

"They try to figure out what's right and give their best advice. But the engineers understand that it's a litigious world. What's most important, adds Yang, is that he's never heard one of them say: "We got sued. It must be legal's fault."

LOOKING AT THE BEST IN-HOUSE legal teams, it's impressive to see lawyers that are open about their losses – but Google has had a lot more wins. It had big ones in four patent cases in the plaintiff-friendly Eastern District of Texas, where it won two jury trials and two summary judgments. The company also won summary judgment against Rosetta Stone, when a court found that Google hadn't infringed the language software company's trademark by directing users to the sites of competitors and counterfeiters. And it won a suit in the European Court of Justice, which ruled that Google doesn't infringe trademarks when it allows advertisers to use trademarked terms that belong to other companies.

The biggest win was undoubtedly the one against Viacom last June. Federal district court judge Louis Stanton in New York ruled that despite its $1bn (£625m) claim that YouTube had infringed its copyright by maintaining more than 100,000 unauthorised Viacom clips, the video-sharing site was not obliged by the Digital Millennium Copyright Act (DMCA) to remove infringing material until it received takedown notices. And YouTube removed them promptly once it did.

Viacom appealed the decision, but that hasn't diminished the satisfaction Google's lawyers take from the result. "The case is a huge deal, but not because of the money," says Catherine Lacavera, Google's director of litigation. The amount was just hyperbole, she says, but the importance of the principles can't be overstated.

"The DMCA permits sites like YouTube to exist," she says. Her colleague, senior litigation counsel Adam Barea, adds: "How else can the internet work?"

The two found irony in the background behind the litigation. "When do you get a case where the other party is suing you over stuff that they put up themselves?" asks Lacavera. "And all this coming after they themselves had unsuccessfully tried to acquire YouTube," says Barea.

Asked to respond, Viacom general counsel Michael Fricklas called these remarks "a distraction". In an email, he wrote: "Viacom never tried to buy YouTube. No due diligence was performed, no price was determined and we did not make an offer." As for posting clips: "Like every other media company, marketing employees at Viacom networks posted a small number of promotional clips to the site." These were different from the clips that were objectionable, he added, and YouTube knew that. "YouTube has tried to divert attention from the core issue – the law prohibits companies from deliberately building a business on the back of copyright infringement. We are confident that the appellate court will agree."

The Viacom case imposed substantial demands on the in-house team. In February 2007, on the Friday before the Super Bowl (and about six weeks before the lawsuit was filed), Viacom delivered takedown notices for about 120,000 allegedly infringing clips. These kept a lot of people busy, says Lacavera, but by Monday morning they'd all been removed.

Their most important task, in addition to researching the issues and fully investigating YouTube (which Google had only acquired four months earlier), was finding the right lawyers. They admit they can be fastidious. They want lawyers who "get" the technology; who can work comfortably in Google's unconventional environment; who collaborate easily. And if that's not enough, Lacavera goes on: "We want them to be 'Googley'. We want them to reflect the 'don't be evil' style," she says, referring to the company's unofficial motto.

They want lawyers who reflect their values right down to drafting briefs. "Because of all this," says Lacavera, "we tend to be difficult. I don't think I'd want me as a client."

They ended up with two firms that worked effectively together. One was the old standby, the other was new to them. And it wasn't completely smooth; they dropped another along the way.

The familiar face was David Kramer, a partner at Wilson Sonsini Goodrich & Rosati, the Palo Alto-based law firm that helped Google incorporate and who first advised the company in 1999. What makes working for Google different from working for other clients, Kramer says, is that its litigators are very much about "cutting through the posturing and the puffery that outside counsel can sometimes bring to bear". Instead, he says, they're all about "results".

Wilson Sonsini was expected to collaborate not just with the in-house lawyers, but with another firm. Later, Google had a choice between a go-to firm it had used successfully many times, and one it never had. The first was Quinn Emanuel Urquhart & Sullivan, which won those two big patent trials in Texas – the safe choice, if there ever was one. The newbie was Mayer Brown – the unknown. The in-house lawyers didn't want to talk about why, but they chose not to play it safe, even on their biggest case.

Google's law department is young, and so are its lawyers. But they aren't afraid to make a decision that could be second-guessed. "To their credit," says Andrew Schapiro, the Mayer Brown lawyer who led the trial team, "they weren't running scared. No-one seemed scared of what a person above him or her might think about a decision."

Laszlo Bock says of Google's employees: "People are here because they believe in the mission." That doesn't apply only to the lawyers, adds Bock, Google's vice president for people operations (translation: human resources). But it applies to them most of all. "Our sales people talk about the application of those ideals," he says, "but the lawyers talk about the ideals themselves."

Bock notes differences with other legal teams: "There's a real aspiration here that they want to shape the way the world works, and shape it for the better." It's not just about holding an interesting job, earning a good salary and scoring a nice bonus. "There's always a call back to first principles," he explains. "What are the legal issues? What are the principles of the company? What do users need?" The heavy dose of idealism and the desire to take the long view distinguish Google's law department from most others, he says.

The trick now is figuring out how to preserve the culture. Miriam Rivera, the former deputy GC, says it's difficult in the face of such rapid growth. She hears that there's still real camaraderie. Even so, "it's really hard to maintain a culture," she says, "because you have a lot of people coming from other cultures, and they're not being thoroughly inculcated into the Google culture."

Chris Chin, the lawyer who has lasted longer than anyone besides chief legal officer David Drummond (pictured above, right), agrees. "Once, we would all eat together as a legal department – when there were 20 of us," he says. Now the best they can do is a weekly happy hour on Wednesday afternoons. And the entire department is urged to attend the annual ski vacation. These activities (which are free, of course) don't just build the company's culture; they build relationships that are at the core of what they do, he emphasises.

And they're fun, which at Google is not beside the point. Drummond and Walker make a point of attending, Chin says. As busy as they are, they are serious proponents of fun.

So is he, adds Chin: "Frankly, it's why I haven't left."

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Google – more like Goliath

2010 revenue – $29.3bn (£18.3bn)

2010 net income – $8.5bn (£5.3bn)

General counsel – Kent Walker

Number of in-house counsel – 214 (including 155 in the US)

Main outside counsel – Wilson Sonsini Goodrich & Rosati; Quinn Emanuel Urquhart & Sullivan; Perkins Coie; Cleary Gottlieb Steen & Hamilton; Mayer Brown

This article first appeared in Corporate Counsel, a US affiliate title of Legal Week.

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