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Responsibilities and structure of Red Hat’s legal department

Michael Cunningham is the general counsel of Red Hat, the world’s leading open-source and Linux software provider. A profile of Cunningham, in Nat. L.J., Vol. 29, April 9, 2007 at 8, describes an eclectic mix of functions within his department:

“a two-person corporate affairs group that oversees government relations, a commercial contracting function that keeps 10 people busy, a core legal team of 10 that is allocated roughly half for corporate matters and half for IP, and an equity compensation team.”

Red Hat probably enters into a raft of licensing agreements, so the “commercial contracting function” may consist of paralegals and staff who process such agreements (See my post of May 6, 2006 on contract administration and references cited.). The “core legal team” may include around five lawyers, given the usual ratio of one lawyer for each non-lawyer and that such a complement of lawyers would put Red Hat at about 15 lawyers per billion dollars of revenue. The odd-ball is the “equity compensation team.” But I suspect that its role is to track options and restricted stock (See my posts of Sept.17 and Oct. 18, 2006 on the law department’s role in the task of tracking option grants and exercises.).

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One response to “Responsibilities and structure of Red Hat’s legal department”

  1. Dan Walter says:

    I do not think that it is odd at all that the Equity Compensation team falls under the realm of the Legal Department. In these days of compliance focus this is becoming increasingly common.
    As noted, these teams do the record-keeping, administration and reporting for stock options, restricted stock and employee stock purchase plans. Depending on a companies focus they may fall under Finance and Accounting, HR, Legal and sometimes under investors relations.