Pepsi One

For a while there, Indra Nooyi, the chairwoman and CEO of PepsiCo, was getting tired of all the speculation that Larry D. Thompson, her general counsel, was going to take one of those big law jobs in Washington. First it was the opening for attorney general when John Ashcroft resigned in late 2004. Then there were the two Supreme Court vacancies in 2005 when Sandra Day O’Connor retired and William Rehnquist died. And in 2007, the attorney general job opened up again after Alberto Gonzales quit under fire.

Each time, Thompson’s name was floated as a possible replacement. Nooyi let it be known that while she thought Thompson would be terrific either on the Supreme Court or leading the Justice Department, she didn’t want to lose him. “I thought I was going to have to call the president and tell him, ‘Hands off my Larry,'” she says.

Thompson says he wasn’t offered a Supreme Court seat, and refuses to comment on press reports that he turned down the job as attorney general in 2007. But he makes it clear that after a long and varied career—as a corporate counsel, law firm partner, government lawyer and administrator—he revels in his current job. He is not only the top lawyer for one of the world’s most recognizable consumer brands, he is also helping to redefine the role of the corporate counsel in the post-Enron business world.

Historically, he notes, a general counsel’s practice was confined to the technicalities of corporate law, and perhaps mergers and acquisitions. “Before the corporate scandals, many corporations relied on the general counsel for the last word in legal advice, and restricted that person’s role,” says Thompson, who as the U.S. deputy attorney general oversaw the government’s investigations into the Enron, WorldCom and other scandals in 2002 and 2003.

In contrast, at PepsiCo he not only oversees the company’s 130 lawyers around the world and the many outside counsel who handle specific legal assignments, he is also deeply involved in strategy for all manner of corporation-wide public policy, government relations and other external issues. He is reluctant to discuss any particular contributions he has made to policy, but says, “It’s important to be able to give your client counsel in a whole range of respects that touch the legal [realm], and today the law is involved in a lot of different things. So what’s good about PepsiCo is that not just myself, but my lawyers, too, have a seat at the table for all the important business strategies of the company.”

On a casual Friday at PepsiCo late last summer, many executives walking around the corporate campus in the New York suburbs were comfortable in khakis and golf shirts. Thompson, who looks as polished as the antique Buicks he collects, was in his own version of work casual: a sport coat instead of a suit. His office was as neat as the perfect knot in his tie, from the stacks of law journals on his conference table to the handwritten tributes from George W. Bush and other luminaries to the African-American folk art collectibles. Pretty much everyone else at PepsiCo would leave that day at one o’clock for a long weekend; Thompson would knock off early by his standards—five or six instead of his usual eight or later.

His office also features several pictures of Mark Twain, another prominent product of Hannibal, Mo., where Thompson’s parents, a cook and a railroad laborer, raised him and his three younger siblings, two brothers and a sister. “I had very good parents,” Thompson says. “I didn’t know I was in this category of people we call disadvantaged until I went to college and took sociology and economics.” He was the first in his family to go to college, at a small school called Culver-Stockton, in Canton, Mo., where he played middle linebacker on the football team.

In college, he was struck by 1964 Republican presidential candidate Barry Goldwater’s book, The Conscience of a Conservative. Thompson disagreed with some of Goldwater’s creed—Thompson was and remains a staunch supporter of affirmative action—but much of the book resonated. “Especially the concept of individual responsibilities and not being dependent on government,” Thompson says. By the time he graduated from Culver-Stockton in 1967, he was a bona fide rarity: a black conservative.

Thompson went on to get a master’s in sociology at Michigan State, where he met his wife, Brenda, who was studying to be a psychologist. His plans to become a social worker got sidetracked when a professor suggested he’d be a good lawyer. By the time he graduated from the University of Michigan Law School in 1974, he and Brenda had been married for four years and each had a small mountain of school loans to repay. When a law firm offered him $15,000 a year, and Monsanto offered him $19,000, it was an easy decision.

At Monsanto’s corporate headquarters in St. Louis, he met another young lawyer who also happened to be conservative and black. Over weekly lunches at a Chinese restaurant, he and Clarence Thomas became lifelong friends. “We’d talk about our dreams, about the profession. Sometimes we’d talk about politics.” No, Thompson says, Thomas never spoke about becoming a judge someday, let alone a U.S. Supreme Court justice.

“Clarence was much more interested in ideas and philosophy than I was, from the very beginning, but listening to him, and listening to where he wanted to go, began sort of a seed sown in my mind about public service,” Thompson says. And when Thompson began looking for challenges beyond Monsanto, Thomas suggested he look in Atlanta, which was then beginning to boom as “the capital of the New South.”

Thompson took a pay cut to go to King & Spalding in 1977, just as the Atlanta firm was becoming a national powerhouse (and where Coke was a longtime client). He worked in litigation and antitrust, aiming to become a partner, when he met Mack Mattingly, a Georgia businessman who was running as a conservative Republican against longtime U.S. Sen. Herman Talmadge, an icon among Southern Democrats. With Thompson’s help, Mattingly won a huge upset in 1980. The new senator asked Thompson if he wanted a government job; Thompson said thanks but no thanks, he wanted to stay at King & Spalding. But when the new Reagan administration had trouble filling the job of U.S. attorney for Atlanta, Mattingly asked Thompson to change his mind. Thompson, at age 34 and not even a partner, sought advice from Griffin Bell, who had returned to King & Spalding after serving as attorney general in the Carter administration. Bell told him to go for it. “He talked about the law as a service profession,” Thompson recalls. “He said it was also an opportunity to define my career.”

His three and a half years as U.S. attorney offered Thompson “good experience in big, complicated, sophisticated legal matters” and helped him become a manager who could identify the kind of lawyers he wanted working for him. He always relished one particular moment: “When a judge looks down and you’re ready to start a trial and you stand up and say, ‘The United States is ready.’ That’s something that sends chills up and down your spine from your first case to your last.”

With two small boys at home, he came back to King & Spalding in 1985—this time as a partner—and with Judge Bell started a “special matters” department that quickly grew into a booming white-collar defense practice. He learned the importance of managing a case pre-indictment and persuading the government to drop its investigation before it became public and damaged his corporate clients. “It was a finesse kind of practice, sort of a combination of your legal ability, your judgment and the trust you can engender from the people on the other side,” he says. He enjoyed adversary practice, but later tired of the gruelling trial-preparation process.

In 2000, the incoming Bush administration asked him to become deputy attorney general under fellow Missourian John Ashcroft. In that job, in effect serving as chief operating officer of the Justice Department, Thompson oversaw the government’s legal response to the 9/11 attacks—and the Justice Department’s internal debates over wiretapping, torture and civil liberties. “I was involved in all those,” Thompson says. He stands by most of the Bush administration policies, but recognizes concerns over civil rights. He suggests establishing a special court, a national security court, to hear extraordinary cases—he cites the “ticking bomb” scenario—when prosecutors seek to limit civil liberties and due process in order to protect the public. Heading the Enron prosecution, he was also the author of the Justice Department’s Thompson Memorandum, which set out tough new procedures for prosecutors going after corporate wrongdoers.

By the autumn of 2003, Thompson had worked himself literally to the point of exhaustion. He resigned from the Justice Department, took some time off to recover his health, and spent several months teaching law at the University of Georgia and serving as a senior fellow at the Brookings Institution. He assumed he’d eventually go back to a law firm, but then PepsiCo knocked on his door. After Enron and other corporate scandals, a number of CEOs and boards were looking for people with his kind of background—a mix of corporate, law firm, prosecution, defense, litigation, management and government experience.

“He has a great view of how Washington works, the boundaries of the corporation, and how to maneuver in an international setting,” says Nooyi. “And he has an incredible network of experts he can call on.”

When asked if PepsiCo is his last job, Thompson smiles and shrugs. He likes the idea of spending more time with Brenda, who is now retired after a career as a school psychologist, and with their sons Larry, a patent attorney in New York, and Gary, a recent law school grad who is clerking for a state judge in Georgia. He likes puttering around their homes in Greenwich, Conn., and St. Simons Island, Ga., or tooling around in his classic cars. However, he insists, “I never want to retire in the traditional sense.” At 63, he thinks he’s too old to be considered for the Supreme Court, and he isn’t interested in the glare of the spotlight of attorney general. But if a good spot as a U.S. attorney came up …

His ruminations are interrupted by a group of visitors who burst into his office, led by Dan Bryant, a senior vice president of PepsiCo for global public policy and government affairs. He’s brought his wife and their four blond kids into the office to meet his boss. “He’s one of the big reasons Daddy likes his job,” Bryant tells the kids. Thompson, all smiles, shaking hands, shows the kids some of the art on his walls.

Later, Bryant says he wasn’t kidding about working with Thompson. “He’s not only a top-flight legal practitioner, he’s someone who always considers the larger strategic context with an eye toward not simply resolving the issue, but improving the broader landscape for his client,” Bryant says. “He has great enthusiasm for legal policy. He takes the time to understand the issue and get the policy right. Along these lines, he understands the importance of thought leadership and the need to promote ideas and data as part of a strategic effort that is built and sustained over time.”

Thompson, given the chance to offer any valedictory words of wisdom for other corporate counsel, takes a moment to think about it, and then says:

“If you don’t mind who gets the credit, there’s nothing you can’t accomplish.” 

—Timothy Harper, based at www.timharper.com, is a journalist, author and lawyer who teaches at NYU and the CUNY Graduate School of Journalism.