Q&A: Take This Job and Love It

Now that Bill Gates is no longer a daily presence at his iconic software company, Microsoft has undergone a cultural change. Nobody personifies that better than Brad Smith, the company’s senior vice president, general counsel and corporate secretary. Smith stepped into Bill Neukom’s shoes seven years ago when the notoriously combative litigator stepped down after 22 years as general counsel. Smith, a genial, Ivy League-educated lawyer who developed an early interest in computer software, works out of a corner office overlooking Microsoft’s sprawling Redmond campus. He and his wife, Kathy Surace-Smith, general counsel at SonoSite, live in Bellevue with their two children. Recently, Smith sat down with WL&P in his office.

Super Lawyers: How did you get into this business?

Brad Smith: It was all rather serendipitous, really. I started using a computer in 1984, when computers were relatively new, and developed a love for PCs and software. I’d just gotten married; my wife was a law student as well. We’d been overseas studying for a year, came back, bought a PC and MS Word, version 1.0, and I got fascinated with it. Everybody knew I was interested in software. So in 1989, when we were moving to the London office of our firm, the European Commission was considering new copyright protection for software. I ended up doing a lot of work for Microsoft and other software companies.

Then, in 1993, I took a leave of absence and moved to Microsoft in Europe—headed the European corporate affairs group.

How has Microsoft’s culture changed since those days?

Microsoft’s culture is always changing. If it hadn’t continued to change, the company would have been much less successful over the years. I’ve seen change come in three- to five-year cycles. We went through a big change in the Internet era of the late ’90s. We went through another change in the early part of this decade, when we had to adjust to the outcome of the antitrust trial. And these days, we’re dealing with Bill’s transition and other things. The company had the opportunity to be very thoughtful in planning for Bill’s transition. Now the most important thing is that all of us be stronger leaders.

How is Microsoft being affected by the continuing financial crisis?

I think Steve [Balmer] put it well when he said no company will be immune to its effects. There’s a lot we don’t know. We don’t know how broad and deep and long-lasting this will be. We have greater uncertainty in this economy now than we’ve had in generations. It’s an unusual time, and we have to adapt. For instance, we decided to speak out on the financial bailout package last fall, which was somewhat unusual for us. But we thought it was important to underscore the impact of that package on the economy as a whole.

This year, Microsoft announced its first-ever round of layoffs. How did you go about that?

We tried to focus on two things: First, how do we make thoughtful and compassionate decisions that eliminate the right positions while being as helpful as we can to the people being laid off? Second, how do we remain focused on the long-term health of the company? We’ve studied what made great companies successful through the Great Depression, and one of those was RCA. When the Depression started, RCA was one of the country’s most research- and development-oriented companies, and it remained so and emerged from the Depression as the leader in radio and television.

One of the lessons of the current crisis seems to be that everything is so interconnected.

We’re all involved in this huge wave of globalization. The whole technology sector is so much more dependent on what’s happening in Russia, China, India and increasingly Brazil. … A related challenge is this notion of regulating in a global environment. Increasingly, we see governments trying to deal simultaneously with the same issues. That can be very complicated and difficult. We’ve been at the forefront of that phenomenon with our antitrust and competition issues. One of the challenges occurs when governments deal with the same issue from different directions, or even in conflict with each other.

We hear you and your wife are known as a power couple. Kathy is a highly successful attorney herself, right?

My wife is Kathy Surace-Smith. We met as undergraduates at Princeton and then both went to Columbia Law School. She is the general counsel of SonoSite, a public company based in Bothell that is the market leader for hand-carried ultrasound devices. She is the best-organized person I have ever met, among many other positive attributes.

So you have kids?

We have a son who is 16 and a daughter who is 14. Our son was born when we lived in London from 1989 to 1993 and our daughter was born when we lived in Paris from 1993 to 1996. They’re both now very much Pacific Northwest kids, but each has some loyalty to the countries where they were born. Some evenings, they appear to re-enact the Hundred Years War in our kitchen. Not even two lawyers can always mediate successfully.

Do your kids want to follow in their parents’ footsteps?

Neither of our kids currently wants to be a lawyer, but who knows? They’re very good at both debating and negotiating with their parents. Our daughter frequently participates in school plays, and her acting skills would give many trial lawyers a good run for their money. Our son currently aspires to be a CEO, a position in which he would employ his own general counsel. He has already told me, however, that even if he succeeds, I will not be considered as a job applicant.

Both kids seem to enjoy critiquing Microsoft’s legal issues at the dinner table. Whenever an issue breaks publicly, they are quick to offer their recommendations based on the day’s news accounts. They show all the deference of a typical teenager, which is a polite way of saying that I need never worry about getting too much respect at home.

Let’s talk politics. When it comes to the political issues you care about, are there fundamental ideological differences between the political parties?

Traditionally, intellectual property law has come from bipartisan consensus. That can always change, but it hasn’t to date. We’ll see.

Trade has also been a bipartisan issue, but there are signs that the parties may be diverging. That could be important. As a company and an industry, we benefit greatly from free trade. It remains very important to get access to foreign markets. It’s also important that those foreign markets be governed by sound copyright principles and a healthy rule of law.

A third issue is immigration. We’re dependent, as a company and an industry, on being able to hire and attract the best and brightest engineers. High-skilled immigration traditionally has been bipartisan. But the issue has become so politically charged that there is now more uncertainty.

Where are we with network security? Is there a gap in national or international law that needs to be filled?

This is an issue that requires a strong public-private partnership. Once people realized they could use the Internet and e-mail to steal people’s credit-card numbers, we had to improve the security of our products. Security is an interesting issue, because once you lose something, you seldom get it back. As late as 1907, any American could go to Washington, D.C., and the White House and meet the president. I don’t think we’ll see that again.

Are there one or more lingering myths about Microsoft? Something that drives you crazy?

There is a fundamental passion for what people here believe technology can do to change the world in a better way. In the years when people were so focused on stock options and stock prices, I think people outside the company tended to lose sight of the fact that passion was the single biggest motivator. And that remains the glue that knits together all of our almost 100,000 employees—a genuine excitement for what they see our products doing. One of the great things about working at Microsoft … You can dream up an idea and create it and, in a relatively short period of time, it may actually be on hundreds of millions of PCs around the world. That’s a very exciting thing—not just for engineers, but for lawyers and marketing people and salespeople and support people.

Another thing some people miss is the intensely self-critical nature of the internal culture. We do something, we complete it and then we sit down and tear it apart intellectually. That’s one of the sources of the company’s longstanding success. But we’re better at sharing that internally than externally. And maybe that’s just human.

If you could amend the U.S. Constitution to accommodate technology, what would you do?

Probably nothing. The real beauty of the Constitution is that the framers incorporated in the document the authority for Congress to encourage invention through copyright and patent protection. And that was no accident. It just so happened that, that summer of 1787 in Philadelphia, one of the two inventors of the steamboat was working on the banks of the Delaware River. And in August 1787, they took a break from the deliberations, and a large number of the attendees went for a ride on this steamboat with the inventor, John Fitch. A week later, after getting this early glimpse at invention and innovation, they added this clause to the Constitution.

The irony is that this John Fitch, a backwoods inventor, got this steamboat up and working. Then it stopped working several months later, and he was never able to get it working again. So it was 20 years later, 1807, before Robert Fulton got one working. But they saw the magic of invention, and they made a place for it in the Constitution.

Secondly, we have so much opportunity to experience legal systems around the world. There are few institutions, private companies or otherwise, that experience legal systems as broadly as we do. And it gives me great appreciation for the strengths of our legal system, warts and all. It’s not just the principles that emanate from the Constitution, but also the ability for them to evolve over time, both through Congressional action and judicial interpretation. And we have a relatively healthy and independent judiciary. At the federal level, we tend to have very talented and dedicated judges who are appointed for life. Once they’re on the bench, they most of the time act in a nonpartisan and nonpolitical way. So I’d be very reluctant to go back and rewrite anything in that Constitution, because, overall, it’s been a remarkable success.

With the emergence of the blogosphere, do you ever find yourself thinking about Thomas Paine and the pamphleteers?

Interesting question, because technology and the media have been in a constant state of evolution. At some points, we’ve worried about media becoming too concentrated. And now we’re seeing rapid media fragmentation, which has an impact on everybody who has to do with news coverage. We see trends in the level of political discourse. If you look at what newspapers were printing early in the Republic, the tone bore a similarity to what you read in the blogosphere.

Maybe, when media concentrated, it led to more of a sense of responsibility. And when it fragments, when writers become essentially anonymous, all of that civility goes out the window. It’s worth noting that, in the early days of the republic, a lot of journalism was done anonymously. And we’ve sort of gone back to that.

Are you doing what you aspired to do?

Growing up, I wanted to go into law, politics or diplomacy. And I find myself in a role that incorporates some of all three. I came from a family that had its share of lawyers and people who grew up with the invention and expansion of the telephone. I was exposed to engineers, lawyers, technology….

I love my job so much that I don’t think about doing anything else. We have so many interesting challenges here, globally, technically, that it’s more than enough to keep me excited. Every two or three years, it feels like a significantly different place. The industry gets reshaped, the products get reshaped, the legal and regulatory issues get reshaped. So I come back to the same job but find out it’s something altogether different.

But one of the things I hope to contribute is a continuing leadership for the company, and for the state and region. For a long time, we at Microsoft were able to say to ourselves that we did not need to play a leadership role locally because we could count on Boeing to do that. But when Boeing moved its headquarters to Chicago, it provided a bit of a wake-up call to us that we needed to play a stronger leadership role in state and local affairs. To that end, we focus on three things. One is to strengthen the education system, both K-12 and university level. Second, we look at infrastructure improvements, especially in transportation. Third, we have focused on what you might call the “crown jewels.” When the Seattle Art Museum expanded to a new building, that added to the crown jewels. We look at the jewels on both sides of Lake Washington. We’re committed to strong urban development in Redmond and Bellevue.

That economic transition from Boeing to Microsoft also led to a transition from a blue-collar, lunch-bucket city to profit-sharing and Microsoft millionaires. What can you do to soften that impact?

It’s important to contribute to the safety net. We are substantial supporters of United Way, and our employees are, year after year, among the most generous in the country. Second, we look at transportation as part of the solution to affordable housing. If people insist on living 3 to 5 miles from their work, one is going to see higher housing prices and more congestion on the roads. If we could improve our transportation infrastructure so that people could travel 15 or 20 miles, that could help disperse housing, reduce congestion, and contribute to the pricing of homes. So we can help, but we can’t solve these problems.

What’s it like knowing most of the lawyers you meet wish they had your job?

I actually don’t think this is the case. While people often find much in my job to appreciate, they also recognize that it’s the type of job that typically quiets down only on Christmas Day and New Year’s Eve—and that assumes that nothing dramatic happens in a [different] country that doesn’t celebrate Christmas.

What’s your weakness?

I love to come to work with new ideas. And it’s important for me to work with people who can take an idea and refine it and put legs under it, because I generate more ideas than I could ever pursue.

That’s a weakness?

The weakness is a tendency to get too excited by too many ideas. And the solution is to surround myself with honest people who add some balance.

Do you have a personal hero?

I have two. Growing up it was Bob Gibson, who was a pitcher for the St Louis Cardinals. Aside from being an avid baseball fan, I gobbled up his biography, From Ghetto to Glory. He personified this ability to overcome discrimination, break through barriers.

The other is John Marshall, chief justice of the Supreme Court for the first two decades of the 19th century, who really defined the role of the court in our society. And he defined the way our country works. The judiciary was by far the weakest of the three branches of government. No one expected it to have the power to declare acts of Congress unconstitutional. No one anticipated it would be able to play the role of a moderating force in society. He was a great jurist and a political genius and a fine fellow to boot.

But how was his curveball?

If they had played baseball in that time, he would have been throwing one.