Why Did Tesla Appoint a Trial Lawyer as General Counsel?

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Tesla Inc.’s General Counsel, Todd Maron, has been replaced with highly experienced Washington, D.C. trial lawyer, Dane Butswinkas. The company issued a statement on behalf of the new incumbent:

“Tesla’s mission is bigger than Tesla — one that is critical to the future of our planet.”

The question everyone is asking now is this: Why did Tesla hire a trial lawyer with a decade of corporate cases under his belt? Maron has been a close confidante of Musk for the past five years, but it seems he is now making way for someone more experienced in dealing with cases covering corporate interests. Maron will help with the transition until January.

Butswinkas is currently also Chairman of Williams & Connolly, and at Tesla, he will be reporting directly to Musk. The transition has been in the works for a few months, with Maron and the company actively planning his exit since July 2018. Butswinkas has been with Williams & Connolly for the past three decades.

Back to our question: why a trial lawyer? A clue to that question might be found by looking at Tesla’s ongoing legal battles.

First of all, we need to realize that much of Tesla’s legal woes can be attributed directly to Musk, his open comments, his stand on certain issues and even some of his business decisions. He’s still the CEO despite the repercussions of the “funding secured” comment made in August this year.

As for ongoing cases, the list is fairly long and the sources are fairly spread out. There’s employee unrest from black workers reporting incidents of racism at the Fremont factory, there are disgruntled investors accusing the company (and Musk) of fraud, the Justice Department and the Securities and Exchange Commission are looking deep into their books, there are instances of former employees like Martin Tripp accusing the company of illegal and unethical activities and even one case of a former employee being accused by Tesla of embezzling $9.3 million from the Global Supply Management division. And then there’s the “pedo” incident with cave rescue diver Vernon Unsworth, for which Musk was sued.

It is undeniable that much of Tesla’s legal troubles originated with Musk. Is that the reason the company has hired someone with trial experience? Have things gotten so bad that only a veteran trial lawyer like Butswinkas can navigate the company safely through the legal landmines put in by Tesla and Musk haters?

Considering the fact that both Tesla and Musk are facing a mountain of allegations and accusations on several fronts, it would make sense to hire someone who knows how the legal system works on the ground.

30 years of experience with corporate-focused cases is a valuable asset for Tesla at this particular point in time. The company is finally profitable, Model 3 production and delivery problems have more or less been ironed out, and the company is continually expanding its capacity on all fronts. It cannot afford to be hobbled at this crucial period by legal troubles turning into court decisions against its favor. If ever there was a time when Tesla needed a trial lawyer at the helm of its legal department, it is now.

What validates that assumption is the fact that Dane Butswinkas is known for his “fantastic courtroom presence” and “celebrated trial acumen”, while being “recommended by his peers and clients alike for his ‘absolute trial-ready preparedness.’”

Among his accolades in court are the fact that he represented Home Box Office (HBO) in a landmark media defamation case and won. He won a defense verdict in a $60 billion antitrust claim case against a major pharma company. Butswinkas also won an acquittal for Ralph Cioffi, one of the Bear Stearns Co. hedge fund managers who allegedly “conspired to defraud their clients by publicly touting the health of the funds, made up mostly of subprime mortgage-backed securities.”

According to a Legal 500 report, Butswinkas is a “once in a lifetime generation trial lawyer.” Tesla itself is a once in a lifetime generation company. Who better to guide it through the murky legal waters it will inevitably remain mired in, in many ways, now and in the future?