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News Corp's Legal Department in Shambles; Search is on for General Counsel Amid Company's Mounting Legal Problems

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published July 16, 2011

According to the July 15th businessweek.com article, ''News Corp. Phone-Hacking Accusations Probed by the FBI'', Republican chairman of the House Committee on Homeland Security, U.S. Representative Peter King, ''asked FBI Director Robert Mueller in a July 13 letter to investigate whether employees of News Corp.’s News of the World tried to access voice mails belonging to victims of the 2001 terrorist attacks through bribery and illegal wiretapping.''


Last week, News Corp. closed its nearly 170 year old ‘News of the World’ tabloid, and today, Rebekah Brooks, former News of the World editor, resigned today from her position as chief executive officer of News International, which publishes News Corp. newspapers in the United Kingdom.

According to the businessweek.com article, half a dozen U.S. lawmakers yesterday asked various government agencies, including the Justice Department and the Securities and Exchange Commission, to investigate the company’s possible violations of the law. In addition, Democratic New Jersey senator Frank Lautenberg asked U.S. Attorney General Eric Holder and SEC Chairwoman Mary L. Shapiro In a July 13th letter to investigate if News Corp. and/or its subsidiaries violated the U.S. Foreign Corrupt Practices Act.

The turmoil has thrown the company’s in-house legal department into shambles. According to the July 13th thomsonreuters.com article, ''News Corp's legal staff in disarray'', worldwide corporate general counsel Lawrence Jacobs resigned last month. While the search is on for a replacement, the company’s fifteen attorneys are operating solo for the time being. As well, Tom Crone, who had worked at the company for many years as a legal manager and senior executive of News International, a division of News Corp, left the company in recent days.
United States

For now, News Corp attorney Janet Nova, who’s worked for News Corp's legal department for nearly fifteen years, has assumed the role of group leader. Joel Klein, chief executive officer of News Corp's education division, and former chancellor of New York City's schools and former head of the U.S. Justice Department's antitrust division, is providing ''important oversight and guidance'' as the scandal continues, News Corp Chairman Rupert Murdoch announced last week, per the thomsonreuters.com article.

According to the same article, News Corp is using the services of a consulting firm to help search for a new general counsel, and is considering internal and external candidates.

According to the thomsonreuters.com article, Kenneth Bunge, a consultant with Altman Weil who works with corporate law departments explained the search for general counsel normally can take up to six months under the best circumstances. Many candidates may be scared of the landmine that News Corp has become, while others might view it as an opportunity. ''It's a high-risk situation,'' he was quoted as saying.
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