Jeff Groves on Becoming the General Counsel of O’Reilly Auto Parts
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We started the episode with Jeff sharing how he went from music education major in his junior year to pursuing law school. We discussed how his goal was to become a law partner and how the opportunity to go in-house came about. We discussed the events of 9/11 and how his family narrowly avoided tragedy. Jeff shared how as the company grew, he grew as General Counsel. We discussed his definition of leadership. He shared a passion project of his related to tort reform in Missouri. Jeff shared what he wants and expects from outside counsel. We discussed his family and their travels. We wrapped up the conversation with the fiction he’s reading and which Missouri MLB team he roots for.
Here are some highlights of my interview with Jeff Groves:
Going in-house was never a goal of mine. My focus was to become a partner in a law firm and do good work for the clients.
When appointed as General Counsel, I knew there was a lot that I didn’t know and it would be an uphill climb, but I was up for the challenge. The company was very patient with me and gave me access to the resources that I would need to get there. As the company grew, so did I.
Being in-house has been exciting because it allows me the resources and the time that I need to become acquainted with things that I certainly had not been acquainted with until I got here. I think being in-house is very fulfilling.
People who are self-motivated find success in-house. I won’t say I’m smart, but I work hard. I’m driven to try to get the best results for my client that I possibly can. So, if you’ve got a brain, a desire, and some ambition, then you can go in-house.
Rolling up your sleeves, listening to your client, being calm, being workmen-like, and taking the steps that you need to be successful is how I approach leadership.
Missouri has sometimes been known as the “Show Me Your Lawsuit” state. If there’s ever going to be meaningful business development in Missouri, then we’re going to have to see tort reform become a reality to level the playing field.
Outside counsel attorneys have to be willing to draw their line in the sand and say this is what I think the outcome is going to be. Lawyers don’t guarantee results and I don’t expect that, but I do expect them to tell me what they would do if they were me.
I’m going to the K if I’m driving to a ballpark to watch a game. Kansas City baseball every day of the week and twice on Sunday.
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Greetings friends, this is Chris Batz, your host of the Law Firm Leadership podcast. In today’s episode, I spoke with the general counsel of a well-known publicly-traded company. He shared his personal and very moving story of a historic catalyst in our nation’s history that led to his transition from private practice to in-house and much more. You don’t want to miss this.
Just a reminder, the PDF transcript of this audio is available to download. Go to LionGroupRecruiting.com/podcast.
As many of you know, we interview corporate defense, law firm leaders, partners, general counsel, and legal consultants. You are listening to episode thirty-eight of the Law Firm Leadership podcast.
Chris: Welcome to The Law Firm Leadership podcast. I’m your host, Chris Batz with The Lion Group. Today, I have the pleasure of speaking with Jeff Groves, senior vice president and general counsel of O’Reilly Auto Parts. Jeff became an O’Reilly team member and joined the legal department in 2004. He became the first general counsel for the company in 2006. Prior to O’Reilly, Jeff was a commercial litigator and a trial lawyer in Springfield and Kansas City, Missouri. He received both his law degree and undergrad degree from the University of Missouri Columbia. Welcome, Jeff, to The Law Firm Leadership podcast. It’s great to have you on the show.
Jeff: It’s great to be here, Chris. Thanks.
Discovering a Love for Business Law
Chris: Jeff, I couldn’t help but notice that you have a rather intriguing undergrad degree. I’d love for you to share how you decided to become an attorney and your journey to general counsel.
Jeff: I went to the University of Missouri and took a business law class when I was in undergrad that really excited me. In my junior year of college, I first considered being a lawyer. In school, I was a music major up until that point, but was very excited about this class and started to look into law school and went on to law school at Mizzou.
I ended up in Springfield, Missouri at a firm called Daniel, Clampett, Powell & Cunningham and worked there for a number of years. After that, I also did a stint at Shook, Hardy & Bacon in Kansas City. Then, I returned to Springfield and was a partner at the Daniel Clampett firm for several years. I made my way in-house to O’Reilly through one of my old partners at a previous firm. He had done some work for O’Reilly and they were looking for their first-ever lawyer to shepherd litigation within the company. After a series of interviews and 15 years later, here I am.
Chris: Did you pursue your music degree with an interest to go into music performance or education?
Jeff: I was always involved in music in high school. When I began college, I thought that I would end up teaching high school band or choir somewhere and that was my focus until my junior year. I was in jazz bands in high school, did marching band at Mizzou, played in the Symphonic Wind Ensemble at Mizzou, sang in University Singers and Chamber Singers, and did opera workshop for five years.
Chris: Do you currently do anything with music now?
Jeff: I’m a member of Trinity Presbyterian Church here in Springfield and I sing in the choir there. Once in a while I’ll sing a solo, but not very often. Those things tend to fade over time and it’s been a long time.
Chris: What was it about the class that you took of business law that piqued your interest?
Jeff: I don’t know if I can put my finger on it, but it was just really exciting. I took the class because I needed to take an elective and thought it might be interesting. I really never understood how that world turned. As I started to learn how contracts worked, how torts worked and how the litigation system worked, it was very interesting and exciting to me. So much so that I abandoned my music degree and switched over to a business education focus so that I could get out and go to law school.
Going In-House was Never the Goal
Chris: When you were practicing commercial litigation law, was your interest to become a law partner or to go in-house?
Jeff: Going in-house was never a goal of mine. My focus was to become a partner in a law firm and end up in a law firm doing good work for the clients. I did a lot of product liability litigation work for clients like Chrysler and Ford and back in the old days, American Motors if folks remember them. They made Jeeps at the time. There were many rollover cases when I started practicing law. Litigation from the defense perspective, whether it be product or commercial, was my focus. That was what I was going to do.
Chris: Can you take us to that moment when you got the phone call about O’Reilly?
Jeff: I got a phone call from my friend and mentor Gary Cunningham, who I had practiced with for many years and had been a law partner with. He had been doing some work for O’Reilly and met some people within the company. The folks he was working with had asked him whether or not he could recommend a lawyer who might transition in-house. They were looking for somebody to help shepherd along the litigation. The company was growing and had more of that type of work which really opened the door.
Making Changes After 9/11
Chris: How did the conversation go with your wife about making the transition in-house?
Jeff: This happened after a time in our lives that we had decided to try to make some changes. My wife and I were in New York City on 9/11 and were actually pretty close to the troubles that day. As we made our way back to Missouri, we started talking about our careers and where we were at. We were both in law firms and doing litigation. We talked about a kinder, gentler kind of life. That was the kind of discussion and thought process we were having, so when the opportunity came up, she was very excited and so was I about pursuing it.
Chris: You were close to the events of 9/11 and that influenced your choice?
Jeff: Yeah, we were actually at the Marriott World Trade Center hotel the night before the attacks. I was there in the city to take some depositions and we were going to spend a couple of days and see some shows. We saw the Phantom of the Opera the night before and had gotten back to the hotel. I left that morning to go take this deposition and remember what a beautiful morning it was. The sky was absolutely just blue, not a cloud in the sky. My wife and I grabbed a cup of coffee that morning before I took off. She said, “I’m going to go to the top of the tower,” because they had an observation deck up there, “unless you want to go. Is that something you want to do? I’ll wait for you.” I said, “No, I’d really like to do that. Why don’t you wait for me?” Then, of course, the events of the day unfolded.
It seems a little surreal now after all this time that we were actually there when it happened. We were close enough to be affected by it. Of course, everybody can tell you where they were when it happened. It’s affected all of us.
Chris: How were you able to get out of town afterward?
Jeff: We made it to the deposition site, which was out of the city. All of the lawyers were there and I think we were all from Missouri actually. The court reporter was there. The witness was there. We caught the word that this had happened and started watching the TV in the office where we were. We had this discussion about moving forward to take the deposition or bailing out. When the Pentagon got hit we decided that we should get rental cars and hotel rooms and figure out how best to make our way back home. At that point, nobody knew what was coming. I remember thinking this is going to happen all over the country all day long. We ended up driving to Pittsburgh and catching the Amtrak to Kansas City.
Chris: That’s profound. That was significant and it caused you to look at life differently to leave the law partner pace of life and go in-house in an effort to enjoy life more.
Jeff: I think that’s a fair statement and probably a naïve thought, but true enough at the time, yes.
Chris: Now, were they already public or did they go public when you joined?
Jeff: The company went public in ’93, so it had been public for 11 years by the time I had walked in the door. We were already probably between a billion and two billion in sales at that time.
The Learning Curve as General Counsel
Chris: And they did not have a general counsel at the time, correct?
Jeff: That’s right. They had a real estate lawyer in the real estate department of the company at that point in time.
Chris: What was it like to come in and then be promoted to the general counsel of a publicly-traded company?
Jeff: A little scary, to be candid with you. I knew there was a lot that I didn’t know and it would be an uphill climb, but I was up for the challenge. The company was very patient with me and gave me access to the resources that I would need to get there. I think they had confidence in me, which is very much appreciated. As the company grew, so did I.
Chris: What has been the company’s approach to acquisitions since you’ve been there?
Jeff: We had a game-changing acquisition in 2008. We bought a company called CSK. It was a publicly-traded company on the New York Stock Exchange. At the time, O’Reilly had about 2,200 auto part stores and CSK had about 1350. It was geographically diverse from us and a lot of their stores were in the western part of the country. Things started to change with that acquisition in 2008. We were a much bigger company and had many different needs. That’s really when my journey started in earnest.
Chris: What was it like going through the learning curve of M&A public company governance and securities with your litigation background?
Jeff: I had a teacher in high school who taught geometry. He was a good teacher but wasn’t a very nice guy sometimes. I learned one thing that stuck with me and helped me through this process. That thing was the only stupid question is the one that isn’t asked. I adopted that and I asked a lot of questions. If I didn’t know the answer and couldn’t find the answer, then I would find someone who would help me through that process.
The company has had a very long relationship with Skadden. As outside counsel, Skadden took the company public back in 1993 and has done some of the larger M&A projects for us. The partners in Chicago at Skadden that I was working with were very helpful in my maturation process. Kim deBeers in the Chicago office and Peter Krupp, who is now retired for many years, were always available to me. Kim and I still talk frequently and Skadden still helps us with a lot of our major projects. If we’re doing a major acquisition or any type of securities work that is out of the ordinary, they’ll be involved with that.
In-House is Very Fulfilling
Chris: What advice would you give attorneys currently in private practice who aspire to go in-house to focus on one client?
Jeff: Having one client is great. Of course, if you don’t make that client happy, it’s not so great. There’s a steady stream of work and you get to focus. The great thing about being in-house is that I’m not writing down time on timesheets anymore. It took me about three days to get over that. I don’t miss it. It’s been exciting because it allows you the resources and the time that you need to become acquainted with things that I certainly had not been acquainted with until I got here. I think being in-house is very fulfilling.
Chris: What advice would you give attorneys who want to go in-house?
Jeff: Well, if you’re going to a publicly-traded company, having a background in the things that I didn’t, candidly, would be a good thing. A background in business organizations, finance, or accounting are very helpful. Focus on those types of things if you’re still getting your education. If not, focus on those things in your practice.
Candidly, Chris, I think that people who are motivated find success. I won’t say I’m smart, but I work hard. I’m driven to try to get the best results for my client that I possibly can. I think most lawyers do. So, if you’ve got a brain, a desire, and some ambition, then you can do this.
Chris: Jeff, what do you look for in hiring talent for your team?
Jeff: It depends on the subject matter area where we have a need, but I look for experience in that area. It’s not always easy finding the right person because we’re in a fairly small community. Springfield is a small city with a population of a couple hundred thousand people. By and large, I have hired people that are fairly local to the area. I look for people who are smart, articulate and have the drive to succeed. We have a corporate culture here at O’Reilly that is very important to us. I look for people that I think marry up that culture.
Chris: Jeff, how would you define leadership?
Jeff: Leading by example is key. It’s important for me to do and for my folks to see me doing the hard work that needs to be done. I believe in fixing the problem, not passing blame when there are issues. In a company our size, there are always issues. There are always things that we’re trying to fix that almost never were created by any of us. Rolling up your sleeves, listening to your client, being calm, being workmen-like, and taking the steps that you need to be successful is how I approach leadership.
Missouri Tort Reform for Product Liability
Chris: Would you share about the work you’re doing related to tort reform in the state of Missouri?
Jeff: We’ve been pursuing and continue to pursue some tort reform in the state of Missouri for the last couple of years. In particular, they have been focused on getting a statute of repose passed in the state for product liability. Missouri has statutes of repose for many things, but products aren’t one of those things.
We’re focused on that because O’Reilly has been around since 1957 and we’ve grown a lot. O’Reilly is not a company that manufactures anything, designs anything or provides package materials that provide warnings or instructions. We get our products from quality suppliers and those are the folks that we rely upon to do those things. All too often we find ourselves defending products that others have manufactured 20 – 50 years ago because of how the tort system works in Missouri.
We think it’s fundamentally unfair to defend a product that you didn’t manufacture, design, or provide a warning for. After so many years, it’s very difficult to do that, so we’ve championed this statute of repose which would preclude lawsuits against innocent retailers for products 15 years after they hit the stream of commerce. If they have a useful life that’s longer than that, of course, then that would be extended. It’s something that I’ve been passionate about and been working on for the past couple of years and will continue to work on until we see some success.
Chris: Is there precedent in other states for bringing this to Missouri?
Jeff: Not every state has a statute of repose for products, but it’s approaching half that do and some surround us. I view it not only from a litigation perspective and frankly, a fundamental fairness perspective, but one that affects business development within the state of Missouri. Missouri has sometimes been known as the “Show Me Your Lawsuit” state. If there’s ever going to be meaningful business development in Missouri, then we’re going to have to do something to level the playing field. I’m suggesting that it could be fairer than it currently is.
Chris: Jeff, what part of the process are you at?
Jeff: We’ve been working on this for a couple of years now and each year the legislature has gotten closer to pushing a version of this through. Last year we had more support than the year before. We’re hopeful that this year will be the year for it, but if it’s not, we’ll continue our efforts.
Relationship Advice for Outside Counsel
Chris: What steps are you taking towards modernizing your legal department?
Jeff: Technology can always be utilized to make things better and easier and we look at those things constantly. We’ve got a fairly small department for a company our size. We have nine lawyers and the department is up to 30 or so with paralegals and legal assistants. Being in a company that has operations nationwide, it’s difficult to do all of the work in-house. It’s difficult to be an expert about whatever’s going on in California, for example, and so we will rely upon and continue to rely upon outside counsel a lot.
I do see that relationship evolving. When I got here we had many outside firms that we used and that number is fewer today. This is due to a quality perspective to know who is representing us, but also I want to have a relationship with those lawyers and I want them to know the company. There’s a certain learning curve to having a good relationship with the client. The folks that do a good job, that really know us and what we’re trying to accomplish make for a better relationship. So, we focused on narrowing the number of law firms over the past few years and it’s been whittled down quite a bit.
Chris: Any additional advice that you feel would be important for outside counsel to know?
Jeff: I look for people who won’t sugarcoat the truth, and will give me an opinion. I’ve worked with a lot of outside lawyers over the years. At the end of the day, they all want to get paid but some of them are more than happy to just say, “Well, it’s your money. You make the decision,” and they’re right about that. Ultimately, the company does have to make the decision, but it’s helpful when the attorneys are willing to give you advice.
We pay a lot of money for work and we want that advice. I much prefer the lawyers who will give me that advice. I may not take it or I may not agree with it, but I think that they have to be willing to draw their line in the sand and say this is what I think the outcome is going to be. I’m smart enough to know that lawyers don’t guarantee results and I don’t expect that, but I do expect them to tell me what they would do if they were me. I think that more lawyers should do that.
The other things are work hard, do a good job, and be fair in your billing. The lawyers who have success with me are the ones who provide good results at a good value. Most have reviewed the bill before it comes to me and removed the stuff that shouldn’t be on there. They bill me for what they should and that makes for a relationship with a lot more trust.
Family and Travel
Chris: Let’s transition, tell us about your wife and children.
Jeff: My wife’s name is Penny and she’s a lawyer. She is retired general counsel for Missouri State University. We’ve got three daughters. The oldest is going into her last year of law school at Georgetown. Our second daughter is a junior at Baylor and our youngest daughter is just starting high school.
Chris: As a family, how do you enjoy your time off?
Jeff: We always try to take a trip or two together if we can. It’s becoming harder as the kids get older. Our oldest daughter is married and had a clerkship this summer. We like to spend as much quality time as we can and that usually involves a spring break trip or a summer vacation.
Chris: Do you and your wife have a bucket list or a dream trip on the calendar?
Jeff: Many. Right now we really enjoy going to Italy and have been there a couple of times. My wife studied in Scotland for a year in graduate school in Edinburgh and I’ve never been, so we’d like to visit there. We’d like to get to Ireland as well. We went to Greece this past year and visited Athens and Santorini. That was a great trip with all the kids which was fun.
Chris: Did you meet your wife in law school?
Jeff: No. Actually, we met practicing law.
Fiction on His Bookshelf
Chris: What’s on your bookshelf and what books do you recommend to my listeners?
Jeff: I read fiction. I find it tough sometimes to read heavy things after having been at work all day and doing that. My wife got me a book for Christmas and it’s called The President’s Devotional. It’s a book compiled by Joshua DuBois, who sent President Obama a devotional every morning.
When I go home at night and read, I’m working my way through the Daniel Silva series of books. There’s also an author named Paul Doiron, who lives in the midcoast of Maine and writes books that are based there which is one of my favorite parts of the country. I’m working my way through his books as well right now.
St. Louis Cardinals vs. Kansas City Royals
Chris: Last question, Jeff, who would you root for if the St. Louis Cardinals played the Kansas City Royals?
Jeff: Well, Springfield has the Double A Cardinals, so we’re Cardinals fans because of that, but if I’m driving to a ballpark to watch a game, I’m going to the K. So, the answer would be Kansas City every day of the week and twice on Sunday.
Chris: Jeff, it’s been an honor and a pleasure. Thank you for your time on the show.
Jeff: Thanks, Chris. Appreciate it.
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