Train of Thought

In conversation with Peter Falconer

Peter Falconer has always had an interest in trains. He even spent hours running a train set in his basement when he was a kid. As associate general counsel for GATX Corporation, a Chicago-based lessor of railcars and locomotives, he now comes to work every day in the rail business.

“It’s a perfect fit,” Falconer says.

That being said, flipping a switch that makes a small train run around a model track is quite different than running corporate finance deals, advising on corporate governance securities issues, and setting up a railcar leasing company in India. It’s a great deal to process, but in an interview with Modern Counsel, Falconer explains how he tackles complex issues and provides practical legal advice to his business people.

Much of your job entails being able to analyze and explain complex legal issues in a clear and concise manner that people at all levels of GATX—be it the board of directors, management, employees, or investors—can understand. How do you tailor a message to a particular audience, even if there are very specific and complex variables that have to be considered?

There is always a tension. You have to make sure whatever you’re communicating is accurate, the rationale behind it is clear, and the answer is understandable. In legal practice, most answers are not crystal clear, which is why people call lawyers in the first place. Rather than hear every twist and turn of your analysis, they want to know the answer and why you think it’s the right one compared to other potential alternatives.

Answers to complex legal problems are usually driven by a number of different considerations, and trying to solve all of them at once is very difficult. I find it easier to identify the various components of a legal problem, solve for each component, and then put the answers back together to come up with practical, actionable legal advice for the business. How you explain it depends on the audience. Your front-line business people may want a more detailed explanation while other audiences, such as executive management or the board of directors, may prefer a more concise summary of your analysis. I always try to explain things in plain English, and to keep it and as short and simple as possible.

Was that a challenging skill to develop, or were you always able to get right to the point?

It definitely took some years of practice. Lawyers have to analyze all sides of a problem to come up with our recommendations, so the tendency is to want to fully explain the various issues we considered in reaching our answer.

As a young associate at Latham, I remember being asked to write my first memo to a board of directors. I wrote what I thought was an excellent five-page memo and gave it to the partner to review. A day later, the partner came into my office, dropped my memo (which had no comments marked) on my desk, and asked me, “What’s wrong with this memo?” I had thought it was brilliant and struggled to come up with anything in response. After I guessed wrong a couple of times, he firmly said, “It’s way too long.” I thought, “How can five pages on such a complex issue be too long?”

He explained to me that a board doesn’t want to read five pages on the topic and told me to get it down to one page—maybe two at most. I was flabbergasted and asked how I could possibly explain something this complicated in one or two pages. He looked me in the eye and told me, “Your job is to make it simple. Get it down to two pages max.” I never forgot that experience, and that partner ended up becoming a very valuable mentor to me in my career.

What has surprised you the most about your role at GATX?

The most surprising thing has been how my practice and skill set has grown during my time here. GATX is a mid-cap company listed on the NYSE, but the issues the business generates are as complex and diverse as you would find in a much larger company. We have one of the world’s largest railcar lease fleets; maintenance facilities that do repair work on railcars; operations in North America, Europe, India, and Russia; labor unions; multiple asset classes from rail to jet aircraft engines; and we own the largest US-flagged shipping company on the Great Lakes.

The diversity of the company’s operations and the small size of our legal department has given me opportunities to do work well outside of my core corporate/securities skill set. For example, I was the lead lawyer on GATX’s expansion into India, where we became the first company licensed to lease railcars in the Indian market, and have been counsel to that business on all legal matters since its formation. My work on India ran the gamut from creating the company, negotiating the license with Indian Railways, leasing the office, hiring the employees, buying railcars, and leasing them to customers to litigation and arbitration following a large customer’s default on its lease.

In a sense, I have functioned as general counsel for that part of GATX’s operations, which is a role I enjoy due to the variety of issues involved. The great thing about working for this company is that you’ll never get bored, and your job will never be the same a year from now as it is today.

Do you find yourself having to learn things on the fly, or did your background prepare you for the kind of twists and turns that this job takes?

The positions I’ve had were with companies in very different industries, so I’ve had to learn on the fly quite a bit during my career. Before joining GATX, I worked for a Chicago-based software company, CCC Information Services. While I handled the corporate governance, SEC compliance, and transactional work, I also ended up working on deal structures, such as product development alliances and licensing agreements, which required a working knowledge of intellectual property law and software licensing, but I had no significant prior experience in either area.

When I worked as a corporate lawyer for a big law firm, I could outsource the IP work to an IP partner. I couldn’t do that at CCC, so I had to quickly learn enough about IP law to issue-spot and be effective representing the company in those transactions. Coming to GATX was similar, as the rail industry and asset leasing business were new to me. By working on various matters, I learned which issues were important to a lessor and maintainer of railcars, and I’ve also had to expand my practice to handle certain maritime work for our Great Lakes shipping company and ERISA work for our pension and 401(k) retirement plans. I will never be a maritime or ERISA expert, but I have learned enough about those areas to practice effectively and know when to involve outside counsel.

What would you say is the best part of the job?

I really enjoy working closely with our management team to solve a problem or take advantage of an opportunity. Obviously, lawyers advise on legal issues, but I like being part of the discussion on the larger business decision where I can help management analyze the problem and integrate the legal analysis with relevant business issues to make the best decisions for the company.