From Regulator to General Counsel: Why Industry Immersion Matters with Xcaliber International’s Eric Estes

Estes:

That experience really shadows most of what I do. It’s where I learned to practice law. I learned discovery there, I learned how to litigate, and I learned how to communicate with outside counsel and opposing counsel.

When you spend that much time in a very specific area of law, you develop a lot of expertise. That expertise pays dividends when you move in-house. You know where the pitfalls exist. You know how to communicate to your new client which acts or practices may raise eyebrows with regulators.

It helps you ensure that what the company is doing never rises to the level of a regulatory or litigation problem.

One of the most important things it taught me is how to effectively communicate with government. When you’ve been on that side of the table for so long, you know how to talk to them.

Estes:

Compliance is a key part of Xcaliber’s legal function. In this industry, we have to track and trace every cigarette we sell — from Xcaliber’s door to wholesalers to the states. We have to communicate that data at every step.

One of the places we’ve been successful is by developing an interdisciplinary approach. I know I’m not an accountant, but we have people who are. If I need that kind of data, I’m not afraid to reach out and get it.

We built our system from the ground up, which gave us the opportunity to think carefully about what works best. That includes employing non-lawyers in the legal department. Early on, we hired a data analyst whose sole role is to gather, manage, and report data.

More broadly, I think general counsel need to develop talent that can think like a regulator.

If you’re in oil and gas, you need to understand how to communicate with energy or environmental regulators. If you’re in tech, you need to know how to explain to government how you gather and use consumer data.

Attorneys general have a tremendous amount of power. A lot of companies learn that the hard way on the back end. I think more companies should start thinking about getting ahead of those issues earlier.

Estes:

AI is probably a whole other conversation, but it really intrigues me.

You’re already seeing outside counsel use AI to do work that associates traditionally handled — research, early drafting, and similar tasks.

From an in-house perspective, that raises an interesting question: When the partners who developed their skills doing that work retire, how will that knowledge base be replaced if technology is doing those tasks?

That’s ultimately something law firms will have to address, but it’s also something in-house counsel should start thinking about. It’s one of the broader questions around AI that will become really interesting.

Estes:

In some ways we’re fortunate. The industry is highly regulated, but the regulatory framework is fairly stable. That allows us to focus on what’s expected.

But every legal department eventually has to expand beyond its core focus. Other issues will always arise.

That’s where pragmatism and proactivity come into play.

For me, pragmatism comes down to two constraints: time and resources. Resources might mean money, people, or both. So you have to ask yourself what can realistically be accomplished versus what the perfect solution would be.

One of my early mentors told me never to let the perfect be the enemy of the good. I took that to heart. I tell my team all the time: sometimes good enough is good enough.

At the same time, you have to be proactive. That means thinking strategically about the company’s needs and the regulatory framework and figuring out how to get ahead of problems.

If you’re ahead of a problem, you don’t have to react to it.

For example, if we identify a compliance issue or data issue, we go to the regulator and say, “We’ve noticed this, and we want to address it.” I never want something we can catch early to turn into a long-term, expensive problem.

Estes:

If you want to avoid constantly reacting to issues, you have to be more than a business partner — you have to be an effective partner.

There are a few ways to do that.

First, you have to be accessible. You have to be seen in the role. That means building relationships with leadership and interacting with them regularly.

Members of my team and I frequently go around the company and ask people a simple question: “What do you need from us?”

Second, if you want to be a strategic partner, you can never over-promise and under-deliver. If you say you’re going to do something, you have to do it. That’s how you build trust.

Finally — and I think this may be the most important — you have to learn the industry.

None of us, as general counsel, work in businesses where law is the business. You have to immerse yourself within the industry and learn it to be a partner.

If you don’t understand the company, you can’t really understand your role.

Estes:

I was fortunate early in my career. Within about eight years of being licensed, and six years into working at the Attorney General’s office, I was put into a role responsible for tens of millions of dollars in annual revenue.

That gave me a seat at the table fairly early. I was also placed on a legislative team, where I regularly interacted with other parts of government.

That experience helped prepare me to take a similar seat when I moved in-house.

But even if you have a seat at the table, you have to sit in it.

First, you have to build trust. That takes time. People need to see that you’re knowledgeable, reliable, and effective.

Second, you have to be the calm in the storm. That’s where the consigliere role comes in. You have to be able to evaluate unpredictable situations and honestly assess the risks and benefits of different decisions.

And finally, authenticity matters. You have to know who you are, know what your competencies are, and be honest about where your limitations lie.

If you’re not authentic, people will eventually see through it. And that undermines the trust that’s so important to both gaining and keeping that seat at the table.

Estes:

Our structure is a little different because we’re privately held. We don’t have a large board. But the fundamentals of communication are the same.

First, people don’t read memos. They don’t have time to read long legal analyses.

You have to build relationships. That means getting up from your desk and going to someone’s office to talk through an issue.

Second, keep your message simple and digestible. If you can’t explain something to a stranger on the street in a way they understand, you need to refine the message until you can.

And again, you have to know the industry. When your legal solution doesn’t align with a business solution, you’re going to fail — and you may set your client up for harm.

Estes:

When people think about ACC or bar associations, they often think about CLE or occasional networking.

For me, it was much more than that.

When I moved into this role, I didn’t have in-house experience. Most of my background was in government. So I had a lot of questions.

I don’t think anyone truly knows how to do this job until they’re actually in it.

I used ACC to find people who could answer those questions, support me, and help me find solutions. That required vulnerability. I had to show up and say, “I need help.”

But in my experience, ACC has never let me down. People genuinely want to help each other.

If you use the organization strategically, your career will be better for it.

Estes:

For me, community engagement has been about giving back to the places where the company operates.

The arts are something that’s personally meaningful to me, so I’ve volunteered with organizations like Circle Cinema and Tulsa Ballet.

I don’t think every GC has to be involved in the community to be effective. But for me, it’s helped.

It’s helped me be seen as a leader within the company because I’m active in the community.

But if you’re going to do that kind of work, you have to do it for the right reasons. Visibility alone shouldn’t be the goal. That goes back to authenticity.

Estes:

I play every day, but I wouldn’t call it a talent.

It’s something I enjoy, and it helps me relax. I also have a younger daughter, and it’s something we can do together.

So there tends to be a guitar in every corner of my office and every room of my house.

Estes:

Every company faces reputational risk.

To address that effectively, you have to be active in the company’s day-to-day operations. You have to understand the pulse of the organization.

When issues arise, I fall back on the ethical principles we learned in law school.

You ask simple questions: What’s best for the client? Is it ethical?

Then you work with leadership to address the issue in a way that protects the company’s reputation.

This is also where having a seat at the table becomes critical. If leadership doesn’t see you as a trusted advisor, they’re less likely to listen when you say, “We need to address this.”

Estes:

Mentorship has been foundational in my career.

I didn’t grow up in a legal family. When I went to law school, I knew very little about practicing law. Having a mentor early in my career was the cornerstone of where I am today.

That’s something I’ve never lost sight of.

When building a team, the first thing is to surround yourself with capable people. You can’t be afraid of being overshadowed. You’re only as good as your team.

Second, hire for the skills you need. Not everyone has to do everything. Some people are taskmasters. Some are project managers. Some are relationship builders.

Third, lead from the front. In ROTC, we learned that leadership means jumping out of the foxhole and saying, “Follow me.” You can’t ask someone to do something you wouldn’t do yourself.

Mentorship is also part of the responsibility of being a general counsel. People invested in you to help you reach this role. Now it’s your turn to invest in the next generation.

You also have to learn what can be delegated. A general counsel can’t do everything.

Finally, leadership means giving credit and taking blame. When things go well, give the credit to your team. When problems arise, take ownership.

As general counsel, you should throw an umbrella over your team so they don’t get rained on — even if that means you sometimes get drenched.

Estes:

It’s an incredible honor. When you look at the people who have received the award in the past and those receiving it this year, it’s an awe-inspiring group.

I don’t particularly enjoy the spotlight, so the way I make sense of the award is by sharing it.

I didn’t get here on my own. I’ve had people give me opportunities and help me succeed. I have an outstanding leadership team, an amazing group of lawyers internally, and excellent outside counsel.

I often say that I look tall because I’m standing on the shoulders of giants.

For lawyers aspiring to move in-house or become a GC, my advice is simple.

First, find a mentor — someone willing to invest in you and help you develop your talent.

Second, when opportunities arise, take them. Those opportunities rarely come around a second or third time.

Third, recognize your strengths and your weaknesses, and intentionally work to improve.

And finally, be patient. None of these things happen overnight.