Legal Career Spotlight: General Counsel of State Farm
Published: Nov 18, 2019
Steve McManus is Senior Vice President and General Counsel at State Farm. He is a first-generation college and law student, worked for State Farm while pursuing a law degree at Seton Hall University at night, and joined the Law department in 1991. Steve has never worked in private practice—his entire legal career has been at State Farm. He is a member of the Leadership Council on Legal Diversity and a member of the Board of Counselors of Equal Justice Works. His favorite band is The Clash, and his favorite TV attorney is Billy McBride from Goliath. He has a wife and two daughters, one of whom grew up to be the Associate Law Editor here at Vault and negotiated an interview about his incredible career path.
Vault: What initially drew you to law school?
Steve McManus: A couple of things. In graduate school, I took a business law class and found it interesting. Then while working for State Farm in Claims, I interacted with many lawyers and found the legal issues to be the most interesting part of the work. I ended up going to law school at night while continuing to work for State Farm during the day.
Vault: You went straight from law school to in-house work at State Farm. How and why did you choose that particular path instead of BigLaw?
Steve: When I started working for State Farm, I expected to stay for a year and move on. It turns out, I really like the company. It’s a mutual insurance company, which has a history and culture of serving its policyholders. Over the years, I have worked with many great people who try to help customers who have been injured in automobile or other accidents or have incurred property damage to their homes or automobiles. I’m proud of the company’s efforts of helping people through difficult and unexpected circumstances.
Private practice was not something I strongly considered because I enjoyed the work I was doing while in law school, including the opportunity to work with State Farm’s general counsel at the time on a variety of legislative and regulatory matters relating to automobile insurance. Upon graduation from law school and passing the bar, he asked me to join the Law department, and I agreed.
Vault: What did your in-house role(s) look like before your current position?
Steve: Early on in my career, most State Farm attorneys weren’t specialized; we did a little bit of everything. Now we have a department with two major divisions: An in-house insurance defense program, which we call the Claim Litigation Counsel division, and the Corporate Law division. The former provides insurance defense services to our policyholders from 38 offices across the country. The latter is akin to the law department in most major corporations, handling class action and other litigation, leases, contracts, business lines counseling, and corporate and compliance counseling for the company. In addition, our department oversees the company’s legislative, regulatory, political, and public policy interests. Immediately before becoming general counsel, I was overseeing state and federal legislative and regulatory matters and working with some counseling sections of the department. Because of the nature of this work, our family moved around over the years, including stints in Georgia, California, and Illinois—where State Farm is headquartered.
Vault: What does a general counsel role look like in a broad sense? And what about in the day-to-day?
Steve: Well, there are a few aspects to it. First, my overall responsibility is to oversee the legal affairs of the company; help manage its legal risk; and tend to its interests in the litigation, political, legislative, and regulatory arenas. I provide both business and legal counsel to senior executives in the organization, in nearly equal parts. Lawyers are trained problem solvers, so we’re expected to know our clients’ businesses at a deep level in order to help them solve their business and legal problems. There are leadership duties as well; we employ approximately 800 lawyers and a total of approximately 2,000 employees in the department.
As a leader, I have to develop my leadership team, do succession planning, and bring talented people into the organization. We make sure we’re delivering timely and effective legal services while judiciously managing our budget. So that’s also a big part of my work. In this role, I’m also viewed as an enterprise leader and spend a significant amount of time helping to develop and mentor others and working to help the organization succeed. Finally, I do a fair amount of work with various external organizations to improve the nation’s system of civil justice, provide access to essential legal services for those in need, and to advance diversity and inclusion within the legal profession.
Vault: You’ve been with State Farm for your entire legal career—what perspective has that given you in your current role?
Steve: As I said earlier, I initially only planned to stay with State Farm for a year, but I like the company and I think the people who work here are wonderful. State Farm takes care of its employees and its policyholders—I started working here and I stayed because the company has a noble mission. I’ve worked here for 34 years—29 in the Law department—and I’ve largely been in an external-facing job throughout my career, so my perspective has been informed internally and through my external activities. Over that time, I have learned a lot about the business of the company, the insurance and financial services industry, and about the many areas of law by which the business is regulated and the labyrinth of legal risk that needs to be navigated in a very dynamic environment. And, after all this time, I still go to work every day and learn new things, which is what I love about my job.
Vault: What was it like growing in your career with and alongside State Farm’s legal department?
Steve: When I joined the Law department in January 1991, there were 35 other lawyers. The growth has been extraordinary. Some attorneys who had been working in other departments were consolidated into the Law department. The litigation explosion in the 1990s required additional staffing, State Farm entered other lines of business and began offering banking and securities products, and the burden of regulation continues to grow. Most notably, our Claim Litigation Counsel program was established to provide insurance defense representation to State Farm policyholders. Through all of this change, we have tried to continuously improve the legal services provided to the organization to enable the business and help the company succeed in serving more customers. The magnitude of the internal changes and the dynamic external environment help keep us nimble in anticipating emerging trends and legal needs and ensuring we are properly aligned and staffed to serve the organization.
Vault: What are some of your goals and focuses during your time as general counsel?
Steve: I would say a lot of it is focused on our people. We have a lot of great people in the organization, but baby boomer retirements are occurring with increasing frequency. So succession planning is important, including recruiting the very best people we can and accelerating their development so they’re able to take on more and more challenging work. Then we plan for continuity and knowledge management, so we don’t lose necessary knowledge or skills as people retire. We’re also enhancing already-strong diversity and inclusion programs and pro bono programs in the department.
We’re creating more efficient administrative and legal operations functions and improving the ways we work with outside counsel. This includes leveraging technology across the department to streamline administrative and repetitive work. We want to automate the manual labor. So we’re experimenting with AI technologies and increasingly digitizing the work we do. One example of this is we’re implementing robotic processing technology that’s a form of AI to direct subpoenas to the right place in the first instance.
This is all on top of delivering quality, cost-efficient legal services in an increasingly complex legal environment.
Vault: What’s been the highlight of your career so far?
Steve: Getting to work with some really talented and amazing people in our department and more broadly in our company to modernize the way we do business, in order to better serve our customers. That’s been a highlight. I like to solve complex problems, and there’s no shortage of those in this position. The position enables me to interact with extraordinary people from all walks of life and I interact with some of the best and most talented people in the law. Also, no two days are the same.
Vault: Any advice for law students or current attorneys looking for an in-house position?
Steve: My advice for anyone wanting to move in-house would be that you have to understand the culture of the company you’re hoping to work for. Know their business, understand their culture, and try and understand how to approach the work that they do. Also, Administrative Law is a great class to take in law school if you’re interested in an in-house career, especially if your employer of choice is in a highly regulated industry.
For law students in general, I would say that discretionary effort matters. Help others, and be kind to everyone. Look for the questions not being asked. There’s always opportunity in adversity; failure can either set you back or make you stronger—choose the latter.