Microsoft's top lawyer, Bill Neukom, is retiring

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After serving 22 years as Microsoft's legal face, Bill Neukom is retiring at the end of June.

Brad Smith, who has managed the company's international legal and government affairs as deputy general counsel for worldwide sales, will take his place with the title of senior vice president for legal and corporate affairs.

"Bill has been a dynamic leader of his department," Smith said. "He not only founded this department, he has defined it."

Chief Executive Steve Ballmer also praised Neukom for his role in helping build the company. "Bill is the consummate professional, and he leaves our law department and our company well-positioned for the future," he said in a statement.

The announcement comes after Microsoft has made significant progress on several legal issues. Earlier this month, Microsoft reached a tentative settlement with the U.S. Department of Justice and nine states in the landmark antitrust case against the company. Nine other states, however, are continuing to press the case in court in an attempt to obtain a harsher restrictions on the company for violations of federal antitrust law.

Bill Neukom's legal legacy at Microsoft Here are some high-profile cases that occurred under Bill Neukom's watch. U.S. vs. Microsoft, filed in 1998: The Department of Justice and states sue the company in one of the most significant antitrust cases in American legal history. The case has roots in federal government inquiries into Microsoft practices dating back to 1990. (Settlement proposed, nine states continue to pursue the case in court.) Bristol Technology vs. Microsoft, filed in 1998: A Danbury, Conn., software maker contends Microsoft threatened to cut off access to key code for Windows NT. (Jury awards Bristol $1 in compensatory damage, but judge orders $1 million in punitive damages; settlement on damages reached in February — reported to be $4.8 million.) Sun Microsystems vs. Microsoft, filed in 1997: One of Microsoft's most steadfast rivals sues over licensing of Sun's Java technology. (Settled in January, with Microsoft paying Sun $20 million.) Caldera vs. Microsoft, filed in 1996: Orem, Utah-based company, a Linux developer, contends Microsoft used anti-competitive tactics against DR-DOS, an early operating system. (Settled in 2000 for $155 million.) Vizcaino et al. vs. Microsoft, initiated in 1992: Contract workers, who came to be known as "permatemps," sue over compensation packages. Case drew wide attention to the hiring of temporary workers in the tech industry. (Court originally found for Microsoft, but appeals court ruled contract workers were entitled to discount stock-purchasing; $97 million settlement approved in May.) Apple Computer vs. Microsoft, filed in 1988: Apple contends Microsoft (and others) illegally copied the "look and feel" of the Macintosh's graphical interface. (Judge threw out key parts of Apple's case; an appeals court upheld the judge in 1994.)

This week, Microsoft reached a preliminary settlement on more than 100 class-action lawsuits alleging the company had overcharged consumers for software. Under the settlement, Microsoft would donate $1 billion in cash, software and equipment to the poorest schools in the country.

"He's played a very significant role in Microsoft history, one that's not acknowledged in proportion to the amount of impact he's had on the company," says Paul Andrews, a former Seattle Times reporter and co-author of "Gates" and author of "How the Web Was Won."

Neukom, 60, known for his trademark bow ties, led Microsoft through several major lawsuits. He led Microsoft's legal effort in the company's dispute with Seattle Computer Products over the rights to the original DOS code, which Microsoft eventually settled on favorable terms.

He set the legal strategy when Apple Computer sued Microsoft for infringing on Apple's copyright by illegally copying the "look and feel" of the Macintosh interface. That court fight lasted for years but Microsoft ultimately prevailed.

"The case law that came down in the Apple suit was precedent-setting," said Larry Bailey, a partner at Preston Gates & Ellis and managing attorney for the law firm's Microsoft account.

Before he joined Microsoft, Neukom worked at Shidler, McBroom, Gates & Lucas (now Preston Gates & Ellis), the law firm of Chairman Bill Gates' father. Neukom represented the proponents of Initiative 276, which instituted the public-disclosure law for the financial affairs of political candidates and officeholders. In 1980, he ran for state attorney general as a Democrat and lost in the primary.

A year earlier, the elder Bill Gates had asked him to look after the legal affairs for a small software company his son was moving to the Seattle area from Albuquerque, N.M.

He became Microsoft's first internal legal counsel in 1985, with a staff of two — the legal department now has 600 employees.

Neukom, who holds the title of executive vice president, has also been instrumental in building up the company's philanthropy.

He has not decided what he's going to do after he steps down. He currently serves as chairman of the Seattle Chamber of Commerce and is on the boards of several nonprofit organizations. His stock in Microsoft is worth about $108 million.

"The one characteristic of Neukom is he is so unflappable," Andrews said. "Nothing seems to rattle him."

The one case he is best known for, of course, is the landmark antitrust case. Though he did not argue the case in court, he directed a legal strategy that came under heavy criticism, especially as the judge ordered the company to be broken up, among other remedies. Now, the company's attempt to draw the case out has resulted in a settlement proposal that has come under heavy criticism by competitors and others.

Smith will take over day-to-day operations of legal affairs in January.

For the past five years, Smith, 42, has provided legal counsel for the company's international sales and marketing, directing the anti-piracy and anti-counterfeiting efforts. Before 1993, he worked at Washington, D.C.-based law firm Covington and Burling, where he handled antitrust and intellectual property issues.

He said his biggest priorities are establishing a strong track record for complying with consent decree if the recent settlement with the Department of Justice is approved, reaching out to other companies in the industry and establishing closer ties with the government on issues such as privacy and security.

"As we are hopefully coming out of what has been characterized by this sharp litigation, we have an opportunity to forge a new relationship with government and with the rest of the industry," Smith said.

Art Courville, senior vice president and general counsel at Symantec, a maker of antivirus software, said Smith has a good chance of building those relationships.

"His contact with people in the industry has been more direct," Courville says. "In that sense, I think he's got an advantage over Bill."

Sharon Pian Chan can be reached at 206-464-2958 or schan@seattletimes.com.