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Facebook hires general counsel as it continues to grow

September 29, 2008 | 12:01 am

Mark Zuckerberg

Young upstart Facebook is growing up at Internet speed.

The latest sign: Its freshly installed management team has hired a legal gun with a loaded resume that includes serving as a White House lawyer who helped coordinate the response to the investigation into the leak of CIA operative Valerie Plame's identity and serving as chief of staff to former U.S. Atty. General Alberto Gonzales.

Ted Ullyot will join Facebook as its vice president and general counsel next month. Ullyot, who also has had major private sector stints including as a top lawyer for AOL Time Warner Europe, is leaving a partnership with law firm Kirkland & Ellis and will relocate to the Bay Area, he said in an interview Friday.

"We view Ted's joining us as just another reaffirmation of the fact that we are working at the cutting edge of lots of incredible innovation," said Elliot Schrage, Facebook's vice president of communications and public policy (and himself a lawyer). "He has an extraordinary combination of private legal practice and public sector experience. So many of the legal issues we face touch on both of those arenas. He is equally comfortable helping us expand internationally as he is in helping us navigate complicated legal issues we may face in Washington. Ted's arrival really demonstrates we're a little more grown-up."

Ullyot also complements the Facebook team from a political perspective. "Ted has extremely strong connections with the Republican party, and we think that's a good thing," Schrage said. And it could make for some interesting debates. Facebook founder and CEO Mark Zuckerberg's No. 2 is Sheryl Sandberg, who was chief of staff at the Treasury Department during the Clinton administration.

This is just the latest milestone in the maturing of Facebook, which, with more than 700 employees, 100-million-plus users and ambitions of becoming a public company, is filling out ...

... its management team with operational heft. In March, Facebook lured Sandberg, a longtime Google executive, to work under Zuckerberg -- who had already recruited Chief Financial Officer Gideon Yu, formerly with YouTube, and Chamath Palihapitiya, who used to run AOL's instant-messaging business. At the same time, some executives have left Facebook, including Owen Van Natta, the former chief revenue officer and chief operating officer.

Zuckerberg, 24, said he realized that he needed to bring aboard seasoned executives who could help turn Facebook's soaring popularity into a revenue-making machine and expand the Facebook franchise internationally.

It's a departure for Zuckerberg, who started Facebook out of his Harvard dorm room in his sophomore year and maintained his college lifestyle after deciding to move his business to Silicon Valley. But that all began to change, particularly last year when Microsoft invested $240 million in Facebook, valuing the start-up at $15 billion.

With Facebook's rapidly rising profile has come intense scrutiny as well as legal headaches. Already Facebook has riled privacy watchdogs and its users with early attempts to target advertising.

"One of the things that we emphasize when we interview people is the fast-paced nature of what we do," Schrage said. "When we met Ted, we felt pretty comfortable he had a background that demonstrated that he could appreciate high stakes and fast pace."

Ullyot certainly has the breadth of legal experience as well as the regulatory and legislative chops to guide the young company. He began his legal career clerking for U.S. Supreme Court Justice Antonin Scalia and Judge J. Michael Luttig of the United States Court of Appeals for the Fourth Circuit (who is now Boeing's senior vice president and general counsel) before being recruited by Kenneth Starr to Kirkland & Ellis.

At AOL Time Warner, Ullyot was a vice president and associate general counsel, reporting to Paul Cappuccio, executive vice president and general counsel of AOL Time Warner and a Kirkland & Ellis alumnus who along with Starr helped recruit Ullyot.

Ullyot later became senior vice president and general counsel for AOL Time Warner Europe, working with the legal and policy staff in Europe and European Commission officials. Schrage points to that experience as a big asset as Facebook expands internationally.

As for his stint in the Bush administration, that was something he had long sought and something for which he remains grateful, Ullyot said. Despite the politically charged high drama, he said: "I have nothing but good to say about it." It raised eyebrows in Washington when Gonzales took three White House lawyers with him to be his top aides at the Justice Department, including Ullyot.

Ullyot said that working for the Justice Department was another career goal. He stepped down in 2005 and joined ESL Investments Inc., a Connecticut investment firm run by billionaire investor Edward S. "Eddie" Lampert to gain experience in the financial markets, he said.

Ullyot took Lampert's seat on the board of AutoZone. Ullyot said he planned to remain on the AutoZone board. In May, Ullyot returned to Kirkland & Ellis as a partner, focusing on appellate litigation, administrative law and antitrust law. Kirkland & Ellis recently opened an office in Palo Alto. (Will he send Facebook business to the firm? "I think of the firm in the highest terms, and I have used the firm in previous stints as general counsel," he said. "I just look forward to getting into Facebook to see what the legal needs are.")

And the 41-year-old San Francisco native has another thing going for him, at least as far as Zuckerberg is concerned. He's a Harvard grad (although he got his law degree from the University of Chicago).

So why Facebook? "It was extremely attractive to me from the outset," Ullyot said. "It's an innovative company and a growing company in size and presence and profile. From a lawyer's perspective, the legal issues are novel and interesting." Among the draws: "Operating in a fast-moving environment where the legal framework is less-developed."

It certainly will be a far less formal environment. Washington is strictly a suit-and-tie town. At ESL, the dress code was "casual but respectable" (i.e., pressed khakis with a coat and tie on hand for meetings), Ullyot told the Wall Street Journal at the time. At Facebook, where Zuckerberg is known for his uniform of T-shirts, jeans and Adidas flip flops: "I doubt you will see me in a tie very often," Ullyot said.

--Jessica Guynn

Photo: Facebook founder and CEO Mark Zuckerberg  Credit: Paul Sakuma / Associated Press

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