The First Filter
That’s what Charles Schwab calls his General Counsel Carrie Dwyer B.A. ’73, J.D. ’76
BY TIMOTHY HARPER
Carrie Dwyer has had a remarkable career, which includes work at government and stock exchange regulatory agencies, a major law firm and, ultimately, as the general counsel seat for Charles Schwab, the financial services behemoth. Charles Schwab has nearly 14,000 employees and $5 billion in annual net revenue, providing brokerage, banking, and investment services to institutional clients and millions of individuals. “She’s always been my first filter for anything of business importance,” says Charles Schwab, founder of the firm more than 40 years ago. “Carrie has always been the first person I would go to with my crazy ideas about new services for investors…She could tell me in a second whether I should pursue it as a business idea or if it wouldn’t meet the regulatory tests.”
After graduating from Santa Clara Law, Dwyer landed a job at the American Stock Exchange. The most junior lawyer on a 15-attorney team, she handled whatever the general counsel threw at her, including basic regulatory work and dealings with exchange members. Dwyer rose through the ranks, and by the time she departed the Exchange after 12 years, she was general counsel and senior vice president. “I had a 2-year-old, and I decided to take a few years off to be with her,” Dwyer says. She and her husband added a son, and two years turned into five as the growing family moved from Manhattan to Brooklyn to the leafy Westchester suburbs.
Re-entry into the corporate world wasn’t easy. “Many of the people who always told me how great I was wouldn’t even take my phone calls,” she says. She finally landed a part-time assignment at Milbank, Tweed, Hadley & McCloy in New York. Soon after, Arthur Levitt, who had been her boss at AMEX, was appointed chair of the U.S. Securities and Exchange Commission (SEC). He asked her to come to Washington as his chief counsel in 1993 to help move forward his ambitious agenda for the SEC. “Arthur was really committed at the SEC to being an advocate for investors,” Dwyer says. “It was something that resonated with me.”
One of her biggest enforcement cases involved price fixing against NASDAQ and the National Association of Securities Dealers (NASD); several big-capital markets firms, including Charles Schwab & Co., were implicated for going along with the price fixing. The rest of the implicated firms denied wrongdoing, or assured Dwyer that their conduct was standard for the industry. “Chuck Schwab kept coming in and talking to us,” Dwyer says. “Schwab was advocating for reform.” She was impressed with Schwab, and Schwab was impressed with her. When the case ended, Dwyer was invited out to the firm’s San Francisco headquarters to talk about a job.
Schwab’s history of a customer-first culture, along with Dwyer’s long-simmering desire to move back to the San Francisco Bay Area, led her to leave the SEC after three and a half years. In late 1996, Schwab created a top-tier position for her, combining all the firm’s legal oversight into one role. Technically, her title was executive vice president for corporate oversight, but she soon took on the general counsel title, too.
If the classic financial-services lawyer tends to deny wrongdoing, avoid responsibility, and resist consumerprotection regulations—all the while brimming with an overabundance of confidence—Dwyer breaks the mold. She even admits to bouts of misgivings and doubt. “It’s always really scary to take on something big that you’ve never done before,” Dwyer says. “I kept telling myself, ‘I think I can do this,’ but you never really know.”
Initially, she managed about 75 people. Now it is almost 500. She is in charge of all the firm’s legal functions and the far-ranging compliance and regulatory oversight required of the firm. One group of her lawyers is in charge of contracts, employment, litigation, arbitration, mergers and acquisitions, and other corporate transactions. Another group covers the core investment business, including retail, advisory, banking, and retirement-planning services. She is also in charge of Schwab’s lobbying effort and oversees internal information security and internal audits, along with compliance units that ferret out fraud and money laundering, and a unit that monitors dealings with the Federal Reserve. “It’s a pretty tough job if you’re doing it right,” she says. “You have to think strategically all the time, about how day-to-day transactions can affect the long-term business of the company.”
“Carrie Dwyer is the GC that every CEO and outside counsel dreams of,” says one of her outside counsels, Faith Gay, co-chair of the national trial practice group at Los Angeles-based Quinn Emanuel Urquhart & Sullivan. “She is perfectly attuned to Schwab’s needs while being open to new approaches to thorny issues. She is unafraid of risk without being reckless. She goes deep on every issue without being inefficient. Above all, she knows how to make a decision without dithering. What more could a well-run business ask for?”
“Carrie’s mastery of corporate and securities law is extraordinarily impressive, as is her deft handling of interpersonal relationships,” says Stephen J. Senderowitz, partner at the Chicago-based firm Winston & Strawn, who has worked as an outside litigator on several major Schwab cases. “She creates a culture of encouragement among her staff and outside counsel.”
One of the worst experiences of her career came during the fallout from the housing market crash, when a Schwab short-term bond fund did poorly and the firm was hit by an SEC case. State regulators and several class action lawsuits claimed that investors were not warned about risks in the fund’s mortgage-backed securities. “I lost a lot of sleep over it,” Dwyer says. “Occasionally during that [time], I wondered if I was the right person for this job. I’m sure other people wondered that, too.” Ultimately, she helped guide Schwab to $350 million in settlements and a raft of new internal safeguards. “I’d be very uncomfortable working in a firm that was just about maximizing profits and didn’t care about the business it was in,” Dwyer says. “I really like working for a place that wants to do the right thing.”
Editor’s Note: This article originally appeared, in a longer form, in the September 2013 issue of Super Lawyers Business Edition, published by Thomson Reuters.