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In the aftermath of Sam Altman’s sudden departure from OpenAI, WilmerHale has undertaken a comprehensive investigation with the twofold objective of aiding OpenAI in rebuilding its credibility and navigating beyond a tumultuous congressional hearing where it coached two university presidents.
Restoring Credibility for OpenAI’s New Board
WilmerHale’s inquiry aims to shed light on the circumstances leading to Altman’s firing at the Microsoft-backed startup. The investigation is crucial for OpenAI’s recently reconstituted board, providing valuable insights to make informed and credible decisions. According to James Park, a UCLA law professor specializing in corporate governance, maintaining corporate reputation is paramount for a company like OpenAI.
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Rebuilding Employee and Investor Faith
Beyond its role as an investigative tool, WilmerHale’s probe serves as a mechanism to rebuild faith among employees and investors. Simon Gaugush, a partner at Carlton Fields and former federal prosecutor, sees the investigation as a “showpiece” designed to restore confidence, especially for those who perceive Altman’s ouster as disruptive.
WilmerHale’s Crisis Management Reputation at Stake
For WilmerHale, this assignment is an opportunity to redeem its crisis management reputation, tarnished by its recent coaching of Harvard University President Claudine Gay and the subsequent resignation of University of Pennsylvania President Liz Magill during a congressional hearing on antisemitism. The firm, known for advising high-profile clients such as Meta Platforms Inc. and PurduePharma, faced criticism for providing narrow, legalistic advice during the hearing.
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Choosing WilmerHale: A Strategic Decision
The decision to engage WilmerHale came shortly after Altman’s dismissal in November. The reconstituted OpenAI board, led by Chair Bret Taylor, opted for WilmerHale’s expertise after interviewing several leading law firms. The move underscores the acknowledgment that navigating the spotlight amid controversies requires seasoned guidance, even if not consistently favorable.
Key Players in the Investigation
Leading the investigation are Hallie Levin and Anjan Sahni, senior partners based in WilmerHale’s New York office. Sahni, a former assistant US attorney, is set to become the firm’s managing partner in January. The team also includes notable figures such as Preet Bharara, Jamie Gorelick, and Stephanie Avakian, indicating the depth of WilmerHale’s experience.
Internal Probes: A Corporate Strategy
Corporate boards often prefer law firm investigations for their ability to identify internal problems protected by attorney-client privilege. These probes are designed to pinpoint compliance failures and pre-empt stakeholder challenges. The OpenAI investigation raises questions about whether WilmerHale will generate a written report and scrutinize the company’s corporate structure, with secrecy being a common approach in internal probes.
Regulatory Scrutiny and Transparency
While secrecy is often preferred in internal probes, OpenAI’s regulatory scrutiny over its partnership with Microsoft may impact the calculus. Maintaining transparency is crucial for avoiding negative perceptions, as UCLA’s James Park noted: “If they were to be secretive, that could send a negative message. It would seem like they have something to hide.”
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