In this episode of the Heidrick & Struggles Leadership Podcast, Heidrick & Struggles’ David Burd speaks to Earl Barnes II, the corporate vice president and general counsel for Sentara Healthcare, a large, integrated non-for-profit healthcare delivery system. Barnes discusses what’s driving current trends in the healthcare industry and how those trends are affecting the industry’s talent needs, how not-for-profit leaders can find a balance between serving their communities and remaining sustainable, and how the role of general counsel is evolving at healthcare organizations. Finally, he offers some advice for lawyers coming up in the healthcare space regarding talents or competencies they should focus on. 

Some key questions answered in this podcast include:

• (1:45) As a general counsel at a significant healthcare system, what are the issues that keep you up at night that are top of mind? And how would you say that the talent needs and the capability of people play into those issues?
• (3:19) We are seeing a couple of trends in the healthcare space, both consolidation and M&A generally but also more systems having large provider and large payer components. What do you think is driving all that? And how does that play into how you think about the talent challenges you just mentioned? 
• (7:47) What is your sense of how things are shifting in terms of the conversations you're brought into as the GC? 
• (9:35) I think you've been mostly at non-profit systems, faith-based systems, where mission is paramount, but where it’s also important to be sustainable. How have you've grappled with that dynamic?
• (11:48) If you were advising folks coming up in this space—healthcare lawyers—are there any suggestions you have, any tips, any things you wish you’d known back then? Any talents or competencies that you would have them focus on? 

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

David Burd: Welcome to the Heidrick & Struggles Leadership Podcast, and the first of a series of conversations we'll be conducting this year focused on the intersection of healthcare and legal leadership. We'll be interviewing general counsel and chief legal officers at top healthcare services and life sciences companies, exploring trends in the space and hearing their thoughts on the talent and leadership needed to be successful.

I'm David Burd, a partner in Heidrick & Struggles’ DC office and a member of the Legal, Risk, Compliance, & Government Affairs Practice. I work cross-sector, but spend a good deal of my time in healthcare. 

In today's podcast, I'm thrilled to be joined by Earl Barnes II, corporate vice president and general counsel for Sentara Healthcare. Sentara is a large, integrated non-for-profit healthcare delivery system and was named to IBM Watson Health's top 15 health systems in 2021. Earl's had a distinguished career including serving at senior levels at multiple organizations in-house for over two decades following his time in private practice. Before joining Sentara, he served as executive vice president and chief legal officer for Chicago-based Amita Health. In addition, he has held general counsel and other senior legal roles at a number of other complex healthcare services organizations across the country, including Advocate Healthcare, OhioHealth, and Northwestern Medicine. Earl, thanks so much for joining us today. 

Earl Barnes: My pleasure, David. It’s wonderful being here with you. 

David Burd: I'd love to start off by talking a bit about the healthcare industry and how you see it as a legal leader. As a general counsel at a significant healthcare system, what are the issues that keep you up at night that are top of mind? And how would you say that the talent needs and the capability of people play into those issues? 

Earl Barnes: Well, in terms of answering that question, I sleep well at night, which is a good thing. When I finally drop off, I definitely get a good night's sleep. But, you know, there are some things that do trouble me just generally, and certainly some challenges that we're facing here at Sentara. Talent happens to be one of them. Finding the right talent for the legal department has been a big, big issue for me since joining the organization last June. And we spend a lot of time, quite frankly, looking for the right fit for the organization, and in finding individuals that are willing to relocate. So, we're kind of being hit from a number of different sides. I think that the technology piece, you know, not so much [an issue], although I moved into a department that quite frankly needed quite a bit of work just in terms of upgrading how we go about conducting business day in and day out.

The organization has grown tremendously, really, over the last five years, and so I think the legal department's a bit behind in terms of the technology that we're using. But we are working mightily to catch up, and I certainly hope that, if we were to have this conversation a year from now, we would be in pretty good shape at that point. But really the talent piece, identifying good talent—folks that have what I call the general healthcare training but then also have an area of strong expertise—we have struggled a bit to find these individuals. 

David Burd: You know, one of the issues you mentioned tangentially just now is [about] growth and expansion. I’d like to build on that for a minute. We see a couple of trends there; I think both consolidation and M&A generally in this space, but also just more systems having large provider and large payer components. That’s something I know is the case at Sentara. What do you think is driving all that? And how does that play into how you think about the talent challenges you just mentioned? 

Earl Barnes: I think a lot of healthcare systems are very focused on diversification. I mean, I think that many have realized that the ups and downs of the industry—unless you’ve found a way to have some diversity in your overall business—are almost unbearable in terms of how they impact your ability year-in and year-out to provide services to your communities. And so, I think that’s some of what you're seeing in terms of the amount of consolidation that's going on in the market. In many cases it’s now across state lines, and it’s an attempt to have a bit of a diversified payer base. And then, thinking about the systems that have also set up their own health plans—quite frankly, having your own health plan, once you reach a certain scale, you truly do have some true opportunities to use that as a basis for moving into new markets, and moving in at a relatively capital-light scenario. So I think you're seeing some of that occur, as well. We have all these new market entrants and so you know, you're dealing with the Walgreens of the world, the CVSs of the world, the Optums of the world. They're creating a competition that didn't exist before. And so, I think as health systems are thinking about what they need to look like over the next several years, and certainly over the next decade, they're having to take into account these new competitors that have come into the market in very, very big ways. So they're not just inching their way into the market. They’ve come in very strong and have provided some real live competition for many of us working in the more traditional healthcare systems.

David Burd: In that context, thinking about the comment you made about talent prior around sort of the folks with general healthcare expertise, how does that play in terms of how you serve that diversified portfolio, not just the traditional delivery, but also the payer space? And how do you think about finding people who can be agile and thoughtful and strategic about addressing some of those new competitive threats that just weren’t there 10 or 20 years ago? 

Earl Barnes: Well, in some cases you try to hire individuals that are working at your competitors, because I think they'll have a good sense of that component and of that operation. But, you know, we're all competing for talent. I think, in the end that really is the issue: you've got new entrants into the market, and they're certainly out looking for talent. You have your law firms that have been in the market, obviously, for years and years and years, and you're competing with them for talent, too. And you have other healthcare systems that are out there and you're competing for that talent. And everyone kind of approaches this business, and has approached this business, differently over the years. 

We've certainly seen a little bit of change and shift in terms of the role that lawyers play within their organizations. And so, you might, at one point, as an organization, have been looking for a lawyer that was much more of a technician that could really just come in, maybe manage a couple of people and do a few contracts. Some organizations were very happy with that. Personally, that's way too limiting for our type of training. But now, certainly I think it’s a lot less likely that there are organizations looking for people that are that narrow in terms of their scope and focus. And so, we are looking for people that have those abilities, [but they’re also] agile, they’re flexible, they're able to bring concepts from other industries into healthcare because they're being deployed every day these days by our competitors. And so, you want that flexibility of thought and you want individuals that are not so set in their ways in terms of how they go about practice that there's not an opportunity for some training. So that's what we look for. 

And, you know, one of the things I always tell people is that you're never going to find the perfect lawyer. I mean, just like in any other industry, we all have our weaknesses. But I have found that those that are not wedded to the past are very open and focused on where we’re headed as an organization and how we can get there. They're collaborative and they truly view themselves as part of the team, and they want to see the organization thrive and succeed. Those are the folks that end up working out incredibly well. 

And then quite frankly, your challenge is, how do I keep them?

David Burd: I want to pick up a thread there. You almost read my mind in terms of the evolution of the role, and you spoke for a minute about the evolution of the role of lawyers generally. But—and I’ve done this for some time now—there aren't many people who've been the general counsel of multiple, pretty sophisticated healthcare services organizations. So I would love to get your sense of how you’ve seen things shift in terms of the conversations you're brought into, as the GC, as the person in a top spot? Can you tell me about the discussions that you're a part of, the things that you're looked to for guidance on, relating to that broader view? 

Earl Barnes: Yeah, for that, I would tell you that really, more than anything else, it depends on the organization, because I've been at organizations—truly—where you're certainly brought in on some things, but you're not the lawyer in the room for all of the big discussions. And you know, for me, that's never worked out very well. So that usually means I'm moving. But I've always been fortunate to be able to move to other organizations, and at the vast majority of the ones I've worked with, I'm in the room when we're talking about strategy and when we're making major decisions with regard to where the organization is heading.

But certainly, if you read the literature out there, I think you're seeing that lawyers are more and more being brought into that room and being asked to participate in those types of discussions. And I think that that's wonderful, but I think that you need to be prepared as a lawyer for that type of an environment and that type of interaction, because many times you're sitting in that room not only as the lawyer, but as a business person within the organization, as a senior leader within the organization, and so, the other people in the room are not expecting you to just spout on the legalities of something but to truly be able to process and analyze scenarios and help devise appropriate strategies for the organization moving forward.

David Burd: Thank you. Building on that, one of those strategic topics that I've always heard about in the context of nonprofit systems is the tension between the nonprofit mission and making your bottom line focused on being sustainable as an organization. My understanding is that, historically, there has been more of a distinction between nonprofit systems and for-profit systems, but that, as the years have gone on, that distinction has blurred a bit.

I think you've been mostly at non-profit systems—actually, I think mostly faith-based systems, where mission is paramount. We've served a number of clients in that space and I know how central that is. Yet it's also important to be sustainable and make sure the organization can exist and serve patients into the future. I would love to hear just your thoughts about how executives grapple with that, how you've grappled with it in the past number of years. 

Earl Barnes: So, I'd love to tell you that we sit up and spend hours and hours ruminating and grappling with that particular issue. I think everybody in this space, the not-for-profit space and certainly faith-based spaces, recognizes that the only way you're going to be able to fulfill your mission is to find a way to be sustainably profitable. You need to be making enough money that you can truly reinvest in the community, reinvest in your own institution, be able to bring the physicians you would like into the community. You have to be able to buy the equipment, to build the facilities that you need in order to operate your business. And so many of these organizations, really all of the organizations I've worked with over the years, have been intently focused on what we mean to the communities that we operate in. But we all have recognized that we have to find ways to make money. And when we were talking a little earlier about diversification, I think that's all tied in now with what you're seeing many institutions do, because, as time has gone on, certainly in a number of states, the differences that might exist even from a taxing standpoint are limited between a for-profit and a not-for-profit. You know, there are some states that have you paying essentially the equivalent of your real estate taxes for services. And so, it is a business; it's a sophisticated business. It attracts incredible talent. And that talent is certainly focused on making sure that the product that's delivered to the community is the best that it can be, and with that comes a bit of a price tag, because you do need to have a margin. 

David Burd: Taking a step back, you've had just a really varied and successful career in this space. As I said, I've talked to a lot of GCs in healthcare and I've worked in the space for a bit, but there are not many folks that have had the range of experiences and the number of senior-level experiences at different organizations that you've had. If you were advising folks coming up in this space—healthcare lawyers—are there any suggestions you have, any tips, any things you wish you’d known back then? Any talents or competencies that you would have them focus on? 

Earl Barnes: Yeah. You know, one of the great advantages of having worked at a number of different places is just the number of people that I've worked with; the number of CEOs I've worked with, the number of boards I've worked with. And so, over the years, I think you learn to understand people a lot better, what their needs and wants are. And I think, to be an effective GC, I always say, first, that you can't lose yourself. So, you can't constantly morph to whatever you think is the flavor of the day. But the other side of that is that you really do have to be open to understanding the personalities and wants and desires of the other senior leaders in the organization, so you can find ways to deliver on those. 

I've found that what has benefited me greatly has been the amount of time I spend reading about other areas, not just healthcare but focusing on other businesses and other trends that are going on in the marketplace. I find that that helps to enrich the conversations I'm having with my other senior executives, and quite frankly, with my other clients within the organization.

So, a couple of things: You shouldn't lose yourself; you need to be yourself as you’re working your way through a broad base of knowledge. And you don't want to be pigeonholed and you need to be flexible. I replaced a number of GCs that were incredibly effective in their organizations, but I can tell you that what happened was, over a period of time, they became the department of “no.” And it was because they got very accustomed to saying and thinking, “This is how it's going to be. It's always been this way and I'm not going to change.” And so, as time went on and organizations were continuing to evolve, the thought was that maybe the legal departments were not evolving along with the organization. I think we should all take that to heart. It really doesn't matter whether you're in a legal department or anywhere else. If you insist on staying where you're at while everybody else around you is moving forward, that can cause a problem. 

David Burd: Well, thank you so much for taking the time to speak with us today. It's really interesting and it's been a pleasure, as always. 

Earl Barnes: David. Thank you. I've enjoyed it, as always, and I look forward to doing this again at some point.

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About the interviewer

David Burd (dburd@heidrick.com) is a partner in Heidrick & Struggles’ Washington, D.C., office and a member of the Legal, Risk, Compliance, & Government Affairs Practice.