Back when he was a "suit," Grody learned a lot about Colt by representing its creditors in a bankruptcy which culminated in 1994. For the next decade, he was a business law generalist at Connecticut's largest law firm.
"I did asset-based lending early on, bankruptcy work, corporate work," Grody said. "I did emerging companies work. But it turned out there's no market for that skillset — for the well-rounded lawyer among sophisticated clients these days."
It's usually a deep compliment when a former legal opponent wants to hire you. In mid-summer of 2005, Grody was offered the general counsel job of Colt Defense. The move required him to become even more of a legal generalist — and keep a good eye for retaining the right legal specialists.
"I'm a sophisticated client now," he said, "and when I buy legal services, if I have to go outside the company, I want somebody who's really good at the narrow area where I have the problem."
Grody had much to learn about the foreign corrupt practices act, employment law, anti-trust work, Occupational Safety and Health Administration law and export compliance. "Almost everything we do here is subject to the international traffic in arms regulations act, or the ITAR, " he said. "The ITAR governs exports of military equipment and technology.
That technology includes the blueprints and the know-how in people's heads. Colt Defense, which in 2011 did $208 million in sales, ships to about 50 different countries every year.
"Every shipment is subject to export regulation from the [U.S.] State Department, since military exports are handled by the State Department, not the Commerce Department," said Grody. "I knew nothing about this when I came here."
Much of what he does is craft agreements to keep Colt's trade secrets and processes proprietary. "A lot of it is the properties of the raw materials," Grody said. "We have a metallurgical lab onsite." If the company used an outside lab, "you don't have control of the technicians," Grody noted.
At times, the intellectual property is more like a secret recipe: "Everything's made of metal, and when it's heat treated, and it's cooked too much or not enough, you're going to have problems."
'Sporting Rifle'
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