Legal Commentary

CEO John Hesse, president and CEO of Oregon-based Fios, abruptly left the company Wednesday (Feb. 16) after a "personal disagreement" with its board of directors." The board of directors immediately added CEO to the title of its  chair William Lyons.

Fios' Publicist Donna Peterson is framing the departure with a positive spin:  This is an orderly transition, continuing Fios? positive momentum coming out of 2010, which was a banner year for processing volume and repeat customer business."

But no matter what pretty face Fios puts on the latest changes in the executive suite, the company has had a lot of upheaval in the last two years. Last October, counsel Mary Mack defected to ZyLab.

Hesse, who previously served as CFO and COO, replaced Chris Junker in May, 2010, who had joined Fios from Autonomy, in September 2009 and resigned "due to undisclosed personal reasons (but remained on the board).  (Junker had replaced CEO Gerald Massey "as part of a formal succession plan.) Other 2009 departures included consultants Prashant Dubey,  Sam Panarella, and Cynthia Bateman (now director of evidence and discovery management, forensic technology services at KPMG) when the short-lived consulting unit was shuttered ? and sales/marketer Jeanette Sieplan, and PR chief Deborah Caldwell.

Lyons previously served as chair and CEO of AXS-One, Inc. (an electronic archiving and retrieval company that was acquired by Unify in 2009), and according to his bio, "has a an extensive background in management, sales and marketing, operations, research and development, and mergers and acquisitions. He has successfully taken several companies public," which no doubt will fuel the long-brewing speculation that Fios (like so many e-discovery companies) may be looking to be purchased.

One industry veteran, who asked not to be identified, reads the latest executive suite move as "continued efforts to sell the company. Gerald Massey made no bones that was what he was doing but never got a deal done. I always thought Hesse was interim until they found someone else and looks like this is it," he said.  

Observes consultant George Socha, who has been tracking vendors for several years, "An interesting thing about Fios has been that since shortly after they opened their doors in 1999, every six months or so stories have circulated about their impending demise.  And still, here they are, alive and, they tell me, in a stronger financial position than ever."

No press release is yet available.