It’s still a battle for respect for some in-house counsel among their non-lawyer “clients” as they “market” their law departments. Meanwhile, regulatory overload is fast becoming an occupational hazard. It’s all in our first annual roundtable with in-house counsel about what they really want, need, and are doing to make their lives easier.
What is on the minds of corporate counsel these days when it comes
to running their law departments? What are the challenges they face and
the solutions they have to find to meet those challenges? How are they
coping with conflicts? What do they really want when it comes to legal
support and are they getting it?
We sat down with five
high-powered, in-house lawyers from a diverse range of companies —
financial services, energy, transport, technology, and automotive
manufacturing — in Canadian Lawyer INHOUSE’s First Annual Corporate
Counsel Roundtable. Together, their organizations employ over 160,000
people, earn billions of dollars in revenues, and, in most instances,
operate in multiple jurisdictions. They are the faces of corporate
Canada.
Canadian Lawyer INHOUSE co-editor Jim
Middlemiss moderated the 90-minute roundtable that included: Tom Smee
(RBC Financial Group), Laura Formusa (Hydro One), Barry Fisher (SAP
Canada), Antoinette Bozac (Unisource Canada), and Rob Landry (Magna
International).
Biggest Challenge? It’s All About Respect
CLI: What are the biggest challenges you face these days in doing your job?
Landry:
I think one of the pressures that we all face is the perception that
we’re overly complicating things and people just want us to get it
done. Saying, ‘We’re from corporate and we’re here to help you’ is just
not something anyone wants to hear. To win them over you have to be
pragmatic in your approach. Don’t be overly lawyerly every time you are
dealing with an issue. Understand what they are dealing with from a
business context, and apply that business sense and rationale to your
legal advice.
Fisher: I
agree there is an inherent view among non-lawyers that lawyers are
inhibitors to doing business. Any time I hear an officer referring to,
‘Let’s send that to the legal department or to a lawyer,’ I know we’re
offside. They sense an adversarial approach to this.
CLI: So what can you do?
Fisher:
We address that right out of the box by making sure lawyers understand
the business objectives and priorities and get them out in the field.
There’s a sense of collegiality and you’re a member of the team and not
someone from head office. We have proactive training sessions with our
executives and tell them we’re here to educate you. We found they were
receptive because you can talk their language.
We use
a ‘comma case,’ for example, to show how a business was impacted to the
tune of millions of dollars by the placement of that comma so they can
say, ‘OK, I guess the verbiage is in fact important.’ As long as you
are providing advice to them in a timely manner, and you set an
expectation, then begrudging respect that can be developed.
Smee: You
want to make sure you’re not seen as a roadblock, that you’re actually
presenting solutions and thinking about that first before you even talk
to a business partner. What is the best way to do this? It helps if
they have the sense to bring you in earlier, because you can steer the
direction. You can’t go 85 miles down the road and then suddenly turn
back 50 miles.
Bozac:
You need to develop very close relationships with your executives. I
have weekly or monthly conversations with each of them about their
departments. That’s very helpful.
Landry: A
second way to get around it is just to deliver. Actions speak louder
than words. After a couple of successes under your belt, people are
more apt to view you as a business partner than as an obstacle in
getting something done.
CLI: How else can you earn business respect?
Fisher:
Constantly look for ways in which you can structure what your legal
department does in ways executives can understand. A lot of it is how
you market your department so they see you not as just being a cost
centre, but are aware of what value you add and what the legal
department does. One of the things we’ve done is taken on some areas of
the business. For example, customer audits [of software licenses]. By
taking responsibility for that away from the finance department it
becomes a revenue-generating activity. We’re in fact now a profit
centre.
Bozac: We’re
talking about profit centres. I am responsible for many trademarks and
copyrights. I have actually have turned around and sold some. Therefore
I keep the revenue for our profit and loss statement. That has helped
as well.
Coping with Compliance and Regulation Overload
CLI: How are you coping with the increasing levels of regulatory and other compliance activity?
Formusa: I
think in our case one of the greatest pressures we’ve been feeling is
the change in the regulatory environment, both from an industry
perspective and general changes around securities law. You need to make
sure you are staying one step ahead, not just keeping up but
anticipating. One of the best ways to do that is through participation
in industry and government initiatives. We don’t want to wait until we
get an email from a law firm. We try to make sure we are at the table.
Of course it’s always a question of how much the government or the
ministry is going to let you be involved. Most of us generally feel we
have had opportunities to shape regulations and legislation and if you
can be involved in that, I think you can stay ahead and participate. Smee: We
operate in a highly regulated industry and we have enough lawyers that
it’s like we have little law firms, which have relationships with the
businesses. They are like dual citizens. They have accountability to
the business and have to make them understand [regulatory changes].
The regulatory part of this is really huge. Every business we’re in is highly regulated and there is always a new
policy
and there are complications for many different businesses. We operate
in multiple jurisdictions so if the U.S. comes up with a policy,
chances are Canada will do the same thing. You get them all married up
and everybody trained and then the [European Union] steps in and they
want slightly different legislation. It makes it very complicated.
Landry: One
of the other challenges we face as well is being a Canadian company
with global operations is internal controls and things like document
management and SOX 404 requirements. As an organization, we have to
make sure we have tight controls in place both financially and in the
creation and management of our documents. As you deal with things
globally, the focus on some of these issues is different the further
away from the U.S. you are. The focus or importance that is placed on
some of the SOX 404 compliance-related issues for Europe or Asia is far
different than it is for Canada or the U.S. It’s not that they don’t do
it, it’s just not at the forefront of their attention, like it is for
someone here who sees something in the paper almost every day. It’s
some additional complexity when you’re dealing with global operations.
Fisher: One
of the benefits of the SOX process is that it has brought a certain
rigour to the organization and allowed me to bring forward issues that
I think are important. I can now say this is a SOX requirement.
There’s
[also] pressure to take on differing responsibilities. That carries
compliance risk. If it’s an area nobody else wants, they say, ‘Let’s
give it to the lawyer.’ There is more and more of that and it’s coming
to the point at which you are reluctant to say you want to take that on.
Bozac: In
terms of regulatory compliance, my president said to me, ‘I don’t want
to be blindsided by any new stuff that happens. I update myself on a
periodic basis on what is going on and report back to him or report to
the executive team. Or, I might send an email around giving a heads up.
We had a major investigation a few years ago, so I forced the executive
group to take a look at updating our competition and compliance
policies. I am now taking a look at our conduct policy. What I have
done is actually named champions from our executive team to lead some
of these initiatives so that way it was not just me. It’s been
fantastic and let me off the hook for some of the nitty-gritty work and
the detail work, so I can be in the background pushing the agenda along.
CLI: What about staying on top of information?
Smee: It’s
kind of a multifaceted approach. We have colleagues in compliance who
are very well-trained and there are law firms. Plus, there are some
commercial vendors who are starting to get into compliance management.
Outside Counsel: Getting What You Want and Need
CLI: What are you looking for in external law firms?
Landry: We
want someone who understands pragmatically what our business needs are.
I don’t want a 50-page legal treatise when you can give it to me in a
page. I assume you’ve done the research, give me a synopsis that shows
you truly understand the dynamics of my business and not just the law.
Formusa: I
have had some instances where [the lawyers] have not put themselves in
the shoes of company counsel and they just delivered the opinion and
said, ‘Here it is.’ They haven’t thought it through with what I am
dealing with. Good outside counsel will anticipate what I have to do
and they will put themselves in my shoes. It is a very different role
than being a partner in a law firm. Firms that can address that are
going to do really well. It’s worth the money if they go that extra
step.
Fisher: By
and large, a tax opinion from one law firm is going to mirror a tax
opinion from another firm. Where the real value comes is being
proactive and giving you something to seize, like a case and saying ‘I
just saw this, I think I know enough about your business to see the
impact.’ They customize a very large piece of legislation or case down
to something that impacts me.
CLI: What about conflicts and law firms? Is that a problem for in-house counsel?
Smee:
We sometimes wonder how a law firm can properly represent the other
side when their firm has a large relationship with us. It’s more of a
problem for law firms than us.
Bozac: I ran into a terrible situation after retaining a firm for two months. A conflict surfaced and I was stuck
trying
to find a new firm. I contacted my confreres and said we might be
involved in a joint defence. [She was able to line up a law firm for
that company and it agreed to drop its retainer so she could hire its
lawyer.] Your confreres can help in fixing the conflict.
Formusa:
I can see problems in the future, as the world becomes more crowded
[and law firms consolidate]. I do think there is a bit of cavalier
attitude among the firms, but I have not had to deal with it and I will
not be happy if that attitude is expressed to me.
CLI: Any thought on “Chinese Walls” and moves by firms to have clients sign retainers waiving future conflicts?
Bozac:
I will agree to walls being set up around a certain partner if and when
a case arises, but why deal with it until it arises? I am not trying to
be an ostrich in the sand; I am just thinking I would rather hear about
it first and then deal with it.
|
