View 2016: Agents of ChangeChris Hoeschen may well have the coolest job in-house these days. From the offices of UrtheCast Corp. on Vancouver’s picturesque waterfront, he is leading the small legal team assembled for the Earth-observation imagery and services startup as the company prepares to expand internationally in a sector that was once just the domain of military and government players.
Hoeschen is one of the four in-house lawyers we are profiling in our fourth year of the InHouse View — an annual look at what leading corporate counsel are preparing to deal with for the year ahead. As Hoeschen told me in our interview, regulatory issues loom large for him at UrtheCast “… because, sometimes, taking pictures of things from space can be a sensitive subject.”
The role technology plays in what UrtheCast does is a major factor for Hoeschen as it is for Philip Moore, senior vice president and deputy general counsel of TD Bank, and Genevieve Richard, senior corporate counsel of Belron Canada. For Moore and Richard, the evolution of technology is affecting the traditional lines of business for their organizations and putting their legal teams ringside as the business units bring mobile and software as a service products to market — services their customers are demanding.
For Marni Dicker, executive vice president, general counsel and corporate secretary of Infrastructure Ontario, the evolving landscape of southern Ontario is in her sights from her offices at 777 Bay Street.
Dicker’s team of more than 30 lawyers will oversee expansion of some of the country’s most travelled highways and much-needed transit infrastructure.
Last year, Dicker was asked to add communications for IO to her portfolio — a further step taken to make sure the brand of the organization is protected — a brand respected around the world for the work it does for public sector projects.
Brand protection is one thing all four in-house lawyers have in common. That protection from risk comes in many shapes and sizes these days —including cyber risk and the implications of global regulatory regimes.
They also share the challenges of deciding what work they want to keep in-house while at the same time making sure they have the right expertise to advise their business clients on the cutting-edge work their organizations are doing.
Executive vice president, general counsel, and
Years as GC: 3 Department: 34 lawyers
What are your major projects for the legal team at Infrastructure Ontario in 2016?
Our projects are all transit related, and the legal department is involved from beginning to end on each and every project. That is really where Ontario is going right now. Essentially, Infrastructure Ontario wants to do for transportation what we did for social projects, such as hospitals and long-term care centres, over the last 10 years.
We want to do the same push with light-rapid transit and highways.
The large highway projects include Highway 407 phase one, and two is under construction right now.
Highway 427 is in the planning stages, while Finch light-rail transit is in the works and construction is also underway for LRT in Ottawa and Waterloo. Construction is also about to begin on the Eglinton Crosstown LRT.
In the real estate management group, my legal team is very busy with the acquisitions and dispositions of properties for the government of Ontario. The real estate portfolio is second only in size to the federal government. For 2016, one of the big projects will be the sale of surplus lands such as the LCBO headquarters at the waterfront in Toronto and the division and sale of the Seaton lands. The funds that will be acquired from the sale of these properties will be used to fund transit-related projects.
How do you work with external counsel on these projects?
I am so fortunate to have a tremendous in-house legal team. We have experience and expertise in-house that is really second to none, but because of the complexity of each of our projects, we tend to use an external law firm on each of them.
We have a vendor of record and it has a list of qualified, national firms that are capable, with the necessary expertise to do these complex transactions. Once we have a firm on board, they work with us at the project development stage right through to completion of construction on a project.
It’s really important for us to have the right external firm working with us on these complex projects because we have to ensure we have the right support to make sure we have fair and competitive procurements, that our documents carry the strength needed to make sure our billion-dollar projects are carried through to completion without any problems in the documentation.
Every alternative finance project has an external law firm on it. Every three years we put out an RFP to get vendors of record — law firms to become vendors of record — and that is equivalent to issuing an RFQ. We don’t go to the whole legal world every time we have a project. We use national firms on projects that range from $100 million to $10 billion — those projects require project finance, risk transfer expertise, etc. These are probably the most complex transactions the law firms do.
How important is protecting the Infrastructure Ontario brand?
Protecting the brand is paramount to us; it is our key to success. Our reputation is that we are fair, open, and transparent. We are recognized as world leaders in infrastructure development, alternative financing and procurement transactions, and real estate management. We want to maintain that stellar reputation of fairness and transparency because if we don’t have that we have nothing. If people don’t believe that we abide by our documents, then they won’t bid on our projects and get the best value for money for the province. If there is not trust in the marketplace about us, then we really have nothing. We have seen that happen in other jurisdictions where the procurement agencies were not believable and [it] affected the bidding community. We are an agency of the government of Ontario, and to protect the integrity of our brand we really have to find the right balance between providing transparency and the need to protect our intellectual property. Our brand is so well known that we have had more than 40 countries visit us over the last 18 months to learn about the way Infrastructure Ontario delivers projects and that is because of our reputation.
Is social media and communications part of your responsibility?
Social media and communications are very much a part of my role as executive vice president. The communications team is one of the groups under my legal services division. I took on this role in April and part of this is to fulfil our commitment to transparency. Social media now forms a big part of the way we are communicating to the public. We use social media to engage the community and people we work with so the communications team works hand in hand with my legal team to ensure the message we send out to the community is socially responsible, accurate, and fair. It’s one of the reasons our CEO, Bert Clark, put these teams together under my leadership, because there are such synergies between our group in order to deliver the best level of service to the organization and the public sector. He felt that with me overseeing procurement and legal and communications, it all links back together. It’s one thing to be an excellent communicator, but a single sentence could get an organization into a lot of trouble.
What are some of your priorities when it comes to compliance issues?
I am responsible for overseeing ethical issues and any wrongdoings with our employees or our bidders. I have a mandate to report to the board with respect to any whistleblower complaints and I am mandated to investigate every single one. The auditor general audited our loans and AFP programs last year and they were chapters in her latest report. My legal, procurement, and communications team were deeply involved in that audit and we are preparing to respond to the recommendations in the auditor general’s report.
What’s your philosophy to managing the in-house team?
My internal team has a tremendous level of experience. I am really fortunate to have an opportunity to work with each one of them and each has a skill set that is Bay Street calibre. That is how I retain people – we don’t have the luxury here of huge promotions and huge salaries. I am able to retain lawyers in my legal department because the experience they gain here at Infrastructure Ontario is experience they wouldn’t get anywhere else. They have opportunities to build hospitals, highways, and detention centres, and work on the management of the second largest real estate portfolio in Canada [second to the federal government].
I have high expectations for the people I work with, but I wholeheartedly believe in balancing work and life. I was humbled and honoured to be the recipient of the Women’s Executive Network Public Sector Leader Award this year. I see myself as being one member of a team and it’s exciting others see I am an exceptional leader. I feel strongly about supporting women to have it all — it’s a matter of picking your priorities.
Executive vice president,
Years as GC: 1.5 years
Department: 3 lawyers
What are your top challenges for 2016?
UrtheCast Corp. is a Vancouver-based Earth observation company that has been around for about five years — it went public in June 2013. We are developing the world’s first Ultra HD colour video feed of Earth, streamed from the International Space Station. We also have a lower-resolution camera that takes five-metre-resolution still pictures from space.
We’re a small company, but we have a lot of remote offices — one in Washington D.C., one in St. Louis, and in Vancouver, as well as two in Spain. We are very decentralized and, as a consequence, deal with a lot of international issues that come up.
UrtheCast also owns and operates the Deimos-1 and Deimos-2 satellites through its Spanish subsidiary, operating as Deimos Imaging. Video and still-image data captured by the cameras will be downlinked to ground stations across the planet and displayed on the UrtheCast web platform or distributed directly to partners and customers. UrtheCast’s cameras will provide Ultra HD video and still imagery of Earth that will allow for monitoring of the environment, humanitarian relief, social events, agricultural land, and more. We’re hoping to make it more available to everyone and find out all the useful applications for it — it could be for a number of business applications.
The company is moving into an operations mode in 2016 and that comes as a result of our high-resolution video camera now being up and running. Before, we were in startup mode and now we’re trying to get into an operational cadence. That will be a real focus for the company this year — to really drive sales and move forward with the recent acquisition in Spain.
As the legal team, we’re involved a lot in helping to drive revenue and help manage the sales pipeline and encourage faster onboarding of customers, which includes everything from sales agreements to due diligence.
There is also a growth component that relates to the fact we have announced we are going to build our next-generation constellation — a 16-satellite constellation that will have synthetic aperture radar satellites — SAR — and optical imaging [satellites] flying together in tandem and communicating with each other. It’s a system that really doesn’t exist anywhere in the world yet. We’re trying to get that funded through various customer initiatives and finding new partnerships. That is going to make up a lot of work for the legal team over the next while.
Do regulatory issues apply to you?
Yes, because sometimes taking pictures of things from space can be a sensitive subject. From a regulatory perspective, our department is responsible for everything involving regulatory matters such as licensing of the various sensors we have in the sky that fly on the satellites around the ISS. I think we’re going to be busier in the licensing area because a lot of the licensing bodies are accustomed to the old model. With all the new entrants to the space market wanting to launch, it means the regulatory authorities aren’t ready.
We also have a lot of work around export controls. Often in the space industry you need to go to government to get clearance in order to export because a lot of these technologies are dual-use technologies — they can be used for military or civilian applications, so there is a lot of back and forth with various governments around the world around that type of issue. Because the industry is evolving so quickly, I think we’re going to have to see regulatory bodies adapt to the changes and update the legislation accordingly.
The regulatory framework is such that, in the past, most satellite systems were funded by government, so you had a simple regulatory system to make sure that companies had disposal plans and they were keeping the government informed of what they were taking pictures of. Now, because costs are dropping to manufacture, you’re having more people jumping into the small-sat market. I don’t think governments are ready or equipped to deal with this — it’s a really different model. Certain governments are now inundated with applications for licences and they are not sure where things are going and not funded to the extent they need to be to keep up with all the changes.
What areas of risk do you manage?
Our operational risks are in the forefront of our executive team’s minds these days, as are strategic risks and enterprise risk.
We’re a small company and our legal department is well integrated into the business itself, so I think any risk of the business is automatically a risk of the legal department to oversee. As an example, we recently acquired a company called Deimos Imaging, and there are obviously risks associated with any transaction, and there are aspects of the due diligence whether it is financing or myriad of other things.
Some other risks involve onboarding customers and distributors and everything that goes along with that activity.
How do you decide what work goes to external counsel?
That is more of an art than a science, but what we try to do is look at the work, and if it’s repetitive work and can take a long time, sometimes we will outsource that to external counsel. Sometimes, if it’s strategic and high value, we will also use external counsel. That may sound counter-intuitive, but we find if there is a lot of heavy lifting to do, it’s helpful if you have someone on the outside and can take more of a strategic role in guiding it from the perspective of the business. There is also the issue of when something is very specialized — I’m not going to touch anything tax related — something like that automatically goes to an external firm.
We have a real mix of external counsel, and where the work goes really depends on the subject matter.
For some of the work we do, it would be hard to find people in Canada who have experience doing it and, as a consequence, we are learning as we go. We do a lot of sourcing based on expertise and relationships we have developed over the years. It really depends on the subject matter and the relationships with the individual lawyers. We have established fixed-fee arrangements and budgets where we can.
SVP, deputy general counsel
& corporate secretary,
TD Bank Group Legal Dept.
Years as GC: 2
Department: 84 lawyers
What is your top focus for 2016?
We set objectives each year and an overarching objective is to engage with our business partners early and often so we understand their strategies and are better able to anticipate the legal issues as they are implementing their strategies.
We spend time with our anti-money laundering, compliance and fraud partners before our year begins to identify where we collectively see the strategies of the various business units going and what we think are the regulatory, legal and compliance issues that will arise during the year.
Our top focus for 2016 is to get as close to our businesses as possible to understand any legal risk and mitigate that risk. We’re trying to be more anticipatory and less reactive. We have found that our businesses are very receptive to that approach.
Another priority for us is what we call putting “fitter and faster” into action to respond to developments in the market faster while still protecting the bank against unacceptable legal risk.
The fitness aspect of being “fitter and faster” also relates to how we do what we do — how we liaise with our external counsel and use the resources of our internal group so we can bring together all of those resources in a way that will allow us to be as effective and efficient as possible.
The bank as a whole is trying to act in a “fitter and faster” manner. For legal, it’s about how we use technology/knowledge sharing and how we engage with our external firms — and that’s not just a cost element. We are trying to enhance our capabilities to meet our customer promise of comfort and convenience in a digital age. We see ourselves as enablers of the business as well as controllers, so we try to enable solutions that comply with all relevant requirements while controlling against unacceptable legal risk.
Is cybersecurity a priority for legal?
Cybersecurity is such a big issue for any business and certainly in the financial services industry it’s a major area of concern. How do you reconcile customer needs for quick transactions digitally in a trustworthy way? We have members of the legal team who work with our technology and business partners to try to identify where the risks are, and how we handle them to provide our customers assurances their transactions and information are safe and secure. As the banks respond to new technologies and new participants in financial services, and try to engage with customers digitally, we have to deal with the legal issues that come up. There are privacy issues and cybersecurity comes into that. As well, procurement and how we engage with other providers is an issue. It is a very interesting challenge in terms of how we reconcile regulatory requirements — many of which were built for a pre-digital age.
Do you have any advice on issuing RFPs to external law firms?
The bank has done RFPs for about 15 years. Two years ago, we did a large RFP for external firms and achieved savings through consolidation of work in Canada and the U.S., and strategic firms were identified with whom we partner in a deeper way. There are now six firms in Canada and eight in the U.S. that we have consolidated work with who we regard as our strategic partners; we also continue to work with a larger number of firms on various needs for external counsel.
RFPs really create the rules of engagement for a three-year period and include rates. We also put particular projects in the litigation area forward to RFP and invite some firms we think are qualified to make proposals on those specific matters.
In-house lawyers have to be as clear and specific about what it is they are looking for when it comes to RFPs. If it’s a big panel-related RFP that’s one thing, but if it’s a specific matter I really think you have to scope as carefully as you can and then have a discussion with the firms so they can build in their assumptions, matter or case plan and budget. The single biggest determinant for success is clarity on objectives. For a legal department of any size contemplating an RFP, they have to be clear in their own minds what they are hoping to accomplish. Clarity comes with being as specific as possible on what you’re asking firms to respond to. That way you stand a better chance of getting all the benefits of good planning and project management, to the benefit of the legal department, the business and the law firm.
How do you manage in-house?
Our leaders of today and tomorrow will be people who have skills in a number of areas. Balancing the need for deep subject matter expertise while developing broader leadership skill sets is an area of focus for us as we develop our terrific talent. We have created a regulatory law sub-group and that’s bringing people together that do regulatory work, competition law and anti-money laundering, privacy — that’s a refinement of resources we already have.
Senior corporate counsel,
Years as GC: 7
Department: 2 lawyers
and one paralegal
What are your main projects for 2016?
Belron is a leader in automotive glass repair, replacement, and distribution. We operate around the world and the head office is based in the United Kingdom. The office in Canada is based in Montreal where we have two lawyers and a paralegal, and there are more than 30 lawyers servicing the company globally.
An area of priority for us in 2016 involves technologies brought forward by vehicle manufacturers that are having a big impact on our business.
We’re seeing massive changes in the automotive industry with the arrival of new technology features for cars including Advanced Driver Assistance Systems and self-driving vehicles. All of these features added on to the car will have a huge impact on how we will be fitting windshields into vehicles. We need to understand how all this technology works so that what we do in relation to doing work on vehicles with those advancements in automotive technology is up to best practices and standards.
From the legal team’s perspective, we need to understand the science behind the products and technologies and where the liabilities and risks are to help the business manage that area.
We’re also currently investing in new technology to allow us to reach consumers and business partners in a more agile fashion. We’re getting into software as a service and platform as a service — to allow business partners and consumers to reach us easily and that entails a lot of legal ramifications.
Is cybersecurity on your list of concerns for 2016?
Cybersecurity is top of mind. Because we require lawyers to be very business oriented, we expect the legal department to be at the forefront of these issues. Sometimes, we will facilitate consumer contact with their insurance company when they are replacing their windshields, so we need to be aware of where the data is being hosted and managed. Any company in the retail sector needs to be savvy about what is personal data and what is data you want to protect and how you want to manage your IT systems.
We’re very confident that the new platforms we’ve put in place are well protected.
How do you manage external counsel?
We’re an organization that builds on long-term relationships with our external counsel. We like to work with people who know our business and are willing to invest in the relationship with us. We have a primary law firm, and having those lawyers who know your business really saves you time in terms of external management. We do have several relationships with several law firms across the country and favour those who have the expertise we are looking for. They are very proactive and communicative relationships. Being a smaller department we often need advice quite rapidly.
On the other hand, we are also an organization that, depending on the situation, we will go to the best firm for their expertise. If we are looking at pension issues, we will have pension counsel from Toronto or cyber law experts in Montreal, or, for insurance matters, we may go somewhere else. We also have local experts to help us understand the legal ramifications in the provinces for various issues. We do strive for long-term relationships with our external firms.
What’s your approach to managing your legal team in-house?
We went from having a mid-size department of about six lawyers a few years ago to a smaller department because special projects had been completed. Depending on growth, it may evolve. Our legal department is composed of senior lawyers for the most part because we are quite lean and we need people with a certain level of experience.
Three years ago, there were six lawyers in-house in Canada because the company was going through a massive growth phase, doing a lot of acquisitions — we acquired 70 companies in 31 months, which added to the Canadian portfolio.
In terms of management of the department, we are a very people-oriented culture. Managers are rated on a yearly basis on the climate we create for our team. We are also measured on whether we are visionary and whether we are good at coaching.
We really build on leadership development and making sure they are able to adapt to the different internal clients we have.
There is a lot of time invested not just on technical skills but leadership skills. I think this goes with the philosophy that we’re a business and whether you’re a lawyer, engineer, finance person, or accountant working in the company, you are primarily a contributor to the business.