In-house and in the know

Can you give us same background on your career?

I qualified from university way back in 1999. After four years of economics lectures and exams I learned one valuable insight about myself, and that was I had a limited future as an economist. I did however retain an interest more broadly in financial services, and after taking the obligatory year out I initially dipped my toe into a few contract roles with insurance firms. These didn’t quite grab my interest, so I switched sector to investments and began my formal working career 17 years ago as a fund manager’s assistant in the Private Client division of Newton Investment Management.

Two years and some industry qualifications later, I progressed on to Scottish Widows Investment Partnership (SWIP) to work as a strategy researcher in their Corporate Development team, conducting market and competitor research. A few years later an opportunity arose to run the CEO’s office, which I leapt at. This role had a large influence on my career as it provided an unique insight into the management and business side of running an investment firm during one of the largest global financial events seen in history, in 2007-08.

This was followed by five years in the Investment Solutions team, developing new propositions clients. Post the acquisition of SWIP by Aberdeen Asset Management (and subsequent merger with Standard Life Investments), I moved into product development where my focus is on client solutions, multi-asset and quantitative fund development for the UK and European markets.

So a varied set of roles, but consistently in the investment industry and with a strong product theme throughout. 

What is your experience of working with in-house legal teams?

Given the audience for this article, the only prudent answer is fantastic, always positive and never had a bad experience! More seriously, I have mainly used in-house legal teams to advise on product change projects. This has usually been for launching new investment funds, amending existing products such as through fund mergers, or winding down funds that require to be closed. However, the type of expertise required within each of these can vary significantly depending on the project. For example, an average new development will often involve prospectus amendment, new derivative contracts with brokers, client distribution agreements and liaison with the relevant regulator. This means I can often be depending on two or three different internal lawyers at different times during developments, all with different specialisms.

I have been extremely fortunate in my past experiences with in-house lawyer teams. Most of my interactions have been positive experiences where I have felt supported and guided by the internal lawyers on the project. By and large I have been very lucky to have worked with some really great teams and people, some of them for nearly 15 years, and that kind of longer term relationship is beneficial as I know I can lift the phone on small one-off queries or call on the assurance of sound legal input into larger projects. There is a strong element of trust in the relationship, borne out of shared past experiences. 

What benefits do you find from having an in-house team?

While I will answer this question in relation to the business environment in which I have worked, I suspect that many aspects will be highly transferable to other businesses and organisations.

The clear, standout, unchallenged winner is their business and organisational knowledge. In-house legal teams know the business from head to toe and front to back; they understand what the business does, its risk appetite, quirks, foibles and culture. This allows them to provide advice and legal documentation that are in tune with business need and style. There are few parts of a financial services business that are not underpinned by some legal arrangement, whether that be an outsourced service provider relationship or the terms agreed with your largest client.

The in-house lawyers are the team who have overseen the initial drafting of all these documents and subsequent alterations. That innate corporate memory enables them to understand the consequences of changes and the background to previously agreed content. This is what makes the difference between simply “holding the pen” on a legal drafting and really adding value. You can bring in resource and extra bandwidth through external lawyers, but that will always lack the benefit of history and context.

Of course, there have been occasions with particularly large, complex projects that required very specific knowledge such as when entering a new jurisdiction, when our internal teams have been supplemented with external specialist resource. In these circumstances it is the internal team who are most important in the selection process.

On these occasions I have relied heavily on my internal team to shortlist, act as lead assessor and then select an external adviser via a beauty parade. Having worked on projects where external advice has been both very good and very, very bad, the importance of sourcing the right external legal advisers is critical and a good in-house team will have to be well connected and informed enough to pick suitable partners.

How in your experience do in-house lawyers add value?

As I have already touched on, there are significant benefits from having a greater understanding of the business they work in, including processes, people and culture, and this remains one of the core sources of added value.

One other key aspect which I find particularly valuable is accessibility. More often than I would like to mention, the issues that arise in product related work can require quick turnaround, otherwise there are knock-on impacts on other deliverables and project timelines can quickly slide as a result. Therefore being able to access advice on tap and immediately as queries arise, even if it is just to scale an issue, is a huge benefit that helps with managing expectations and other commitments. Not having a quick sense of the importance of an issue and path to resolution leads to uncertainty and loss of momentum. Having always to revert to external advisers costs both in financial and time terms. There is nothing more frustrating than not being able to control when and how an issue gets resolved.

I think the last point I would make is challenge. In-house lawyers are in nearly all my project meetings and I will always try to include them early in the process, not just for their core legal input but also because you benefit from their legal training, the analytical eye and ability to challenge assumptions. Now granted, this can also make my life more difficult, but in the end you know it is helping to identify issues now rather than further down the road.

What should in-house lawyers do more of?

Business or organisational partnering. I much prefer working with an in-house lawyer who is my regular contact and understands my business. There are many obvious advantages of dividing the legal teams into specialisms, but I have always found the best individuals I worked with were flexible enough to think and work beyond their specific, appointed team specialism and draw on their broader experience. I do understand why I might need to co-ordinate three different lawyers on one project, but that does not stop it feeling frustrating. Flexibility and business partnering are harder to implement in practice, but it is more rewarding for those engaging with the team.

What should in-house lawyers try to avoid doing?

In my opinion the real trap for in-house lawyers to avoid is to advise outwith their remit, and in fairness this is not a problem created by lawyers as I have not met many who stray beyond the bound of their legal territory. I do, however, often see others trying to lure lawyers onto unfamiliar ground. The thought of a lawyer’s sign-off can be an appealing prospect to project members – the classic “but legal said” defence. I have sat in countless project meetings where the in-house lawyer has had to deliver the now common response: “That is a business decision, not a legal decision.” The legal equivalent of a solid forward defensive. That said, lawyers should provide business input, but they would be wise to be clear on what is commercial input and what is legal advice.