10 tips for starting as an in-house lawyer in the finance sector

This article is aimed at junior and mid-level lawyers who are moving from private practice to in-house in the finance sector.

Contents

1. Get to know your employer and its culture

It is absolutely critical when starting out in-house to know your employer. This involves getting to know both the legal organisation and who is who within that organisation, and the other teams you will be working with.

Some of this information will have been available to you before your interview from publicly available documents (for example, the published financial statements of your employer). Make it one of your goals in the first three months to fully understand the structure and who is who in the matrix. Filling in the puzzle may take you a few weeks as you get to know not only your own team but the teams you connect with (for example, sales, finance, IT, HR, compliance).

You may be able to find more information yourself by looking online on the internal website, otherwise there may be a good opportunity during the first days to ask colleagues who should be motivated to help you settle in.

Knowing the set-up of your employer will help you filter what legal and regulatory issues are going to be relevant in addition to your current legal knowledge (see Develop your risk management skills). Understanding the matrix will be essential not only when you need to engage on matters that require escalation as part of a good governance process, but also in terms of your development and promotion within the organisation.

In addition to learning about the make-up of your employer, to become a really successful in-house lawyer you will need to develop a deep understanding of its culture. You will already have got a good feel for this during the interview process. It would also be standard for you to receive information (including a code of conduct for employees) as part of the offer package and formal compliance training during the early days in the job. The culture of an institution is critical to the compliant running of a business. Being part of a compliant organisation keeps the shareholders and the employees safe. It will help orientate your decision-making on behalf of your employer (for example, certain decisions will be made on the basis of reputation management or risk appetite rather than on legal merit).

 

2. Establish your personal brand

It is really important at the early stage in your career in-house to start thinking about what defines your personal brand. In private practice, lawyers have been used to being judged by peers with similar backgrounds, largely based on their number of billable hours and legal prowess. In a bank, your colleagues (who are, more often than not, not lawyers) will assume your legal knowledge and judge you on the basis of your other values and skills. Billable hours are not a metric that exists in-house. Instead, the business will be more goal-orientated in terms of getting a deal over the line and achieving a budget and/or profit target.

You were probably made to think and talk about your values as part of the interview process. This will have been important to make sure that your values are consistent with the culture of your employer. Once you have started, it is also time well spent to find out which values are specifically assessed in the internal review process at the end of each year. This helps you think more strategically in terms of your success within an organisation (see Consider your career development).

As well as thinking of your personal brand in terms of your success within a finance organisation, a really valuable in-house lawyer is aware at all times of the professional standards and duties that are required. The Solicitors Regulation Authority (SRA) Handbook 2011 applies to all in-house lawyers who are solicitors practising in England and Wales and before beginning in-house it is well worth taking the time to consider how it implies to your new role in-house (see Practice note, SRA Handbook 2011: how does it apply to in-house lawyers? ( www.practicallaw.com/9-506-5609) ).

Being consistent and confident about your personal brand will not only help you present yourself with self-assurance (which is going to be critical in a competitive atmosphere like a bank), but will also engender the trust of your colleagues. It is only with that trust that individuals are going to feel comfortable coming forward with any concerns they may have. If there is a concern it is essential that employees feel comfortable raising it in case it is a problem. You need to know about potential problems early and deal with them in accordance with internal procedures before employees feel the need to whistleblow directly to regulators (see Practice note, US and UK whistleblowing programmes: implications for US and UK financial institutions and other companies ( www.practicallaw.com/9-525-9018) ).

 

3. Develop your expertise

Private practice lawyers will have developed an area of specialism by virtue of the department they worked in and the transactions they have advised on. You may have been hired for your new in-house role precisely because of your in-depth expertise, or your new role may require you to advise on areas outside of this expertise. Either way you are going to need to work out a plan for continuing to develop your knowledge. An in-house lawyer who stays engaged with legal developments is able to bring new ideas to the business.

If you are working as part of a larger legal team the continuing training of that team should be a priority of your team manager. However, you may well have accepted a role where you report into the business rather than the legal team. If this is the case, you will need to ensure that you are able to give the right priority to your continuing development including, for example, the ability to attend lunchtime training seminars or industry workshops.

Until your move in-house, your legal development was part of your core life in private practice. Once you are in-house you need to take responsibility for your own training requirements including those required by the Solicitors Regulatory Authority (SRA) (see SRA: Continuing competence toolkit). One of the best ways to stay informed is through email alerts from knowledge providers such as Practical Law and from law firms. You will need to consider which automatic updates are of value and which merely add to the volume of emails you already receive during the course of your day job. Take the time to apply the appropriate filters to practice areas that you need (for tips, see Practice note, Practical Law: getting started in-house ( www.practicallaw.com/5-608-6405) ).

 

4. Develop your risk management skills

As an in-house counsel, you will learn to develop a risk-based approach to doing business. You will already be adept at assessing legal risks in a transaction (this will have been part of your role in private practice). You will now learn to think more broadly to help your colleagues identify other potential risks in a transaction (for example, compliance, country or reputational risks).

Once the risks to carrying out a transaction have been identified, you will need to understand the process for managing those risks in your bank. Certain risks will require escalation outside of the deal team for approval (for example, uncapped indemnities within a guarantee), whilst others may be capable of approval by the team manager within delegated limits set out in a credit approval for that deal. Some risks (that are legal in nature) will fall to you or your legal team for approval. Understanding and following the various approval processes is very important when working in a regulated environment and will be subject to monitoring by a bank's supervisor.

As well as managing risks arising as part of the day-to-day business of the bank, your legal team will also have a process for monitoring legal risks that may impact the bank's future business. These may be as a result of anticipated changes to law or even political situations that bring about future legal uncertainty (see Article, Brexit: How can in-house legal counsel in the banking sector best prepare? ( www.practicallaw.com/w-003-8941) ). Even as a junior team member you will be expected to actively contribute to this process, and you may volunteer to take responsibility for a certain country or sector.

More and more in the world of finance an in-house counsel must be aware of international laws that affect their business. A good example is the US Foreign Corruption Practice Act that has extra territorial application for subsidiaries of US financial institutions and must be taken into consideration as well as the UK Bribery Act (see Practice note, Anti-corruption regimes in the UK and the US: a comparison of the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977 ( www.practicallaw.com/0-503-0676) ).

 

5. Understand the compliance issues raised by your business

A junior private practice lawyer will have had limited exposure to compliance within a law firm as this will usually have been handled by the partnership. In-house this is a very different matter and it is critical that you learn which compliance matters are raised by your business as a priority.

One area of compliance that is important to consider as an in-house counsel is competition law. This is relevant as much to finance transactions as it is to M&A, but is often not central in finance lawyers' thinking so it is worth reminding yourself of the basics (see Toolkit, Competition compliance ( www.practicallaw.com/2-515-3708) and, for the lending sector, Practice note, Corporate loan facilities: Competition law and syndicated lending ( www.practicallaw.com/1-107-4985) ). An in-house lawyer should be on guard not only with respect to their own behaviour (perhaps through benchmarking exercises at trade associations), but also be prepared to educate business colleagues against price sharing with peers.

Another good example of a compliance issue is that when you are part of a transaction that involves dissemination of borrower information to potential bidders or lenders, as well as focusing on the legal work for the transaction you need to also bear in mind matters such as data protection (see Toolkit, Data protection ( www.practicallaw.com/6-517-4600) ).

Law firms are leaders in documentation management and it will often come as a surprise to a private practice lawyer moving in-house just how inefficient finance houses are in comparison, particularly given the quantity of documentation banks now produce as a result of email and instant messaging. This is often an area where you can add value, even at the junior level, by helping your business colleagues understand the basic principle that all their correspondence could one day be the subject of outside scrutiny. Consider training needs for your business peers around email discipline and particularly instant messaging. You may also need to be cautious about your own record-keeping now that your work within the business (for example, informal meeting notes that you may scribble down for personal use) may not be privileged (see Develop your communication skills). If you are working on transactions, be mindful as to how the documentation will be stored at the end of the transaction. Your bank should have a documentation retention policy.

There may well be a separate team that deals with certain compliance matters (for example, anti-money laundering (see Toolkit, Anti-money laundering toolkit ( www.practicallaw.com/0-517-9691) ) because the approach taken to decide matters of compliance inevitably needs to be far more black and white than the evaluative approach to legal risks involved in structuring a transaction. No corners can be cut when it comes to compliance. Never turn a blind eye. You are required by your professional calling to actively engage to ensure the ethical running of your business, and in any regulatory enquiry you will be held to a higher standard as a result of your legal training.

 

6. Develop your communication skills

As an in-house finance lawyer, you will be expected to communicate on many different levels, from formal credit meetings to informal same-time messaging or impromptu advice on the sales floor. This may feel very different from the safety of your private practice office where your PA may have occasionally screened your phone calls for you or you may have chosen to come back later to an email. You may well be sitting right in the thick of it on the sales floor. A desire to be at the heart of the business like this can be the very reason why some lawyers make the move from private practice to in-house.

The experienced in-house counsel will become adept at appreciating when a yes/no answer suffices and when further analysis is required. As a junior counsel, your communication skills will develop with time. If you are asked to give advice orally, consider following through with a written summary by email for the record to avoid any misunderstanding.

There may be situations, particularly at the start, where you are still learning the business and will need to come back with the answer to a query rather than giving an answer immediately. You may even need to defer to others within the bank before you answer, for example, where there is a compliance issue at stake. Also, if this is a role where you are learning matters outside your immediate expertise then it is often going to be necessary to find out the answer first, either using your own research or perhaps by checking with others in your team. You should never feel pressured into giving the answer that the business wants to hear without feeling confident of your answer first.

In order to succeed in-house, a lawyer must participate proactively in meetings. As you get to know your sector better, you may find that you can make a useful contribution to matters that are not legal. With your talent you are as capable as contributing intelligently to achieve the business goal in hand as the Excel whizz to your left.

You should have a basic understanding of whether legal privilege will attach to a communication (you may well be the lawyer on the floor on the day when a dawn raid ( www.practicallaw.com/2-107-6173) is conducted within the business and will need to know what communications do not need to be disclosed (see Practice note, Competition regime: EU Dawn Raids: Privilege ( www.practicallaw.com/0-107-3712) ). For the most part legal privilege should apply to communications that take the form of a lawyer-client communication (rather than general commercial advice), but there are exceptions. For example, legal privilege does not apply to communications with in-house lawyers when the relevant business unit is under investigation by the European Commission for competition law breaches. To obtain a better understanding of legal privilege, see Toolkit, Legal professional privilege for in-house lawyers ( www.practicallaw.com/5-613-3925) .

 

7. Understand the importance of your peers

Moving in-house exposes a lawyer to an entirely different peer group than a law firm. This has advantages and disadvantages.

Working in private practice you will be used to your peer group consisting entirely of other lawyers. Moving in-house will require you to work with colleagues from different business functions who do not have a background in law. It will be helpful to leverage off the different expertise that the new team offers, for example IT, finance, surveyors and business development. This is what being part of a business is about and enables you to make decisions that are right for your business. It can be a lot of fun.

However, you may inevitably miss the opportunity to walk down the corridor and run a legal problem past one of your colleagues. When you start in-house, as part of your due diligence into who's who within the bank, it will be important to understand who the other lawyers are so that you can begin to develop that level of collegiality with them. It is also going to be important at this stage to start increasing your external legal support network, for example, through the external advisers you begin to work with.

It is worth finding out what forums are available for you to share issues amongst legal colleagues within the bank. These may simply consist of a 1:1 meeting with your direct manager, a huddle with your team or a weekly call with a wider group of business lawyers.

 

8. Manage external advisers effectively

When you make the move in-house it will be a new experience for you to be on the receiving end of legal advice. It will be really helpful to you in your future career if you can part with your existing law firm on good terms. That being said, the law firms that you can use once you move in-house are usually restricted to panel firms. In the current environment, the purchase of legal services will be dictated by cost as much as relationship. Indeed, there may be pressure on in-house teams to manage external spend by handling matters internally wherever possible. This will particularly be the case where the bank is paying for the legal advice itself rather than being able to pass it on as a deal cost to a borrower for example. It is important to understand these dynamics.

Try thinking creatively to help your legal team find solutions. You may bring new ideas to the table, particularly in the IT space. There could even be another provider that could deal with the legal project more efficiently than one of the bank's existing law firms, particularly if it is a low risk due diligence exercise or a regulatory project involving changing the same clause in a large volume of documentation to comply with new requirements (a re-papering project).

Despite the pressure on costs, there are situations where it is important not to cut corners. For example, if a colleague becomes a director of a subsidiary or joint venture and they need separate legal advice in their capacity as director then you will always need to be mindful of potential conflicts in advising both your colleague and the bank. Also, a law firm may be an essential check in an approval process around a legal risk in a transaction.

 

9. Consider your career development

Career progression is often a cause for frustration for more senior in-house counsel and it is well worth thinking strategically at the start of your in-house career so that you are open to opportunity.

In the current environment, it is increasingly rare that the direct position above you opens up. More often, in-house counsel are making sideways moves or even adding additional roles to their current position to gain new experience. Occasionally, an in-house lawyer may move across to a business role. Sometimes, it might well be that the best opening lies with a different finance institution. As a result, the modern in-house lawyer will need to be far more adaptable than their predecessors and will need to think in terms of transferable skills (for example, management skills, responsibility for a budget, project leadership).

You will need to understand the performance metrics used by your team to evaluate your development. These may well look very different from the ones that you are used to from private practice, particularly at a junior level where you have not shared much responsibility for financial targets up until now. You may also need to adapt your working behaviour to perform more as a team member rather than an individual (see Article, Team emotional intelligence: how to avoid being a "quarrel of lawyers" and create a high-performance culture ( www.practicallaw.com/6-627-4726) ). It is well worth scheduling an informal feedback session during the first six months so that you can check that you are meeting expectations.

 

10. Take ownership of legal decisions

Finally, as you transition to in-house counsel you will learn to become a decision taker. This will involve many of the skill sets that we have already considered above, including risk management and expertise.

A valuable in-house counsel is capable of taking ownership of the legal decisions, but should always be mindful of good governance and the process for decision-taking within the bank. Always ensure that decisions are properly documented.

 
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