Canadian Lawyer InHouse

JANUARY/FEBRUARY 2019 18 INHOUSE SKAKUN: There is the job of making sure the whole organization is moving into the next level of sophistication as we move across Canada, and on the corporate devel- opment side, fi nding those innovative part- nerships that haven't been thought of and building relationships with the regulators on that front, too. As I also have responsibility for the board of directors, I will also be focused on revamping their committee mandates and making sure the right structures are in place. To manage a federally regulated fi nancial institution, I think we need to start seeing technology committees on boards because, as with so many business- es, technology is driving it and you need to understand it in a way that hasn't been understood before. It has to be looked at from a strategic piece of how architecture works and how artifi cial intelligence works and how that all threads together to lead to a better customer experience and what the risks are that are attached to those agree- ments and partnerships. I would also like to see us have more of a role at the government table. I think ev- ery GC who understands legislation needs to understand that they should be at the table helping to shape some of that legisla- tion, because if we fall behind on innova- tion, which I think we are, and get wrapped up in too much red tape and bureaucracy, then we fall behind. When I was at Mogo, I heard about some companies that had by- passed Canada altogether because of our regulatory complexity. INHOUSE: What regulatory matters are you focused on? SKAKUN: For things such as Bitcoin, it is early days and we need to understand more about it. We don't have a strong regulatory structure around crypto-currency, but understanding what the potential is and do you have a responsibility to play in that space? If not, and your customers want to play in that space, what options can you give them? I know the securities commissions are grappling with whether it is a security or not. The bigger piece that applies to banking is the blockchain piece and that applies to law fi rms, too, especially if you look at smart contracts and the potential there. The Bank Act is also undergoing a re- view. Financial institutions still require us to mail fi nancial statements, but for a small institution like Coast Capital, that adds up to mailing costs of $1 million, which 99.999 per cent of all people will just put into the recycling bin. Being part of understanding the business and having a business voice is critical be- cause if you are just the regulatory person it's not very satisfying from a career choice. I'm also involved in analytics of the busi- ness even with the products we offer and working with the marketing team to look at something innovative to add. I can't say enough about the time I spent at Mogo, stepping out of a very conserva- tive institution and going to a startup that grew and being in the trenches of building something from scratch, building brand and platform and understanding great digital customer experience and what that means from a legal perspective. Regulatory worlds were not drafted with the mind of having a great experience in an app. So how does that 18-page disclaimer look from a customer experience? I also have the corporate development role on top of the GC role now at Coast Capital, so I am looking for partnerships — whether that is merger partners and poten- tial acquisitions. Banks get into the habit of thinking you need to build it yourself ver- sus no, you can partner as someone prob- ably does the digital experience much bet- ter because they are not dealing with legacy systems — they are fresh to it versus having to maintain legacy products. If you look at fi ntechs worldwide, they have done some innovative things around removing the friction from your bank- ing experience. I know I drive some of our law fi rms crazy and I am probably about to drive them even crazier now that I'm back at Coast around what are they doing to re- move that friction from legal services. INHOUSE: How do you approach manag- ing the work you do with external counsel? SKAKUN: I work with Vancouver and Toronto fi rms — all the regulatory piece of our business is largely Toronto-driven. For us, 2019 will be a bit of a shakeup of outside resources. I have a Q1 initiative to review all the legal providers at Coast Capital. There are some great lawyers we work with at some great fi rms, but I continue to be a little disheartened that as the client I need to come up with the innovative idea versus slipping back into that standard billable model or blended rate. There's really nothing strategically helping me beyond offering a technical expert on something versus saving me something on the day to day and making my life easier. What I've asked of the team is to look at our three-year spend and where it went — what was the return on investment on legal spend in terms of internal learnings and what work should now really be staying with us and what are those basic things that are low hanging fruit that can go out or that are so technically complex we don't have the expertise in-house. If there is no ROI and somebody spent three years sending technology contracts out to a fi rm if there hasn't been ROI on that, why not? I continue to be a bit disheartened by the lack of progress on the billing model. It's kind of the same tick boxes: billable hour, blended rate or fi xed fee? Nobody is really looking at anything else. They have all the data and the technology is starting to exist so, like other industries having to change and morph, why aren't the big fi rms doing that? Why are they waiting? There is an ongoing issue of managing the costs of legal services. People have sticker shock about legal bills in a way they don't about consultant's bills, for example. They are happy to pay the Deloittes and PWCs of the world, but legal bills have a "wow" factor. You're always defending the outside spend. If you think about law as a practice, you could compare it to banking: There is the old conservative ways of doing things, but until somebody challenges it, nobody moves. The model is very profi table, so why change it? When I look at banking and the analytics attached to banking in terms of what is important to you, it should be not just to sell you a product but to sell you the right product helpful to your life. All that data is in your fi nancial VIEW presented by 2019

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