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brings to the table, first and foremost because they are close to the business. They can understand why the risk hap- pened the way it did or what the issues are. In terms of external counsel com- ing to me personally or even the orga- nization with ERM, I'm not sure it's on their radar screen yet. HILBERS: I would agree with that. We have had a strategic partnership with a couple of law firms for about a decade now, so the benefit of that is our exter- nal has a pretty good knowledge of our business; not as great as, obviously, in-house counsel does that lives it day- to-day, but they have a pretty good knowledge of our business. From my perspective, I'm looking for my in-house counsel to provide that enterprise That should be part of their service and there's expectation that they provide that, as well. For example, risk-management service. certain files that we have no in-house lawyers on. It's all dealt with by external counsel. My expectation is that they will deal with those files and deal with those matters in a similar manner as we would, and have an understanding as to our risk tolerance. It is very difficult to get your external counsel to understand your risk tolerance and provide that risk-adjusted advice externally. there are MAHARAJ: I just think the role of in-house counsel has evolved in Canada over the last five or 10 years. We are part of the business and so we look at it from that perspective. External counsel looks at your business very, very differently. The very, very good ones can make that jump, but one of the reasons why good in-house counsel have been successful is because they are part of the business. RICHARDSON: I think that's the value that in-house counsel brings. When you look at managing risk, you are look- ing at identifying what the potential challenges might be, assessing how that impacts your business, and then responding. I think the role outside counsel can play is in the identifica- tion side. They can raise the flag and say, 'Hey, there has been this new law or new regulation. This could impact a sector. plays is they know and understand the business and how the different challenges that may come to fore will impact your operations, and then being able to take the next step and look at how does that impact risk in terms of your overall enterprise and what are the steps that you can put in place to manage or mitigate that risk. ' But the role in-house counsel EVANS: We use our claims history to inform our enterprise risk management planning and we look at critical occurrences to help us with refining mitigation strategies, et cetera. We have had the same external firm doing our claims work for us for 20, 30 years. So we have engaged a number of the lawyers at that firm who have been very involved with our litigation over the course of a number of years to sort of be an independent observer in terms of how that part of our risk-management framework has developed. It' helpful sometimes to have somebody who is looking at it from a very narrow perspective and not in the business on a day-to-day basis, and we have learned a lot from them. s been very MAHARAJ: Enterprise risk management will be a tough nut to crack, to get real value from my external counsel to be really involved in that process. HILBERS: I would suggest, though, you challenge your external firms to provide that service and that value. Look at the fees that you are being charged. You need to challenge them. We also evaluate our external counsel on a quarterly basis. One of the evaluations is knowledge of the business and another one is value- added services. EVANS: While they may not know your business as well as you do or members of your team do, they oftentimes, if they're really good at what they do, know the industry really well. So when we are talk- ing about trending or seeing that black swan before it arrives in your pond, sometimes they are able to bring things to your attention that have yet to hit your radar screen. HILBERS: You have to show them that that's important to you and tell them that that's important to you, and you're expecting it. CLARK: The regulatory risk and how it will impact an industry at a high level is really something that outside firms have mastered, definitely in the financial ser- vices area. So, very often, you will receive a phone call or see a little publication come out on their web site where they tell you, 'This is coming. There's a bill pending, lation and we think it's going to impact your business in this way or that way. think you use your outside counsel as someone with the resources to monitor laws and regulations applicable to an industry. IH ' or, 'There's a new piece of regu- ' I ... and wherever you need to be in Canada. Your lawyer. Your law firm. Your business advisor. CALGARY | TORONTO | EDMONTON | OT TAWA | BEIJING | DUBAI | ABU DHABI | DOHA BennettJones-3_IH_Aug_12.indd 1 INHOUSE WWW.CANADIANLAWYERMAG.COM/INHOUSE AUGUST/SEPTEMBER 2012 • 12-06-28 10:55 AM 25 N

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