Canadian Lawyer InHouse

21 CANADIANLAWYERMAG.COM/INHOUSE JULY 2017 It's something I had always thought about doing and to his credit he was willing to do that — come in and go through that exercise with us. VESELY: I spent most of my career in private practice in New York and San Francisco — I think being a legal department of one you need someone to call. You need someone you can call and say, 'We're thinking of launch - ing a fund in Luxembourg and I don't know the first thing about Luxembourg.' You need someone to walk you through it and then you'll call him or her when the work is there. I find those kinds of partners can be an ear for you and you can learn from them. One of the partners we use on all our margin agreements I've learned a ton from her and she doesn't charge me for it. She walks me through it. That's been critical for me. STERNTHAL: For those of you with larger departments, do you have experience with the procurement departments wanting to manage the law firm relationships? We've seen that in the U.K. to the frustration of both law firms and legal departments. COTRONEO: We have a hybrid model. Our procurement third-party provider manage - ment — they do manage certain law firms for certain work. We have a slew of collec- tions work — that is the type of legal work they would manage with great success and great expertise. In the legal team, we man- age the more specialized legal work and any- thing that requires a higher-level approach. INHOUSE: DO you have to go to RFP? Do you have a panel? COTRONEO: I have a panel right now and it depends on the scope of the work. It de- pends on the type of work I'm looking for. OZYETIS: We don't have a process like that. It's simpler for us to execute against whom we wish to engage. INHOUSE: Megan, what is your major challenge with external counsel? VESELY: Because most of my counsel are U.S.-based, I'm very cost conscious of the exchange rate. Fees are a huge thing. Growth is our No. 1 topic and growth for us is in a highly regulated space. We sit and wait to see what the Trump administration is going to do, is the SEC going to have a budget, what is the new chair going to do and you can only trust yourself so much, so I really rely on calling these outside firms and asking what they think. It's the same here for the regulatory environment, but I don't want to be billed every time I pick up the phone. COTRONEO: My challenges are how to get external counsel to be that extension of my team and how do I effec - tively have that deep understanding and we need to know how [to] pivot as the business is changing, how do you most effectively get that information to them to use it for the right level of advice for us? OZYETIS: I find our firms proactive in what they do, they reach out and feed informa - tion or resources that [are] relevant. INHOUSE: When it comes to fees, how are you handling that challenge these days? Do you see discounts as an AFA? VESELY: I'm significantly obnoxious. You're always asking for a discount and you learn to be bold and not shy about that; you want to feel you're getting something. I find less and less I am asking for a memo, I'm calling up and saying 'Tell me what's what.' I'm not shy about asking for cuts. With a couple of firms, we are on a retainer and I think that a good part of our budget this year will go to a com - pliance consultant. And as we look to regis- ter in various jurisdictions, we really do need someone to come in and give the mock exam. INHOUSE: Are U.S. firms ahead of Canadian firms in terms of fee structures? VESELY: Absolutely. I think that's true. We've been preparing in the U.S. for my entire career for these kinds of arrange- ments. I don't know if that's because 2008 Obviously, we're in a period of tremendous transformation in the legal profession where everyone is being asked to do more with less. We're hearing persistently that the in-house bar is increasingly capable to do more and more tasks, but you also have tremendous regulatory and compliance pressures. NEIL STERNTHAL, Thomson Reuters Canada really hit us hard, but it's also very competi- tive. I work with a woman who serves hedge fund managers and she's had to be very cre- ative with her fee arrangements. COTRONEO: I've found our external firms very open to it. The tide has changed fairly recently in the last 18 months to two years. We have a combination of arrangements — some caps, some volume discounts. We have alternative providers that aren't exter - nal firms. To get this right, it is about mak- ing that investment and setting expectations at the start of a relationship and then circling back and constantly evaluating. Did we get this one right? Could we have used a differ- ent model? We really do require that evalu- ation of arrangements to make them stick. REBICK: How much pressure do you feel from the business in terms of your use of and spend on external counsel? NGUYEN: Not a lot, actually. The CEO de- fers to me, but I exert the pressure on my external counsel in that regard. I want to make sure we are getting value. To Megan's earlier point, I've had a different experience with U.S firms. We're in the process of se - lecting a U.S. firm and two have come back with north of $1,000-an-hour billing rate and wasn't prepared to have a conversation whereas a third firm said they were prepared to help out on a fixed-fee basis and do what -

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