Risk taker and breaker
20 May 2013
Global GC Adam Rosman’s role at insurance broker Willis demands that he not only defends the business against current risk but that he spies any potential on the horizon
Willis global general counsel Adam Rosman has just flown in to the City from Manhattan for a few days of meetings before jetting off again. Included in those meetings is an 8am appointment with the broker’s head of procurement, Graeme Holder, to discuss how best to manage future legal spend.
As one of the four international brokers that dominate the insurance market - Aon, Marsh & McLennan and JLT Group complete the group - Willis wields considerable power in the sector. The broker has no formal legal panel as such but does regularly turn to Baker & McKenzie, Clifford Chance and Clyde & Co, among others, for advice.
Conscious, however, of the changing insurance legal landscape and the rapid consolidation in the sector, coupled with the financial control demands of the business, Rosman is working with Holder to get the best out of his firms.
Those discussions include possibly benchmarking the broker’s individual advisers. “More robust benchmarking our per lawyer cost to see how they compare,” he says, adding that this is not just purely a procurement exercise.
“Professional services is hard for procurement because it is about people,” Rosman says. Law firms, he continues, can be “incredibly responsive” to a client’s needs, “if they charge too much we just won’t work with them anymore.” It is a straightforward policy and one that helps Rosman’s team squeeze best value out of advisers.
“We’re tight on costs all over the company including legal,” he says, adding that the biggest disappointment comes when he is surprised
by the size of a legal bill. It is the surprise that worries him most, he explains, adding “it’s because they didn’t say ‘let’s talk about it’ ahead of time, and then you get hit with a big bill.”
Rosman’s remit is huge and has expanded massively since he came into the role last August, having spent three years as deputy general counsel. The promotion coincided with a change of management at Willis, with long-serving chief executive Joe Plumeri - a stalwart of Wall Street - being succeeded by Dominic Casserley in January.
As an executive officer, Rosman works closely with the Willis board and is in regular contact with the senior management. He is responsible for the Office of the General Council (OGC) worldwide, which goes right to the heart of the broker’s risk management and compliance functions.
The OGC encompasses several overlapping functions, including: legal; internal auditing; compliance; risk management; business continuity and the secretariat. Each division has its own general counsel who will talk to Rosman daily to keep him abreast of the issues.
The legal team, meanwhile, has three general counsel covering North America, the UK and international. The entire UK legal team sits on the 13th floor of the Willis building in the City, while the international legal team has lawyers in Germany, Singapore and Latin America. The US team, meanwhile, is divided between New York and the broker’s Nashville base.
The broker is domiciled in Dublin so as well as visiting the key legal bases, Rosman is also a regular in Dublin - although it is usually a flying visit with little time for a tasteof Guinness.
It is a gruelling job and he confesses that while in London the working day will usually stretch from 8am to past midnight - so that he can check in with New York.
As you might expect Rosman is closely aligned with Willis’ deputy CEO, Steve Hearn (see box), when it comes to how the legal functions should operate in relation to the company.
He echoes Hearn’s thoughts by saying that the group works in two ways - offensive and defensive.
“Defence is the traditional role of the legal department,” he says, explaining that it means protecting the business from current problems. “Offence means you’re looking for problems beyond the horizon.”
It is preferable for the company to keep legal work in-house, but there are inevitably times when external advice is needed.
“Generally speaking, for litigation we go out,” Rosman says. “The benefit with litigation is that it has a beginning and an end, so firms can buy in if they need to.”
It fits with the company’s preference for a flexible adviser roster. While Rosman has a fondness for the likes of Weil Gotshal & Manges, Bakers and Clifford Chance, he realises that there will arise a time when, in some far flung destination, it is better to seek the advice of lawyers on the ground.
“Litigation is local,” he says. “Who the judge is, who the opposing counsel is, what the dispute is about and what the court system is - you need a local lawyer who is familiar with that jurisdiction.”
Internally as the business grows so does the legal team - although Rosman is clear that this is all about balancing costs.
The OGC itself is a cost drain on Willis, so the benefits need to be clear and need to be monitored to ensure best value.
Like most financial services company’s, Willis has seen the regulatory burden it is under get heavier post-2008. Rosman says the team will need to grow to reflect that.
One of the challenges of the past five years, he says, has been the implementation of the Bribery Act in the UK, a piece of legislation that aims to flex the muscles of domestic law. He says that all staff received training in relation to the act, starting with the board and permeating down through the ranks - it is a culture that has to be led from the top.
Despite plans for a benchmarking exercise Rosman believes that Willis is striking the right balance when it comes to walking the costs tightrope.
“I’m happy with how things are,” he says, “we have a good mix of law firms and good costs control.”
And then he is off to the next meeting, squeezing the most out of every minute he has in the City, before jetting back to New York.
Adam Rosman, Willis
Position: Global general counsel
Reporting to: Chief executive Dominic Casserley
Global revenues: $3.48bn
Total number of lawyers globally: 40 with five secondees
Main external law firms: Baker & McKenzie, Clifford Chance, Clyde & Co, Weil Gotshal & Manges
Willis deputy CEO Steve Hearn on the role of the chief legal counsel
Businesses are becoming more complex and global. At the same time they are faced with a progressively intrusive and prescriptive legal and regulatory environment since the global economic crisis - particularly in the financial services sector. Given this tough operating environment, businesses need a strong corporate culture capable of delivering the right balance of entrepreneurialism and control.
In this fast-paced and challenging environment, the Office for General Counsel (OGC) in any multinational organisation should focus on three key priorities; to defend the company, to be business enabling, and to contribute strategically.
The OGC’s role can be summed up in two parts; offensive and defensive. Thinking ahead to defend the company against lawsuits, regulatory risks, employment liability issues, and operational risks is the traditional defensive role of the OGC. This is the bare minimum that any large organisation should expect from their legal department and to do this, the OGC team need to be fast, thorough and commercial.
As a world-leading risk adviser and global insurance broker, Willis is not surprisingly keenly focused on its own risks. Operating in a range of different jurisdictions around the world brings with it risks and as such it is imperative that our group has a deep understanding of the unique legislative environment in each of the jurisdictions that we operate in.
But compliance should be about much more than that; it should be viewed as an enabler for business. Compliance enables us to operate wherever our clients need us to be, meaning we can offer products and services that support and empower their businesses. In China, for example, Willis has a large network of offices and being able to meet the complex regulatory challenges in this jurisdiction gives us a competitive advantage.
If a business is to face up to these huge regulatory challenges it is essential for the legal department to work very closely with other parts of the organisation to ensure a willingness to comply as opposed to being seen as a purely tick-box exercise. Taking this collaborative approach guarantees that the legal department is seen as supporting the business rather than standing in its way.
A company also needs to have the right structure in place, as well as the right corporate culture - which means a permanent seat at the top table for our chief legal counsel. Being on the offensive is all about sitting at the top table with the CEO and contributing strategically to the direction in which the business is heading.
Our GC might be called on to raise red flags should he feel a certain project or investment, for example, represents an unacceptable legal risk to the business. Even more importantly, the GC should act as a kind of “barometer” of the business. The legal department generally has a strong sense of the current conditions or risks a business is facing at any one time and this enables the Group Operating Committee to look ahead and anticipate risks or problems that the organisation may be likely to face in the future before they materialise.
The agile thinker
Finally, in my mind, a company’s chief legal adviser needs to be an agile thinker, capable of understanding complex legal topics and explaining them in plain English. Sometimes he may have to make judgements with incomplete information - because it is not always the case that you have all the facts in front of you. For that - he needs good instincts and an ability to operate with ambiguity. That can be difficult for some in the legal profession.
Chris Galyer, head of the legal department, JLT Group
The legal department of Jardine Lloyd Thompson Group (JLT) instructs outside lawyers only when it is required.
For the most part, legal work, whether it is dispute resolution, commercial, employment or property, is kept in-house. When the occasion arises to look externally, we choose from a small group of law firms which, over the years, have proved to be loyal, reliable and attuned to the exigencies of insurance brokers.
JLT has no formal panel but there is agreement with the principal firms we use as to the rates that will be applied in respect of different categories of fee earner. At the outset of any matter, it is sensible to scope what is required, what is expected and obtain an indication of the price. That reduces the potential for surprises and helps ensure value for money.
Whilst costs are based on hourly rates these days, there is generally a perception of what is an acceptable level of cost for each particular matter.
On the rare occasions where costs seem to have gone above such a level, then a full and frank discussion takes place with the law firm and an accommodation is reached.
Law firms have their own particular areas of specialism, even within insurance or reinsurance, and those areas of excellence tend to inform which firm is instructed on any particular matter.