Royal Bank of Scotland
22 May 2006
What is the role of an in-house team? It is a question the Royal Bank of Scotland's (RBS) senior legal team has been wrestling with for nine months.
The Lawyer travelled to Edinburgh to quiz general counsel Miller McLean and deputy general counsel Chris Campbell on their recently unveiled overhaul of a large part of RBS's in-house legal group, which is likely to have far-reaching implications for the external firms that RBS instructs, most of which will soon be gearing up for the bank's panel review later this year.
It was RBS group secretary and general counsel Miller McLean who originally initiated the restructure in 2003 at the time of the bank's highly contentious panel review. As he puts it, he based the group on a "shared services" model, which was intended to ensure that the legal team was more closely aligned with the business and that commercial expertise and advice were concentrated in centres of excellence.
Campbell joined the bank from Dundas & Wilson, where he was managing partner, to take the evolution of the team to the next level.
The most eye-catching part of the restructure is the team called 'specialist services'. It is an intriguing title, conjuring up images of an elite band of freewheeling lawyers abseiling in to fix things when they go wrong. A sort of banking SAS.
In reality, it is a 15-lawyer firm within a firm, a gun for hire by whichever RBS group needs it most. Campbell has formed six new groups, one of which is specialist services. The lawyers in each provide most of their services to one division within the bank. For example, the lawyers in Fiona Lavender-Brown's insurance group serve RBS's insurance division, while those in the group headed by Donald Macdonald serve the various teams that come under the heading of 'retail markets'.
By contrast, the lawyers in the specialist services team will either provide advice to the group as a whole or be called to provide specialist input alongside another group legal team in delivering what Campbell calls "a multi-skilled solution to a particular problem or opportunity".
In essence, it is about giving the entire group legal team additional flexibility and focus. "We're recognising that the group's legal needs are constantly evolving and we'll need new and specialist skills," says Campbell. "These can probably best be delivered from a central team supporting and/or supplementing the work of our usual business-facing team."
The perfect partnership
So no legal mavericks in black balaclavas, but additional glue to bind the RBS legal group together. And Campbell, still settling in after only arriving at RBS late last year, is keen to stress the importance of teamwork throughout the interview.
As if to illustrate the point, Campbell is sitting side-by-side with McLean. The duo, undoubtedly two of the UK's most powerful lawyers (and come the panel review two of the most popular), are perched on a smart sofa in McLean's spacious office in RBS's purpose-built, extraordinarily airy Gogarburn campus, near Edinburgh Airport.
It is an impressive display of solidarity and the bonhomie between the pair appears entirely genuine. It was McLean who spotted in Campbell the communication and business management skills that he wanted to move the RBS team forward to the next stage. He will have also noted that Campbell was the man who had the authority to take Dundas by the scruff of the neck and transform it from an unspectacular Scottish firm into a highly commercial international business.
As The Lawyer reported this month (8 May), Campbell completed his overhaul of RBS's UK and Irish in-house functions at the end of April, having kicked it off with a three-month assessment period up to December 2005, followed by a period of implementation.
Currently the review affects some 140 lawyers in the two groups, although there are plans to roll the model out across the full 330-lawyer team.
The significant development and growth of RBS's business over the past few years was a key factor driving the restructure. The National Westminster Bank acquisition in 2000, the Charter One deal in the US in 2004 and the acquisition of a stake in Bank of China in 2005 have all added strain to group legal.
Head of group legal for corporate lending Leonie Fleming says that there was a recognition that the bank had grown to a size where something needed to change. Fleming argues that the restructuring has given lawyers a real sense that they are a "part of the business."
Campbell says the restructuring was "heavily influenced" by changes in RBS's business, including major reorganisations affecting the bank's two largest divisions, corporate markets and retail markets, within the last year. "We naturally need to reflect and respond to those changes to ensure that group legal is properly aligned," explains Campbell.
The alignment has seen the consolidation of 10 teams into six. That has included merging the Edinburgh and London legal groups and folding a number of units into the corporate lending group headed by Fleming. Campbell maintains there have been no redundancies as a result of these developments. He also argues that the restructuring has resulted in "no significant relocation". He says he is "trying to get away from geography" and does not want the team to be "dominated by people sitting in HQ".
Another key change was the introduction of what Campbell describes as "a form of matrix management"- ensuring that the in-house teams strike the correct balance between alignment with the legal group's strategies and policies and ensuring a close working relationship with the individual divisions they serve.
But the "ultimate objective", says Campbell, is to ensure that the legal group maximises its contribution to RBS.
"The crux of this is, what is the role of the group legal function?" Campbell says. "That is, the balance between services provided by external firms and those provided in-house. This isn't about reducing headcount, it's about efficiency."
To help with this aspect, the review has also seen the introduction of 'relationship managers' to help with resource planning among the legal groups and to manage the relationships with the divisions the groups face. Campbell meets monthly with the managers to approve their plans and is heavily involved in their selection (they are all senior lawyers and, in certain cases, for example with Lavender-Brown, they perform a dual role as both relationship and line manager).
As Macdonald puts it, the new initiative is "partly about communications and partly about focus".
He adds: "We're a finite resource so this should mean we can better align our resources to support them." The idea of relationship management derives primarily from Campbell's years in private practice and is one of the most obvious signs of a change at RBS.
"Relationship management is very dear to my heart," he admits. "I'm a great believer in strong relationships generally. It has to be a two-way thing, which means investing time and effort in the relationship."
A bright future
During, and more importantly beyond, the review process, the keys to its success have been consultation and communication. They are areas that RBS has been less than famed for in the past, most notoriously in relation to its panel review in 2003.
So it is worth making the point that Campbell's exhaustive review included canvassing external firms for feedback, as well as the RBS divisions serviced by group legal.
Not that any of them were willing to share their thoughts with The Lawyer. The clout that RBS wields in the legal market can be assessed by the reluctance among private practice lawyers to discuss the bank even on background. According to one source: "They won't talk - they're too scared of it being leaked back to RBS."
But it appears that communications at RBS have generally improved - something that may cheer those firms looking to pitch for a panel place later this year.
As Rachel Curran, head of group legal in Ulster, puts it: "Relationship management and getting the legal team in close alignment with the business's operating model is something that has long been missing from in-house teams generally."
With Campbell on board, it appears to have arrived at RBS.
If the internal restructuring is partly about improving communications and teamwork within RBS, then the panel review will surely be more so. And deputy general counsel Chris Campbell was, after all, the man who headed Dundas & Wilson through the tumultuous post-Andersen period. He understands better than most the importance of good communications.
"The feedback from our external firms was a useful steer as to what needs to be tweaked in-house and on the next panel review," he says.
A source close to RBS described Campbell, perhaps unfairly, as "a marketing man". He is, at least, well acquainted with the business of running a law firm, whereas general counsel Miller McLean has spent 35 years at RBS.
Already, less than a year in, he has implemented some significant changes.
According to the head of the new corporate lending group Leonie Fleming : "Chris said that 'we have something to be proud of and we should shout about it', and Miller has come around to that way of thinking."
Royal Bank of Scotland