Savings grace: Liz Kelly, Nationwide Building Society

Nationwide GC Liz Kelly has created the building society’s legal team from scratch to cope with a host of regulatory challenges in markedly altered business environment.

The financial services industry is in the middle of a shake-up, with new regulatory requirements ­keeping in-house lawyers on their toes.

Internally at the Nationwide Building Society the past few years have also seen a shake-up. Culminating in the appointment of the company’s first-ever formal legal panel last year, general counsel Liz Kelly has been drawing together the strings of what was previously a scattered approach to in-house legal services.

Kelly was appointed as general counsel in 2007, around the same time as the appointment of Graham Beale as the society’s chief executive. She had spent the previous five years working her way up through Nationwide’s legal function.

For Kelly the appointment was a chance to work out what the role of Nationwide’s legal group should be. She began by looking at what she calls the group’s “vision”, a process that took six months, which included persuading the legal team and the company’s management to buy into her concept.

“During my first year or two there was a lot of focus on making sure we had the right vision, but also [on] what our remit should be,” Kelly explains.

She says she decided that the legal group should focus internally on high-value “cutting-edge” work in areas including treasury and ­capital markets, corporate and outsourcing. She says that decision led to two rounds of restructuring within the team that necessitated some redundancies and which focused on both ­technical competencies and whether people had the right “culture”.

“You’ve got to have people who have solid communication and ­interpersonal skills,” says Kelly. She links this to the rush of regulation in the financial services industry, saying a lawyer needs to offer more to the business than just legal advice.

“The big push for me is for [legal team members] to be seen as ­business advisers with legal hats, not lawyers with business hats,” she adds. “Those who do well here are those who stick their necks out.”

Once she had managed to shift the vision of the legal group Kelly set about changing the way Nationwide managed its external advisers. Previously, she says, the in-house legal team did not manage the budget for external advice – different business units instructed their own lawyers separately, resulting in a large spend and more than 100 firms being instructed.

The panel review process saw Kelly and her team reduce both the spend and the number of law firms Nationwide uses. During the review she gave firms clear performance indicators and rationalised legal spend, “but not in such a way that we were hitting law firms over the head”.

The final panel ended up ­consisting of Allen & Overy (A&O), Burges Salmon, Eversheds, Nabarro and Olswang. Another 13 firms plus the main panel minus A&O form a commercial lending panel.

Kelly is keen that the relationship with panel firms is two-way. She provides training on the society’s business and last year ran a one-day conference for all panel firms, which she says was an “enormous effort” but worth it.

Panel firms also send lawyers on secondment to Nationwide, and Kelly wants her lawyers to have the chance to go the other way to the panel firms.

Another recent development at Nationwide’s legal department is the arrival of three trainees. The trio ­started last September and so far Kelly is pleased with the way the programme is developing. The trainees are from diverse backgrounds – one previously worked in a Nationwide call centre, funding herself through law school, for example.

Just as in private practice the trainees are rotating through ­departments and will also get a chance to experience life in a law firm at one of Nationwide’s panel firms.

“This encourages good collaboration,” comments Kelly, who adds that she is also sending more senior in-house lawyers on secondment ­outside the company.

Meanwhile, Nationwide is ­keeping on top of the barrage of requirements coming from governments in both the UK and EU. A group led by Nationwide’s head of HR and corporate affairs monitors ­developments.

“We have 100 per cent confidence that we spot every initiative,” Kelly states.

Recent issues include a report on the future of banking and the FSA’s new remuneration code, and Kelly says the legal group is heavily involved with the process of keeping on top of developments.

“From a group legal perspective, it’s fundamental that we’re involved, because when these things turn up in regulation we have to be clear about how they’re implemented,” she notes.
Similar initiatives see Kelly sit on a group within Nationwide that ­monitors legal risk. She sees this as an integral part of the strategic vision drawn up following her appointment. She reports that closer integration between business and legal is ­something that has been adopted by other units within the society.

“What’s nice about the strategy is that a lot of people have nicked it,” Kelly concludes with satisfaction.

Name: Liz Kelly

Organisation: Nationwide Building Society

Industry: Financial services

Position: General counsel

Reporting to: Group director of strategy and planning Alison Robb

Turnover: £2.2bn (2010)

Employees: 18,530 (2010)

Global legal capability:48, including 35 lawyers and three trainees

Main law firms:Allen & Overy, Burges Salmon, Eversheds, Nabarro, Olswang

and a commercial lending panel comprising 17 firms