Nick Carter: Capital One Bank

A former City lawyer is heading the legal team at Capital One, a company that markets itself as ‘fun’. Jodi Bartle goes looking for a laugh

Capital One Bank appears to think it is in the entertainment business. The oversized credit cards featuring leopard-skin prints, the Union Jack and the vast spilled tub of Smarties adorning the Euston Road office foyer walls, all hint at what ‘fun’ credit cards can be (although probably more for those on the issuing rather than bill-paying end).

UK households have together amassed an amazing (and horrifying) £1tr debt mountain. And as the UK’s fastest-growing card issuer, Britons are lapping up Capital One’s ‘spend now, pay later’ philosophy.

Capital One, in the best tradition of corporates that believe themselves to be unconventional, claims to be a “fun place to work”. To prove how much fun it is, it goes so far as to provide a ‘fun budget’ for each team within the business to have some ‘fun’ for one weekday four times a year. “We have rotating ‘fun-meisters’, who devise how each team will spend their money,” says Nick Carter, international chief legal counsel. “Last year our legal team went to Hyde Park, where two coaches taught us how to roller-blade.” The work-life balance is also evident in Capital One’s official encouragement of staff to spend one day a year working in the community.

Culture, Carter claims, is the bedrock of everything that Capital One does. The company’s roots are in the US, where corporate responsibility is less a token phrase and more an institution. A relatively new player to the credit card industry, Capital One has grown rapidly over 15 years from an idea generated by two business consultants, both of whom are still at the helm of the international business today. The idea, now known throughout Capital One as ‘Integrated Business Systems’ (IBS), was based on a thorough knowledge of the credit card industry. IBS is referred to as a flexible decision-making structure and has nothing whatever to do with irritable bowel syndrome, which is not ‘fun’.

“They sold their idea to a Virginian bank, which they quickly outgrew,” says Carter. “They literally went from zero to hero and it was entirely deserved – the business is built on intelligence, guts and risk management.”

Shortly afterwards, while looking at expansion, the UK was seen as the next obvious place to start. “We came into the UK in a small way and then launched into a growth curve. We now have three and a half million customers in the UK – this is the kind of growth curve we want to see continue. Last year we gained more accounts than any other card issuer,” says Carter.

Carter came on board in December 2000 to take up the post of international chief legal counsel – a role that was specifically designed for him. His breadth of reach within the organisation has seen his role evolve since then to include functions as diverse as responsibility for the company’s internal audit and enterprise risk management groups. He says that while he arrived to run the legal function, he also came with the purpose of being more involved in the overall business and the planning and execution of strategy.

“It’s been very satisfying to see the internal audit mechanism turn into something that delivers value back to business,” says Carter. “Instilling the risk management function and building it out has been a significant change for the business, especially in terms of getting it to the point where people want to work there.”

Carter’s legal career began at Freshfields Bruckhaus Deringer, where he trained, qualified and worked as a partner for six years, specialising in IP/IT and focusing on an amalgam of science and law.

Carter says that when he began at Freshfields, the firm did not have any speciality in IP and IT. “I became involved in building the department as a business, developing it through various cycles while learning how to be a lawyer,” he claims. His role, he says, focused on building the business and developing the specialist IP/IT team. “But after doing that in those sequences, I was ready to do something a little different,” he adds. The move to Capital One came after 17 years in private practice.

“I moved for very important reasons regarding career-building,” explains Carter. “In some respects I stayed in private practice longer than I originally planned. I ended up on the technical side, doing the same things – the cycle comes around and there are less new things.

Providing advice to outside clients and the demands of running the practice gives you relatively fewer levers to play with, to build, plan and strategise around and develop, than working in industry. I wanted to expand my horizons and be more closely involved in the business, rather than simply seeing things from a relatively excluded perspective.”

Carter now reports to Fergus Brownlee, executive vice-president of Europe. Under Carter sit two legal directors who report to him and run the legal function, which is currently split between the UK and international. “This is not now such a very helpful division because we work as a team – divisions of labour are not jurisdictional,” he admits. “The lines of reporting are based on a type of matrix, where horizontal and vertical lines of communication run across the business and business functions.” Carter says the anti-hierarchical system works well, ensuring an appropriate degree of local autonomy and local accountability, while also acting as a good lock-in to what the business and corporate strategy is doing as a whole.

The legal team is split roughly between the London and Nottingham offices, and Carter spends time in both locations. “The offices are set up with wireless technology and hot desking designed to enable us to plug and play,” he says. “This is useful because people are rarely in the same place two days running.”

Capital One has no formal legal panel, which is a deliberate decision on Carter’s part. “I don’t hold to the things you get from having a formal legal panel. We go to firms for what we need. We do a lot ourselves, but do need outside support,” he admits. “Part of the reason for this is the complexity of the business – it’s highly regulated and we follow a complex model in terms of how we gain customers, how we look after them and how we are expanding the business. It’s important that our lawyers are close within the business rather than being simply an independent function. We get our lawyers around the table early on.”

Carter says his choice of counsel is largely personality-driven. “We looked for and found people who understand us, who’ve taken the time and care to get to know us and who have a good cultural fit. We’re an interesting organisation – if you come here with your banking hat on, you might not succeed.”

As for the business, exciting prospects are the strategy regarding the European and international business. And one thing is for sure – Capital One will keep on having fun and the punters will keep on flashing the leopard-print plastic.

Capital One’s firms
Capital One instructs Clifford Chance on major finance transactions, Simmons & Simmons advises the bank on some international matters, while Capital One uses Herbert Smith for certain types of litigation. Outside London, the bank uses Eversheds for HR matters. International chief legal counsel Nick Carter says the bank needs a broad base of firms “because we’re in Nottingham and London, so we need people on the ground in both locations”. Cleary Gottlieb Steen & Hamilton is used for cross-border work, as it “makes sense to use their global reach”. The bank also has “good relations with Paul Hastings Janofsky & Walker”.

Nick Carter
International chief legal counsel
Capital One Bank

Organisation Capital One Bank
Sector Banking
Employees 17,000
Turnover $9.7bn (£5.41bn)
Legal capability 12 lawyers (outside North America)
International chief legal counsel Nick Carter
Reporting to Executive vice-president Europe Fergus Brownlee
Main law firms Clifford Chance, Eversheds, Herbert Smith and Simmons & Simmons