Forum Magazine: Legal Ops Takes the Lead — BMO Legal’s New COO Sees Big Opportunity for Legal Operations Professionals

Topics: Business Development & Marketing Blog Posts, Client Relations, Corporate Legal, Forum Magazine, Legal Innovation, Legal Operations, Q&A Interviews

The role of legal operations is getting a lot of attention these days as organizations such as the Corporate Legal Operations Consortium (CLOC) pushes the job title to new and powerful levels.

But in many large in-house departments, legal ops has been around for years, and people like Richard Stewart have been quietly acting as “chief of staff” — pushing forward the day-to-day operational requirements that include people, technology and procurement of external legal services. “It’s lovely that everyone is catching up to where we have been for 10 years,” says Stewart, and not in a condescending way. “It’s nice that it’s being recognized — it’s part of the increasing professionalization of the in-house role. Gone are the days where the in-house lawyers were there just to dispense legal advice. We are now full business partners.”

What gets measured gets managed, as they say, and the business world’s in-house departments need to become more focused on how their own business functions perform. That’s why it’s important to have some someone such as Stewart on staff. Stewart is deputy general counsel and chief operating officer (COO) with the Legal, Corporate and Compliance Group (LCCG) at BMO Financial Group, now based in Toronto. He began formally in the role about two months ago.

“This was an excellent opportunity for me to come and work at the heart of the enterprise,” says Stewart. “It gave me the opportunity to innovate and be an agent of change in the legal and compliance function and to move beyond practicing law in a business context.”

BMO is saying, “Partner with us and listen to what our businesses have to say, and we will help you become more successful because we will all be aligned.”

In the COO role, Stewart is responsible for LCCG’s overall operations, providing oversight for finance, human resources and strategic initiatives. He is also responsible for BMO’s Legal Excellence Program (LXP), which will now be rolling out in Europe as well. He was most recently associate general counsel, UK & Europe, BMO Capital Markets. “To use a phrase, I’m ‘standing on the shoulders of giants’ here, because we’ve been thought leaders in this area of COO for legal and compliance under [EVP and GC Simon Fish] Simon’s vision and stewardship. Fish instituted the office of COO 10 years ago, so this isn’t new for BMO and it’s great to be part of that tradition,” he says. “My role is to manage the day-to-day and strategic aspects of BMO’s big internal legal and compliance firm.”

The way Stewart sees it, there needs to be someone “keeping score in the relationship between legal and compliance and the rest of the enterprise. I think that’s one of the ways in which the COO can help. We have an overview into all the different lines of business groups and can counsel and cajole them into working in partnership with the business better,” he says. “Our strategic aims can get more aligned if someone is there setting the strategic agenda.”

BMO has 650 employees in legal and compliance. “I would describe my role as chief javelin catcher. It’s not through any malicious intent, but you can be dealing with an IT problem in the morning and a clogged drain in the afternoon and how to reduce cost in the LXP later in the day,” he says.

“I am also the person here for anyone’s issues that they feel need to get escalated. I also deal with a lot of the HR issues that arise among 650 people in the legal and compliance organization,” he says. Stewart also has charge of the budget to make sure the department stays on track.

The third piece he manages is the relationships with BMO’s external law firms — the LXP that Fish has pioneered over the last five years — a formal structure to engage with external counsel. “The main thing that interests me is the external counsel relationships,” he says.

Stewart came to in-house in 2013 straight from private practice (four years at Freshfields, then Berwin Leighton Paisner LLP for 10 years). “I knew how law firms worked and what the drivers were,” he says.

But Stewart really sees his job as putting the customer first, and that customer is the one on the street who banks with BMO, not only the legal department’s internal business clients. “My role here is the same as everyone else at BMO: to think like the customer. That’s something that’s really important,” he says.

And that will become more important for the bank’s external firms in the near future. “They think BMO is their customer, but what I want to instill in them is that their customer should be our customer as well — we are all completely aligned. Law firms will always have a bit of reticence to get completely aligned,” he says.

When it comes to defining the legal ops role skill set as it’s currently evolving, Stewart acknowledges that legal ops professionals aren’t necessarily always lawyers. They sometimes have financial backgrounds, project management skills and softer skills — emotional intelligence.

“You’re there to serve the staff, not there to lead the show. One needs a high degree of empathy and understanding of our law firm partners and how they see life,” he says. “I want to take things to the next level and say we need to partner together. We want to get law firms aligned with the bank’s LXP.”

Stewart says the profession is at “an inflection point” in the provision of legal services for the future. “Law firms can no longer afford to sit in their ivory towers without any surrounding context or client sensitivity. Archimedes said, ‘Give me a place to stand and I will move the earth.’ We want to give law firms a place to stand. BMO is saying, ‘Partner with us and listen to what our businesses have to say, and we will help you become more successful because we will all be aligned.’”

Last month, BMO held its first LXP law firm summit. They invited law firms that are part of BMO’s established panel to come for a day to listen to the senior leaders explain what BMO’s business priorities are, what the risk appetite is and how they see the future for the business. “Hopefully, the law firms will learn from that — we’ve had a very good uptake. What’s been encouraging is that they want to come along and see how they can best position themselves for the future. They acknowledge it’s important — some have said it’s the first summit of its kind to be organized,” says Stewart.

A number of UK firms also came to the conference. “I really see us as setting ourselves up for success in the future,” he says.

At the heart of BMO’s LXP is an effort to move away from the billable hour model toward something with “more value-add and more visibility. The law firms have embraced it, and they acknowledge the billable hour won’t always be the right thing and that we need certainty of visibility,” he says.

The next iteration of BMO’s LXP will bring all of its law firms onto one joined billing mandate “nose to tail,” as Stewart explains it, using the bank’s billing system. “That then allows us to be more technologically focused on being able to slice and dice statistics and see where we are getting good value for money,” he says.

“We’re not in this to cut the law firms to the bone; we see it as a win-win and as a mutual partnering. Yes, we will have lower fees, but if law firms work smarter, more technologically focused, then they will also be able to benefit from it. If we have [a] fixed-fee arrangement, we don’t care how they do the work as long as they deliver it,” he says.

At the heart of BMO’s LXP is an effort to move away from the billable hour model toward something with “more value-add and more visibility.”

So, will the future legal department decision makers be the COOs? “I think that’s not an unreasonable assumption,” says Stewart. “Yes, while the GC will always have an important role in the relationship with the law firms, to a degree the COO is the gatekeeper to the rest of the legal team. We are the quarterback — the primary relationship will be through the law firms and the line of business lawyers because they are in the trenches day in and day out. They have gone through the trial by fire, but the COO role can overlay the strategy and get to the customer experience that helps law firms achieve even greater things.”