Rustam (Rusty) Juma, general counsel and Corporate Secretary, Eckler Ltd.,
a 92-year-old actuarial consulting firm with offices across Canada and the Caribbean. Juma is Eckler’s first general counsel.
Vivian Leung, general counsel, BlueCat Networks, a DNS software company with about 380 employees worldwide. Its customers are large enterprises that use DNS software to keep their employees connected. Her legal group has two lawyers.
David Forrest, general counsel, Canada Goose Inc., which makes coats and sells them all over the world. The legal department is Forrest, two lawyers and a legal assistant. He was the first internal legal hire for Canada Goose five years ago.
The 14th annual InHouse roundtable focuses on the business advisory role of in-house counsel. From the burgeoning cannabis industry to established actuarial and real estate companies, the five general counsel on this year’s panel all say their jobs are so much more than providers of legal advice or risk analysis to their companies.
Their real value, they say, is in becoming embedded in the business and being able to provide a birds-eye view to help guide the company’s decision-making process — no matter what the size of the legal department.
Companies are recognizing the trend and giving their GCs a seat at the table.
It’s the deep knowledge of the business, ability to liaise between departments, to translate what their outside legal advisers might be telling them or being able to spot potential issues before they become problems that make in-house counsel so valuable to organizations.
David Forrest, of Canada Goose Inc., points out that his in-depth knowledge gives him a real strategic advantage that he felt was particularly beneficial in shaping the company’s message during its recent initial public offering.
And it’s not just large or established companies that can benefit from in-house legal counsel. Vivian Leung, of technology company BlueCat Networks, says, “I’ve come across companies that don’t have an in-house legal department, and they’ve said to me, ‘We’re not big enough to need one.’ And I always reply back, ‘No, you just don’t know what issues you have. You don’t know what you’re doing wrong.’”
It’s also not just the organizations that might need an attitude adjustment, so to speak.
Lawyers, too, might feel that going in-house means you won’t get to do the interesting, sexy work of private practice. Not so, says Alison Harnick, of First Capital Realty Inc.
“My experience has really been that, as a GC, the breadth of work and the expectation that you’ll contribute to the business much more widely than just as a technical legal expert is there and it’s very rewarding,” she says.
If you have a knack for business, your legal skills might be best suited to in-house practice, says Rustam Juma, the first and only lawyer with actuarial firm Eckler Ltd.
And once you’re in, there are still adjustments to make that will provide the most value for you and the company.
“Particularly lawyers that are coming from private practice, and their earlier stages of their career, you’re so used to getting the work done,” says Sony Gokhale, from The Supreme Cannabis Co. “It’s a bit of caution to not default to that and really play the role that corporations will truly value, that they will actually need . . . being able to understand and advise and allow for a thorough understanding of your business and the decisions that need to be made for that business.”
The discussion on the following pages provides more insights on these and other areas from our panelists. There’ll also be some war stories and other interesting tidbits in the videos from the roundtable posted online at canadianlawyermag.com/inhouse.
InHouse: What evolution have you seen from being a pure legal advisor to being more involved in the business process of your company?
Rustam Juma: In the post-Enron or Worldcom era, lawyers were seen as subject matter experts or generalists. The failure of those companies in the U.S. led to lawyers being whistleblowers as well. And I think it’s important to elevate our role into not just focusing on the legal aspects of various problems but also going above and beyond being the conscience of the corporation; making sure that we’re also providing some advice regarding the moral compass of the company. So, the elevation of legal counsel, general counsel, has been progressing because things have been happening in the economy that have led to that progression.
Vivian Leung: I would say my impression of in-house counsel used to be that he would be a subject matter expert and people within the company would come to you when they needed advice on a certain topic, whereas now, I’m finding I actually run with a lot of initiatives. It is my job to roll things out to the company. I’m the one that puts together the group with people from different departments. So, it’s a much more visible role and a much more business role, because you’re out there working with each of your clients, rather than sitting in your office waiting for them to come to you with a specific question.
David Forrest: You pretty quickly realize you have great visibility to the whole business. That sets the background for being able to evolve into a more strategic type of role. For Canada Goose, specifically, the role has changed a lot. We’ve had so many firsts during my time there, you know, opening our first e-commmerce [site], opening our first stores, going public. So, all of these naturally evolved my role.
Alison Harnick: I think there is an expectation that a GC will contribute widely to a company’s business. I find that people come to me for advice and perspective as opposed to a strict legal interpretation. That’s not what my executives are looking for. They want that perspective, that bird’s-eye view that I think as lawyers we’re well positioned to take because we do work with all the different disciplines. So, at First Capital, specifically, to develop and operate the kinds of properties that we do, there’s so much interdisciplinary collaboration. . . . I have that bird’s-eye view and can see opportunities come together or spot issues before other people.
InHouse: What areas are you being asked about the most by the business?
Sony Gokhale: It’s more about what is not brought up or what’s not specifically requested. The nature of the industry is extremely fast paced. And so we have a domestic market, both for medical as well as recreational use of cannabis, but at the same time, there’s a lot of international opportunities. I find, at this stage, there’s just a lot of requests to understand different regulatory regimes internationally. So just being agile and being familiar with the different moving pieces and being able to support any opportunities or requests for exploring opportunities is probably what takes up most of my time.
Forrest: The way my role becomes interesting is the way in which I have to advise on the basis that preserves our core values. A couple of those are innovation and entrepreneurship. And so I spend quite a bit of time discussing with the business, how to proceed in a way that manages risk appropriately but, at the same time, allows the company to maintain those core values. Those can seemingly, at times, run contrary to each other, but working closely with executives, we found a way to preserve those.
Leung: For substantive topics, I would say data privacy is huge. GDPR is huge. I get asked a lot about cybersecurity, IT security. And something that they don’t ask me about per se but I find comes up a lot is risk management.
Juma: What I really like about my job is being asked questions that are not necessarily legal, so one of the big issues right now for us is succession planning. To have a say in how that succession is going to be is planned and how the transition will occur is a great experience.
And the second non-legal area where general counsel can play a role is with equity, diversity, inclusion and inclusion initiatives. Public companies are increasingly under the microscope when it comes to what you’re doing when it comes to gender diversity and pay equity. And I feel like institutional investors and clients are requesting companies to be doing more on that front.
Harnick: What I do, most often, is [be] there for the executives as a general adviser, a strategic adviser, a second set of eyes — being there so that people can bounce stuff off of me so I can perhaps give a different perspective or viewpoint than the other executives I work with who tend to more directly influence financial metrics. As general counsel, I think there’s a real expectation, and it’s what I love to do in my organization, which is providing a different viewpoint and a more enterprise-wide perspective on how something is going to affect us reputationally or in the long term.
InHouse: As a jack of all trades, how do you keep up with all the variety of issues, legal and otherwise?
Gokhale: This is probably one of the most challenging aspects of my role. And I think I had to very early on set the expectation of, “No, I don’t know, but I’m the best suited to figure it out.” It’s a little bit different in this industry because I know there is no subject matter expert, even if I were to go to external counsel, because the laws are new. Internationally, a lot of these markets are still at early stages of developing a legal cannabis regime. So, you’re not necessarily able to rely on the advice of external advisers. But I enjoy reading, I enjoy learning about new market opportunities, so it works well for myself. But it is quite challenging.
Forrest: For Canada Goose, we now sell in over 40 countries and regions. It turns you into a bit of a global legal risk manager as opposed to a local subject matter expert. That’s why I take on board either working with external or local counsel. It’s really important to facilitate your business or, in our case, really focus on tailoring the way we enter markets. We’ve been really successful at that so legal has to move along with the business and facilitate that, taking into account local legal needs.
Leung: I think it’s a losing battle; there’s no way I’m ever going to get caught up. Knowing where you can kind of get away with some risk and that you’re comfortable with taking on that risk. I always ask, what do you want the answer to be? What are you trying to do? And then, from there, you formulate a path that you’re comfortable with and where you need to actually do a lot more research, potentially bring in external counsel. Honestly, I do a lot of Googling nowadays.
Juma: I think the biggest issue for us is probably not knowing what we don’t know. It’s the fear of the unknown or missing something, especially when we’re working in different geographies and with different types of law. I think it’s important to have a keen interest, to work with business people and be very close to them to understand what their issues are and actively listen to what they’re saying. And then just having that gut feeling. Instead of doing what necessarily might be legal is doing what is right.
InHouse: What are some of the areas that pose the greatest challenge?
Forrest: There’s been some noise made around down and I’ve worked with the executives to make sure we’re very transparent about how we responsibly use down in our products. We’ve implemented things like traceability standards to help the public understand how we use our down and where it comes from and how we use it responsibly. I think that’s a good example of an interaction between certain legal concerns but also business and brand and that sort of thing. Certainly, I’m in a lot of those conversations.
Gokhale: For many people that are in a role similar to mine, it’s the capital markets side of things. As legal advisors, we do tend to lean toward the advising on risk or having to spot issues and advise on why we should not be doing certain things. But there is a shift, at least from my perspective, playing that role versus how do we figure out how to do this right. Being in that advisory role, you’re best suited to advise on the risks — risks are usually reasons to not do certain things — but kind of flipping it around to OK, well, this is a bit of a roadblock, but this is how we should be focusing on getting around it. Or this is how we should be focusing on being able to execute to bring certain initiatives to fruition. It’s really liberating when you switch roles and play on that side. But it is it is quite challenging in this industry, with the moving pieces of a relatively new regime product.
InHouse: What is your relationship with the executives in your company?
Harnick: I definitely feel like I have a seat at the table. I’m a member of the executive team . . . certainly not on the sidelines, just parachuting in when there’s an issue or a problem. I participate in the wins and losses of the corporation and the other executives to the same extent as everyone else, which I think is really important because people that own a line of business or have a particular role to play that, again, is directly linked to a financial metric [that] can sometimes look at more advisory roles, like a general counsel role, as not being as involved or as affected by the things that happen.
Juma: It takes some time to build that trust. As the first general counsel of an organization, they’re not necessarily aware of the legal function within an organization. So, it takes some time to explain to them what we do and how we can help and be an enabler instead of being the Department of No. It’s important to enter the role using a multi-faceted approach of not only being a good lawyer but also being a good counsellor. Sometimes, you feel like you’re a psychologist, having some good, strong business acumen, being a good leader, manager. And I think the last and most important thing is just having a good moral compass and making sure that you’re stewarding the company in the right direction.
Gokhale: I think the relationship should always be at a level of peers. But whether it’s a startup or as the company’s evolving, there are other executives that may have a different view and a different relationship with legal from their previous lives. So, there’s always that challenge that you have to deal with as your company is growing.
Leung: I would go actually a step further and say that, sometimes, relationships are very, very difficult. Because I think being the GC and being in the legal group is different from every other department in that part of my job is to know what’s going on in their departments. And part of my job is to stick my nose in and ask questions. Part of my job is to actually say, “I don’t think you should do it like that, why don’t we do it like this?” Whereas nobody in marketing is going to ask me and say, “I don’t think you’re doing your minute books right.” It’s always me sticking my nose in their business, and some people are receptive to it and others not always. I think it’s a very difficult job because nobody else has that role where it’s your job to check on others.
Forrest: I sit on the executive team. I meet with all the executives separately and so very much have a seat at the table both for near-term issues but also setting strategy for the campaign. I think that is important because it allows you to see what’s coming and to make minor shifts in the approach in order to avoid what might become speed bumps down the road.
InHouse: When you went in-house, what were your expectations, what were the company’s and how have those changed?
Forrest: When you’re the first lawyer hired into a company, especially a company like mine that was growing quite quickly, there’s a little bit of, “Oh, so now we need an in-house lawyer, what’s that going to be like? Is this really something we need?” There was a period of time we were building up trust and showing how you can help the business. Once you’ve done that, they start to see you as an asset, they start to see ways you can help make more effective decisions, you can save money and you build up the trust that way.
Leung: I am the second GC at Bluecat, which is great because there’s somebody out there to lay the foundation of what it is that I do. But this was my first GC role. And because we’re a little bit smaller, we’re a technology company, it’s got that fluid feel to it, there are a lot of executives there that didn’t really know how to interact with legal. And, so, I thought that was great, because it allowed me basically to write my own job description. I can do what I want. And, frankly, there’s more work than there is bandwidth, so I get to pick and choose and prioritize among all the different things.
Juma: We were around for 92 years, and they hadn’t had a lawyer at all, so I was trying to carve [out] my own niche. Actuaries are generally good risk managers. They were either doing things themselves or hiring external counsel or ignoring their problem completely. I thought, as my role, it’s important to come out there and roll up my sleeves and kind of elbow [in] and make sure I’m adding value from day one. And in retrospect, that was probably the wrong approach. I think it’s really important to manage change, especially when you’re brand new in a role and in an organization that’s been around for so long. If I were going to give advice to brand new general counsel, it’s to have an approach for day one, for day 30 and for day 90 and have a transition in place so you’re managing that change easily. What’s easy for some of us was probably a lot of low-hanging fruit. So, the ability to identify that need and capitalize on that to get your quick wins early on.
Harnick: Unlike everyone else here, I came into a fully baked legal department. I was not the first GC. So, there were some prescribed procedures and things as a public company that I knew that I had to do every quarter. And those were the first things on my list. The biggest surprise and the most pleasant surprise is that, as a general counsel, you have the ability to influence, so you might not make decisions for other people, but you can really influence how people think about a specific topic or the decision that they ultimately make. That’s one of the most rewarding parts.
InHouse: You all came from private practice. How does the change make you feel about your work every day?
Gokhale: I find the best lawyers that you work with are those that make their clients’ problems their problems; they’re just very invested in wanting to make sure that the clients’ problems are resolved. But I think the difference when you’re in this role is it really is your problem. It really is not your clients’ problem, it is your problem. And, so, I think that comes with a lot of reward and satisfaction, when you’re looking toward execution on something or resolving something.
Juma: It wasn’t until I landed this general counsel position that I have 100-per-cent job satisfaction. I think developing the skillset in our general counsel role, we’re privileged to see the complete viewpoint of the entire organization, and transactional lawyers see a little portion of it, a little snippet, and they get like a really sexy portion of the legal work. We’re in a really neat position to see the entire lifecycle of a product or service.
Leung: I liked finding out that I am very practical and very comfortable with risk. That’s something I didn’t know when I was in private practice because you don’t get to exercise that muscle. But I love being part of the company and knowing it so well. And knowing how it operates and how the people work. And what it is that you do that you can make snap decisions left, right and centre and be completely comfortable with them. I think that’s what makes us different from private practice lawyers. It’s a gift that not everybody has. I feel like in private practice I was just one of hundreds, whereas here I feel like I’m very unique.
Harnick: I definitely have a lot more ownership, skin in the game. I feel like I’m part of a team with a long-term vision, as opposed to my private practice, [which] was very transactional. So, you’d have that feeling but for a very finite period of time, whereas now I’m looking down the road not just three months ahead but what do we want to become? How can our core values help us get there? How can I help perpetuate those within the organization?
Forrest: I think back from our private practice days, there’s an instinct to when you’re asking your question, OK, better go write a memo and research that in depth. That’s not the expectation, in all cases, when you’re in-house. The business needs to move forward, so you take a prudent risk-based approach based on what the question is and advise based on your experience. That’s been a shift in the way I’ve advised since my private practice days.
InHouse: What’s your biggest victory, when you came through with great advice and maybe there were champagne and balloons?
Leung: You have to look for your victories every day, small, little things, things like when we were bought by private equity two years ago — a very large deal. For everything, there was at least six sets of lawyers because we had Canadian and U.S. lawyers on every call; private equity had a set, the company had a set, the founder had a set. And just little moments like when the CEO leans over, and he puts the phone call on mute, and he goes, “I don’t know how you keep this all straight.” Little things like that is just where my champagne and balloons come from. Because I think what we do very often is a little bit thankless.
Gokhale: I feel like every day there should be champagne and balloons, because every day as we continue on in business is a victory. Again, it’s only since 2017, where we had our licence to sell cannabis legally in Canada. In the course of a few years, [we were] able to launch a brand, to have commercial agreements with the provinces coast to coast and sell within [the] domestic market [and] have strategic alliances with international partners. As well as moving from the CSE to the TSX-B, now to the TSX and managing that relationship with the exchange and having some victory in being able to advocate for the cannabis industry and not having some of the restrictions that would have otherwise been a requirement for cannabis companies because it was a relatively new industry listing on the Canadian exchanges. From a victory perspective, I feel like it’s a daily occurrence that should be celebrated more.
Forrest: I was fortunate to be at Canada Goose when we IPO’d. Obviously, there’s a lot for legal do in that process, but [at] the same time, [I] had been in the company for three years at that point. So, I also went beyond some of the pure legal aspects and helped shape the story of the company in the documents. And you know, I was really proud to do so and consider that a victory. And it was a successful IPO. And, yeah, there were balloons and champagne afterwards.
Juma: You know, we’ve been around for a long time so, as a professional services firm — and lawyers can appreciate this — we have reams of paper. And we didn’t really have a records retention policy until I got there. The de facto position was keep. There’s things that probably should have been in museums. So, low-hanging fruit was instituting a records retention policy and then helping the business implement it, which I think was a bigger hurdle than actually developing the policy. To have that policy in place before we moved [in April] really helped cut down the amount of paper and saved the business a ton of money and really reduced our litigation exposure.
Harnick: I joined a real estate company and real estate is a pretty old and established industry, but joining a company that’s really old and established but takes a very forward-thinking approach and has been out ahead in terms of urban development and building neighbourhoods and being present in the major markets and cities, but particular neighbourhoods within those cities in Canada, has made my job super exciting. And I honestly just feel so grateful that this is where I landed and the team that I landed with.