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Relationship effectiveness

Small in-house departments such as those headed up by Jonathan Boulakia of Chartwell Retirement Residence prefer to oversee the management of files and control cost through relationships.
|Written By Jennifer Brown
Relationship effectiveness

Amid the hype and ongoing dialogue around the future of law and innovation in the legal profession, the reality is many small law departments in Canada still feel effective legal advice and suitable fee arrangements come not from new service delivery models but through good management and long-term cultivation of relationships with external counsel.

Such is the case with Jonathan Boulakia, chief legal officer of Chartwell Retirement Residences, based in Mississauga, Ont. When it comes to managing his legal department, Boulakia aims to maintain and strengthen a streamlined way to get work done that is relationship based and with good reporting. He finds that with the two primary law firms to which he sends work for corporate work and the company’s real estate transaction work in Quebec.

Internally, his in-house lawyers in Mississauga support operations and human resources, and a lawyer in the company’s Montreal office handles all Quebec matters.

“We’re a real estate company, but really we are an operating company — so for every retirement home we buy or sell, it is like buying or selling a whole business,” says Boulakia.

Like many in-house counsel these days, Boulakia is regularly approached by third-party vendors with solutions to aid in the management of legal department operations. But he says he prefers to stay on top of the matters he has at hand himself to ensure the most effective representation of the company’s needs.

“I get calls from third-party organization intended to help me track fees and it’s never been of much interest because my job is to make sure I am on top of these files, and whatever tools I can get from law firms is helpful, but I haven’t explored any third-party tools,” he says.

“Part of it might be that we’re not big enough to be interested in these solutions. If I had 100 lawyers like some banks do, maybe then the general counsel does need those tools to keep on top of files. I have good relationships with all the lawyers who work with me, as do all the people who work with me.”

In several ways, Boulakia leverages long-time relationships with his external firms to make things run smoothly, especially in the company’s high-demand communities. Quebec is a booming market for retirement residences where seniors are moving to those kinds of homes in large numbers.

“The penetration of seniors living in retirement homes in Quebec is about three times higher as Ontario or the rest of Canada,” he says. “It’s a really complex business. Our customers live with us and we give them health care and hospitality services and feed them. On the legal front, there is definitely real estate work and most of the real estate transaction work is done by outside counsel and managed by us, but the heavy lifting is done by outside counsel.”

Chartwell also has 14,000 employees, there are human resources files, too, and landlord tenant type work as well as dealing with the board of directors. The company uses Stikeman Elliott LLP for real estate transaction work in the province of Quebec and has done so for nine years. Its external corporate counsel is Osler Hoskin & Harcourt LLP for corporate securities work and real estate work outside of Quebec.

Involved in strategy

As part of his own legal management style, Boulakia believes strongly that it is important for the legal department to be involved at the executive management table to ensure his team is aligned with the common goals of business.

“We have a pretty buttoned-down strategic planning process in the company in that every department does its own strategic planning and then we all meet together to make sure it is aligned to a common strategic plan,” he says.

“My legal department does meet and set strategic goals for the department and then we tie them to the corporate goals,” he says.

That includes looking at how the team works with external counsel around the legal budget and what law firms are charging for fees.

“The strategy is driven by the business, so the business strategy may be to do ‘XYZ’ and the legal strategy is how do we facilitate that and help that happen. Then there is the execution of that strategy. We look at who our outside representation is and can we be working more efficiently with them? The efficiency piece is more of an operational discussion than a strategic discussion,” he says.

Boulakia also has oversight of risk management in the organization and it’s something legal identifies and puts strategies in place to mitigate those risks.

If the legislation landscape for the sector is changing or if the litigation landscape is changing, the team might strategize as to how to approach the changes and how to avoid risk.

“When it comes to outside counsel, it’s about understanding our appetite for risk and understanding that is woven into our agreements when we do transactions. It’s not a day-to-day kind of conversation with anyone on the outside but about them knowing us well enough to understand what our appetite for risk is,” he says.

When it comes to identifying what he appreciates in service from outside counsel, Boulakia is quick to point to a quarterly report he receives from Osler — its general counsel report — a dashboard of various data points that are of interest to him. “I tailor it to what I am interested in such as who is working on our files and what is the average rate of the person working on the file and what the ratio is between senior lawyer, mid-level lawyer and law clerk working on our files. You get a feel for how efficiently or not you are being handled. You can also ask to see the mix of staffing of men and women on your file — it’s something they track, and you can see [it] in the report,” he says.

A dashboard like that is something he can take to the senior executive team on a quarterly basis, so they get a feel for the legal department’s use of external counsel. It also breaks out whether anything is being done on a fee arrangement or percentage on fee arrangements or an hourly rate.

“They don’t want to see the minutiae — executives want to know what the exposure is on certain things and how much time are we spending on customer-facing issues or transactions,” he says.

“I like to have a strong relationship with the lawyers who work with me, so they are just keeping you up to date in real time, so nothing escapes you — it’s very easy when on a big transaction for your outside counsel to go in a direction you wouldn’t necessarily want them to,” he says. “Sure, you could address that by getting regular reporting, but I think what’s more important is to have a good relationship and know each other’s needs and predict the kind of things that the other person would want done.”

At the end of the day, Boulakia believes the best way to manage cost is through relationships.

“I’ve tried with fee arrangements on a number of files and it’s really hard because by definition someone is going to lose in the arrangement — either the law firm or the client. Who is going to take the risk? Either you’re overpaying because the law firm fixed their fee at the right amount or the law firm is losing money because they didn’t. Fee arrangements are great if you can work it out, but transactions never go as you plan them to and they often get revisited because something has gone sideways. The best thing is to trust the people you work with and stay on top of them to make sure the work is done the way you want it to be done and to work with people who are efficient and good.”