Legal ops moves to role of in-house quarterback

“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 there to dispense legal advice. We are now full business partners.”

What gets measured gets managed, as they say, and as part of the business world in-house departments need to become more business focused on how their own functions perform. That’s why it’s important to have some someone such as Stewart on staff to manage the law firm that is legal and compliance group internally at BMO.

Stewart is deputy general counsel and chief operating officer, with the legal, corporate and compliance group at BMO Financial Group, now based in Toronto, a role he started formally 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 practising law in a business context.”

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, which will now be rolling out to Europe as well. He was most recently associate general counsel, U.K. & 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 chief operating officer for legal and compliance for about 10 years under [EVP GC Simon Fish] Simon’s vision and stewardship — he instituted the office of the COO 10 years ago, so this isn’t new for BMO and it’s great to be part of that great tradition,” he says.  “My role is to manage the day-to-day and strategic aspects of the big internal legal and compliance firm that is BMO legal and compliance.”

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 of the silos of all the different line 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. In the grand scheme of things, Stewart says he helps develop and implement the strategy for legal and compliance within BMO.

“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 clogged drain in the afternoon and how to reduce cost in the Legal Excellence Program later in the day,” he says.

“I am also the person here for anyone’s issues they feel need to get escalated and I also deal with a lot of the HR employee relations issues that come out of having 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 Legal Excellence Program 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 just the legal department’s internal business clients.

“My role here is the same as everyone else here at BMO and that’s to think like the customer and 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 the fact 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 skillset 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 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 Legal Excellence Program.”

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 in a vaucum 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. We are saying partner with us and come and listen to what our businesses have to say and we will help you become more successful because we will all be aligned with this.”

Last month, BMO held its first Legal Excellence Program’s law firm summit in which it invited law firms that are part of BMO’s established panel to come for a day to listen to the senior leaders in business 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 and what’s been encouraging is 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 one of its kind to be organized,” says Stewart.

A number of U.K. 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 “more value add and more visible.”

“The law firms have embraced it and acknowledged 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 on to one joined billing mandate —  “nose to tail” — as Stewart explains it, using the bank’s TyMetrix 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 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.

So, will the future legal department decision-makers be the chief operating officers?

“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 we in the COO role can overlay the strategy and get to the customer experience that helps law firms achieve even greater things.”