Derek Walsh is group general counsel and broker relationship director of UK-based global insurer RSA. He leads the team that won The Legal 500 UK “Team of the Year” award for the insurance field.
B U S I N E S S T H I N K I N G
EDITOR AND FEATURES WRITER
GC: Did you always want to be a lawyer?
No, I forget why I wanted to be a lawyer! I say to my friends that I wanted to become a lawyer to make the world a better place… That always gets the reaction it deserves.
I didn’t know what I wanted to do at school - I was brought up in a rural farming community and I did a degree in law. At that time, that gave you the most flexibility in terms of the career you could pursue. Having started law I got caught in a process, because at the end of your first year law firms come and talk to you about joining on a training contract. The next thing I knew, I ended up being spat out as a lawyer.
GC: You went into private practice first of all, didn’t you?
Yes I trained and qualified at Norton Rose.
GC: What was it that made you go in-house?
I didn’t design it that way. I don’t think I’ve applied for a job since I was 19 years old when I applied for my training contract and I’ve had about five jobs since that time, all gained either through contacts or people I’ve known. The older and more senior you get, the more that is the case. It’s not dissimilar to how I ended up in-house.
I’d set up a pretty good practice in insurance with Martin Membery at Pinsents [Martin is now at Sidley Austin LLP]. We’d done a good job setting up a more specialist insurance practice. I had a client at that time called Benfield, which was a big client of mine. Although at the time it was quite a small company, it was gearing up for quite seismic changes – in particular to buy a US-listed company. This was very counter-cultural at the time, a private UK company buying a US-listed company. Benfield asked me to join on secondment to help them through what turned out to be a lot of corporate transactions, which it wanted to do in a short period of time. So I went there and I knew very quickly that I was never going to go back because the skills and requirements that you needed in that role (as opposed to a pure private practice role) lent themselves more to the skills that I like to think I have. I really enjoyed it. It was a lot more commercial, a lot more hands on and more transaction-based. What really appealed was being part of something, as opposed to advising on something externally. So, even though I never planned to go in-house, I guess in some sense I had a five month interview via the secondment. When I was asked to stay on a permanent basis, I knew Benfield was thinking about an initial public offering and that it had lots of plans and it suited us both perfectly that I would join as the General Counsel.
GC: At that time were you Benfield’s first permanent in-house counsel?
No, it had a reasonably big team comprising a general counsel and around 10 lawyers. If you look back at that era, it was a time when the whole nomenclature of general counsels was becoming more standard. Prior to that you had heads of legal within businesses largely advising on legal matters. But, at that time, businesses were morphing and general counsels were being appointed as people who weren’t just heads of legal - they ran the company secretarial function (and became Company Secretary), they ran compliance, and in some instances they picked up other aspects. I joined a business that was building itself to prepare for an initial public offering, initially the aim was in New York but it ended up listing in London in 2003. So at Benfield, the role of the general counsel and the wide range of skills required at that employer was built into the very fabric of its business. The General Counsel role was on the executive, it was a key member of the team. I was fairly junior at that stage of my professional career to get a role like that. It was just right time, right place, perfect timing and the right opportunity for me.
GC: How did you end up at RSA?
In 2004, RSA was looking for a general counsel and I was approached at that time. I met a number of people in the company but decided to take myself out of the process because I felt it wasn’t the right role for me at the time. I felt quite sad because I’d always had a fondness towards RSA – it was one of the biggest listed general insurers in the market, a FTSE 100 company with a great heritage. Having turned it down, I thought I’d parted company with RSA forever. So for me to be approached again in 2010 to join RSA was kind of completing a journey for me.
GC: What is the best thing about working at RSA?
It’s a really big company with a tremendous amount of heritage - when I joined the company was celebrating its 300 year anniversary. There’s an immense fondness towards RSA among our key stakeholders. There’s a real credibility and it’s nice to be part of that. But equally, probably the best thing for me is the opportunity to extend oneself. I perform the traditional role of general counsel, doing legal compliance and company secretarial, but since Stephen Hester, our Chief Executive, joined, other members of the executive team have been given additional opportunities. I’ve been the beneficiary of that - I now run our broker relationships on a global basis, which covers about 20 per cent of our revenue. That’s given me a fantastic opportunity to stand outside the traditional general counsel role, and it’s great for business that RSA wants to excite its executives and have them performing at a wider level.
GC: What’s your favourite bit of the job?
I don’t have a typical day. I do what’s going on. I could spend the whole day doing company secretarial work, for example, on a day where we have board meetings and board committee meetings; I could spend all day working on compliance material if we have regulatory visits or if we’re subject to particular questions from a regulator; I could spend all day on my new broker relationships, when we have marketing events or if there’s a transaction. So there’s no typical day for me. I try and spend about 25% on each of those big buckets of responsibility I cover but in reality I never spend exactly that amount of time on any day.
My favourite part of the day is the first half an hour to an hour, when it’s quiet. I can read emails without being disrupted and get a bit of perspective before all of the chaos happens during the day. Don’t get me wrong, I really enjoy the variety, the challenges and the need to be flexible during the day, but sometimes it’s nice to have an hour when you can just reflect on the tasks to be achieved.
On a personal level, I really enjoy the opportunities RSA gives people. It’s an ethical company that believes in promoting the best people that it can. My own leadership team is made up of over two thirds female – that’s not by me planning my team that way, but I have always sought to recruit the best people for the roles. That’s very much built into the ethos of RSA. It doesn’t matter where you’re from or who you are, if you’re good enough you’ll succeed here and I think that’s great.
GC: It’s interesting that you say your favourite part of the day is the calm part when you are able to go over your emails. A lot of people say that their least favourite part of the working day is personal admin. Do you have a least favourite part of the day?
There’s loads of things you can point to that you don’t enjoy doing and yes, admin may be one. But we’re lawyers, we’re disciplined, that’s part and parcel of our make-up. It’s much better now than it was in private practice where there’s a lot of client admin. The bits I don’t like, particularly in-house as opposed to when I was in private practice, are when you spend a lot of time in meetings where you don’t need to be in the meeting. Wasted time for me is my least favourite aspect of the day.
GC: Do you have a professional highlight of your career so far?
I’d say there have been many. At times you define yourself by corporate achievements because they’re something to hang your hat on. But for me there are two things. One is when we floated Benfield on the Stock Exchange in 2003. We took a tiny private company and we created a respected and well-known public company. In some respects it was the best and happiest, but also the saddest, day of my time at Benfield. Best, because it was a crystallisation of a lot of the expectations of the company and the reward for certain key individuals who had given their life for that business. It was sad because all of a sudden you didn’t know who owned the company - on the previous day you knew all the shareholders well, and then you don’t.
On a more non-specific basis, I’ve always tried to promote and support the people who work for me, and seeing people come through, get promoted and developed and move onto the next stage is something I really, really care about and that excites me. My deputy at Benfield is now general counsel of another insurance company listed in the US and the CEO of one of their businesses, and seeing him come through and thinking that I might in some small way have played a part in his career makes me feel great. Others who have worked for me at RSA are now also general counsels at public companies.
GC: What sorts of legal issues or challenges are you going to be focusing on in the next few months at RSA?
We had a really big 2014. We started in 2013 without a permanent CEO, we had some capital challenges as well as some other business challenges, and we ended 2014 in a very different place. We’ve got a new CEO (Stephen Hester), we did a rights issue, we sold some of our non-core assets around the world, so it’s been tremendously busy. From my team’s point of view it has been a really demanding but fulfilling year. We’re all looking forward to a 2015 which is hopefully a bit more normalised. But on my list of things that I will be talking to my team about is the whole issue of data and big data - making sure that we abide by critical compliance issues like sanctions, KYC policies [“know your customer”] processes used by businesses to identify their customers and competition. Those are the areas that any corporate should be focusing on.
GC: Do you tend to keep most of the legal work in-house?
My personal philosophy is that we will recruit good quality teams within the legal, compliance and company secretary functions. So the mentality is that we don’t want to recruit people who will act as post boxes. We want to recruit lawyers who can actively do the work. My ethos is we will seek to do most of the work in-house because we’ve got the quality of people who can and want to do it. So that’s a starting point. However, there are times where you can’t afford to fully manage certain specialisations in-house like banking, the ability to do rights issue for example. In those scenarios you would go externally and buy in specialist legal advice. We have two panels - a main central corporate panel for big ticket work such as M&A and capital raisings, and a secondary panel for the more general commercial and corporate work, such as smaller transactional work. 2014 has been a very busy year for our major corporate panel - we’ve been raising capital and we’ve done major asset sales - but in a general year we would be fairly modest with the amount we send externally.
GC: What qualities do you expect an ideal external lawyer to bring to the table?
It’s a really challenging question. What I say to all our corporate lawyers when they ask that question is that we want somebody who really cares about our business and somebody who’s prepared to share our fortunes. This comes to the whole debate around how lawyers are paid for services and with hourly rate - you know - lawyers get paid whatever happens. We want firms who really understands what we do, who really wants to help us, and if things go badly for us will share that burden, and if things go well for us will be rewarded well when they’re doing work for us. My challenge to all the lawyers who work for us is: how do they charge their services to us so it reflects that ethos?
I think the hourly rate is a good proxy as it’s a good guide to the amount of time that has been spent working on the business. However, I think that there should be a more sophisticated way of judging the value that external law firms deliver to their clients.
GC: What do you enjoy doing in your free time? Do you enjoy reading?
I’ve got a book on my desk actually now, I’m reading Stieg Larssen’s The Girl Who Kicked the Hornet’s Nest which is the third book in his trilogy. Reading is a big passion of mine.
I’ve got three small children – six, three and two – and therefore that consumes a lot of my private time. I certainly spend more time running their lives than I do thinking about my own, but that’s something that I do happily and with pleasure.
I’m a keen skier, I like playing golf and I support Manchester City football club - which traditionally was a lonely pursuit, but today is certainly more fashionable.
GC: Do you have a favourite film?
It’s an odd one really and stems from my childhood: Doctor Zhivago. So that probably shows my age, right? It’s the first film I remember having a real emotional attachment to.
GC: If you weren’t practising law, what would you be doing instead?
Growing up in a rural community in North Yorkshire meant that I wasn’t really taught about the careers you could have if you came to the City. I did a general law degree and then ended up in the insurance industry, so that was a route for me to come here - I wouldn’t have known about careers like euro bond trading or investment banking or anything of that nature.I enjoy the diversity I have in my current role, looking at the global brokers which has more emphasis on the sales and relationships side. I don’t know if I’d succeed in a career purely focussed on that area but I really enjoy it. I guess if I could have my time again, I might look into something in that space. But being a Lawyer has served me well and I have no complaints about my career to date.
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