An interview with Paul Donovan, Canopius - Responding to change: aligning the legal team with the business

Paul Donovan, Head of Legal at Canopius, the largest privately held underwriting business operating at Lloyd’s of London and the world’s leading specialist insurance and reinsurance market, speaks to Sophie Gould, Head of LexisPSL, about his experience of reorganising and developing the legal team to align closer to the business "to show that we give the business more than law: we give it commercial advice."

Tell us a little bit about your background and your team.

I started my career in a professional company secretarial practice. To go further in the field I thought you needed either an accounting or a legal qualification. So, as I'd always had an interest in law, I decided to go down the lawyer route and spent several years (while working) getting the GDL, as it was then, followed by the BVC. I was called to the Bar before moving in-house with an international food franchising company.

Moving to Canopius was a very steep learning curve, but I relished the challenge. I've held other positions at Canopius, but have been head of legal for just over two years. Alongside me there is a legal associate and a legal assistant, and we've just taken on a legal administrator. It's a very lean team, but that's great because it offers plenty of opportunities for the team to get exposure throughout the business. We also have a large informal panel of external legal advisors with different specialisms as the business has so many different needs.

As well as business as usual, which includes contract review and legal risk mitigation, the group's and therefore the team's, main focus over the past four years has been mergers and acquisitions. We're private equity backed and always have lots of projects. I would say that working here is exhilarating and exhausting in equal measure. It keeps it interesting and has helped the team demonstrate what we can achieve with and for the organisation.

What was the reason behind reorganising and developing the legal team?

When our current group chief executive officer, Inga Beale, joined us, she articulated some clear vision and value statements as to what the organisation should deliver. As a result of this, other departments within Canopius began to change, and so there was an opportunity to review the legal team. As a department, the legal team has focused heavily on transactions. This means we hadn't done as much as we'd have liked in relation to servicing customers in a standardised way and providing relevant management information, as an important function within the business. I decided that I wanted to articulate a clear vision for the department to include what it is I'm trying to achieve and why. This would help to demonstrate that the legal department is aligned with the rest of the business. It was an opportunity to show just what the legal team can do to support the business across the group.

"...to show that we give the business more than law: we give it commercial advice"

What first steps did you take to put your plan into action?

I started producing a number of documents, so that I could get it clear in my mind what I was trying to achieve. I wanted to demonstrate service excellence and that we work well together with other functions, such as Underwriting, Operations, IT and Finance. I wanted to show that we give the business more than law: we give it commercial advice. We always have done, but we've not articulated it or promoted ourselves in the past. It was a great opportunity to wrap it all together and set the vision and the objectives for me and the team so they aligned with the business. By the end of 2013, it will have been a transformational year for the department.

The senior leadership team at Canopius already understands the value that Legal add, so the process is not about justification. The process is about acknowledging that the rest of the business is implementing the new vision. Therefore, we should be demonstrating we embrace this and can grow and change with the organisation. It gives life to the ambitions the business has been articulating.

I've learnt a lot about the business, and got closer to it, during this process. Some of the ideas for 2013 have naturally moved into 2014 as it takes time to socialise the ideas and get buy-in from other departments as well as laying the foundations for broader changes.

How did you get buy-in from colleagues in other departments?

It's about finding the lever to pull, what turns the other department on. For Finance, it's the idea of a legal panel because it could save the business money. Obviously, these things take time. We don't have a large team in Group Legal so we mustn't over promise and then underdeliver. It's about picking things that we think we can achieve. It's about asking how this helps. What is it going to deliver to the organisation? Is it worth doing? Who are the people that will benefit? Then, it's about approaching them and selling them the idea. It's a sales pitch in a way. If there's no benefit, there's no commercial point in doing it.

The legal panel is a good example. It's taken a period of time for me to persuade colleagues what the win will be. We had to find common objectives with other departments. I had the idea that if we did a group panel we could include Legal, Claims and HR because all these functions buy legal services. If we put ourselves together, we've increased our buying power, which then increases the opportunity for efficiencies and savings. It also breaks down silos. Conversely, for the panel members, it's about a more effective partnership, greater opportunities to advise other departments they might not have previously been able to access, it's not just about saving costs. That went down very well. It's been really worthwhile having all of these conversations. The idea has developed and evolved, which now means that we can put the panel in place next year knowing that it's not just a panel for Group Legal, it's a panel for the whole organisation.

How have you implemented the changes?

The changes had to be formalised. The timetable coincided nicely with the team's objective setting. This required me to sell the changes to the team, to get their buy-in and make sure the ideas would work. The team reacted positively to the vision and direction setting and took ownership of parts of it.

Part of the vision was articulating what it is we do. When the business asks "What do Group Legal do?", the answer should be: help the business grow; keep the business out of trouble; manage group/non-standard dispute resolution and litigation; partner with other functions to create solutions; and meet our own commitments as a function, which includes development of talent, budget tracking/planning and managing external legal advisers. To implement the vision we needed to move from a reactive stance to a proactive one.

Implementation of the vision was not about creating lots of processes, but I realised that we did actually need some processes in place. The first major task was streamlining those that existed, namely our work/task list management. It's been a large exercise that's needed the buy-in of IT. We've integrated Sharepoint into our task manager in Outlook so that Sharepoint now contains a list and details of all tasks so we can, put simply, see when tasks came in and who they came from as well as produce many other useful detailed metrics.

This was an important first stage as we needed metrics in order to design parameters for, then implement, KPIs, SLAs and KRIs. It's not about numbers for numbers' sake: we designed the system around what we want to be able to communicate to people. For example, to track the type of work we receive, we introduced a 1 to 4, A to D rating on every piece of work according to its perceived value and resource need. Level 1 involves tasks with the greatest strategic value to the business. Tasks in level 4, while essential, are felt to be bread and butter work. By looking at a task's rating you can tell its importance or urgency and how long the piece of work is predicted to take (the A-D rating).

This analysis of tasks allowed us to develop and report on key risk indicators. The KRIs included indicators such as: volume of in-house legal work; volume of work categorised as urgent/important; volume of outsourced work; number of major projects; and number of disputes. To create these indicators, I thought hard about what would tell us that something is about to go wrong. It's important to be alert to risk before the events actually happen.

"To implement the vision we needed to move from a reactive stance to a proactive one"

What we ended up with is a threefold process: the task/worklist, the underlying metrics, and then the KRI reporting matrix. The end result is not just something that sits in isolation: we review it each week in our team meeting, it allows us to say, for example, whether we are outsourcing too much/not enough or are trying to do too much internally.

It became clear that KPIs and service standards are interlinked and so the latter had to follow once we had the metrics in place. The service standards are in development and, again, it's about what do other departments want from us - there's no point producing KPIs and service standards in isolation. Once we know clearly what is required, we need to deliver that in the best way possible utilising internal and external resources.

"It has been about maintaining and increasing the influence of the legal department in a changing organisation and demonstrating the value we add."

The next phase we will implement involves communication. We are planning a series of internal articles/case studies detailing which departments we have helped, how we helped them and what the benefit was. Ideally, we will plan out six months to a year's worth of content to go out at regular intervals to keep the message alive and there.

Thinking about communication has also generated a new workstream on tone of voice when I or members of the team send emails. The advice should be delivered in the same way no matter who you go to. We've created templates to start this process. The templates dovetail with the SLAs because we want to respond within a certain period of time. We also worked hard on our internal website as we wanted it to look and feel the same as the other communications that will come from the department. Communication should always be two-way, so part of the communications plan is to have an online survey asking other departments about their experience of the legal department. This will generate positive ideas for the future.

What has been the overall outcome of the process so far?

I think it has achieved alignment with the rest of the organisation in a demonstrable way. It has been about maintaining and increasing the influence of the legal department in a changing organisation and demonstrating the value we add. If people know that we're here, what we're here for and what we can give them, then they're more likely to use/include us. That's better for the business as a whole because it decreases legal risk. It also gives the legal team the opportunity to do really interesting things and actually feel like they're making a commercial difference.

To date, we've delivered more than was expected. And we've done it in an innovative way.

And finally, what lessons have you learnt?

In a perfect world, I'd have created a detailed meticulous plan and socialised all the ideas in advance. We'd also have achieved everything in 2013. But the world isn't perfect and business as usual, or indeed, special projects, sometimes get in the way. The timing will never be completely right and it's a lot of work but you've just got to go for it and not worry too much about structure: the business will see that you've got a vision. And, no, you won't get everything right first time! Lawyers are always easy targets in terms of thinking too much about something. What I've learnt from this process is that we can make decisions, innovate and change and we can get the decision making right!


 

About Paul Donovan

Canopius is the largest privately held underwriting business operating at Lloyd’s of London, the world’s leading specialist insurance and reinsurance market. As Head of Legal, Paul has been responsible for the delivery of all M&A activity over the last 4 years and manages the Group Legal function (4 people) and the panel of external legal advisers who together service the commercial/corporate and group litigation needs of the Canopius Group. Paul is the authority for Data Protection, Anti-Bribery, legal risk mitigation and corporate insurance.

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