This insight focuses on the role of an in-house lawyer in financial services for a firm operating in the UK.
Structure
Teams can be small, medium, or large, it depends on the size of the organisation. Where the teams are small, they may outsource complex technical issues to external counsel to provide expert legal opinion. Large teams will have lawyers that are specialist in a particular area and will have a law firm feel to the department.
Type of work
In my experience this has included almost everything you could imagine and even some unusual pieces of work however, financial services is a regulated industry so the risk appetite is more conservative and that determines the balance between commercial and regulation when making risk decisions, what is considered a priority and what is low risk that can be answered in guidance notes. These are the most common areas of law that the legal team will advise on:
Regulatory – the Financial Conduct Authority is the main regulatory body for financial services firms and sets rules that they should follow. This covers but is not limited to client money, vulnerable customers, and cybersecurity. Depending on the service that the firm offers there will be specific rules for example, lending money to individuals or limited companies which means complex regulatory legal advice is often something the legal team are heavily involved in.
Data Protection – the Information Commissioners Office regulates registered firms compliance with the UK data privacy regime. This will cover almost every area of the business operationally and since the implementation of the EU GDPR, policies and internal processes have been tightened in order to comply with the legislation that has potentially hefty sanctions for non-compliance. The firm will usually have hired a DPO to specifically deal with all data protection matters. Legal teams could be involved in updating policies, advising on the data protection risks of a new product or process, responding to DSAR’s or communicating directly with the ICO.
Commercial – reviewing and negotiating commercial contracts is very common, from suppliers that provide one-off services for the firm to professional services such as auditing. Each firm will have a different approach to commercial contracts and what they are prepared to accept when negotiating with third-party suppliers.
Corporate Governance – the board will regularly meet to make strategic decisions. For the legal team this means that usually one senior member of the legal team will also attend board meetings either as company secretary or as a director and in the run up to the board meeting, the legal team will be involved in preparing documents. In addition to this, the firm may also acquire other organisations and the legal team will be heavily involved in the work leading up to this.
Litigation – insurance claims to smaller supplier disputes, just as with any organisation, potential disputes can arise such as with their third-party suppliers, employment disputes, or landlord and tenant disputes and will in most cases involve hiring external counsel to represent them in court hearings. Some of you will ask why it is necessary to outsource to external lawyers when there is an in-house team of lawyers, but if the dispute is high risk, then having a law firm with a strong reputation and expert knowledge of the courts puts the firm in the best position.
Projects – coming up with new products usually kickstarts a project which includes a representative from each department to take part in discussions and explore potential issues. For the legal team this helps to ensure that any legal issues are dealt with before implementation or work with the project team to find alternatives to help the business continue to find ways to be innovative and competitive.
This is just a snapshot of the role of an in-house lawyer in financial services, it is actually a vast area requiring a huge skillset that is essential when dealing with all the different stakeholders within the firm from entry level to board level.