When Mark Pasko became general counsel of business unit support at QBE North America, he was looking forward to taking on a comprehensive role within the company. His previous responsibilities at AIG had a global reach, but had also been siloed within tightly defined specialties.
He discovered that the company’s legal support—provided by a staff of three—was stretched thin across the enterprise. Advice was provided on an ad hoc basis as issues were presented to the team, which prevented them from developing constructive, proactive relationships with their clients.
“We had a few lawyers covering eight or nine different areas, which didn’t allow for developing expertise in any of them,” Pasko explains.
Even after he hired additional staff—there are now seven lawyers and a consumer complaints analyst in the department—their focus was still not as structured as Pasko wanted. That point was driven home when he realized that four different individuals were handling commercial insurance issues for the Property & Casualty group. The president of the group pointed out that she needed to know whom she could call with specific strategic issues and who was accountable for follow-up questions.
Working in partnership with chief legal officer Jose Ramon Gonzalez, who had also come from AIG, Pasko decided to create a highly structured platform that would embed attorneys within specific business units. This would allow them to become specialists in the units’ issues and priorities while enabling them to be involved at the beginning of important discussions, projects, and decision-making.
“Instead of doing a little bit of everything, we needed to build strong, collaborative relationships with our clients and work affirmatively to share their concerns and develop solutions,” Pasko says. “Embedding legal staff and aligning with the business fit QBE’s broader strategy and helped create a unified team to solve problems in a holistic manner.”
The first step was creating structural alignment by embedding lawyers in the business units’ day-to-day activities. For each segment within the Property & Casualty and Specialty groups, Pasko has established a senior lawyer with direct expertise and a second attorney with complementary skills. So, a more experienced lawyer in property and casualty might be supported by another with a strong litigation or claims background.
This also enables the legal team to support other areas of the organization, such as loss control, field operations, and claims. The lawyers become intimately familiar with daily issues and priorities by proactively attending client meetings and associated conferences, not waiting for potential problems that need legal support.
“Being embedded allows us to develop relationships, learn the issues and the industry, and become more effective at spotting issues,” Pasko explains. “Clients know who their lawyers are, and we can proactively execute strategic projects and products and help to make them more successful.”
In one particularly beneficial application of the practice, Pasko worked with QBE’s commercial insurance group to establish Arrowhead General Insurance Agency Inc. as the program administrator of QBE’s small commercial insurance business. Because of his relationship with the group, he was able to efficiently frame the deal within six months. He also coordinated legal input from QBE’s real estate, human resources, procurement, regulatory, and litigation groups to address affiliated details that were critical to the transaction’s success. The approach helped reduce outside counsel spend by up to 25 percent in what was one of the company’s largest strategic initiatives in 2017.
“Since I was embedded, I already knew the business and exactly what the unit was trying to achieve,” Pasko says. “I knew the best way to give them a more informed and successful outcome.”
With the intimate knowledge that comes from structural alignment, legal teams are able to create strategic alignment by making the business units’ priorities their own priorities. That comes from constant communication and ongoing awareness of daily issues. It also means effectively executing activities to support the resulting objectives.
The legal teams are also able to recommend appropriate options if a particular plan turns out to carry unforeseen risks. “There should be few occasions where we have to say no in our world,” Pasko says. “We should have enough insight and expertise to offer reasonable alternatives or to have a collaborative discussion to find a more suitable route to the objective.”
Pasko realizes his team is not always the ultimate legal authority and must often serve as the gatekeepers to additional, more specialized resources—just as he was in the Arrowhead transaction. In that scenario, he acted as the expert on his client’s business and recognized when he was entering new territory that required input from other specialists.
To help support that “community of experts,” Gonzalez has created an environment in which the company’s in-house legal staff meets regularly to share current projects and priorities as well as recent successes. This is the case for his direct reports—who gather every three weeks—as well as more junior staff, who meet monthly.
“Getting together regularly does more than just build connections and share best practices,” Pasko says. “We get to know who has expertise in what areas and where to turn to when we need outside assistance.”
To assist in delivering appropriate services, Pasko’s team has distributed lists of the top thirty legal issues or questions business units should be bringing to their lawyers. Beyond the usual confidentiality agreements and reviewing marketing materials, the list includes any issue that needs to be documented, such as regulatory compliance, financial documents, and instruments supporting underwriting policies.
In addition to the general response, “I didn’t know you guys did that,” the lists have resulted in a broader spectrum of issues coming to the legal team. That, in turn, has given them more tangible opportunities to bring value to the business.
“By having concrete strategies in place, the legal team can provide a function that doesn’t just enable business units to grow,” Pasko says. “They enable us to grow along with them.”
Photo: Eddie Mostert