Helen Mooney finds out what a group of major international institutions have to teach an Australian banking giant about best practice

"The idea first came about from the relationship the bank has with IBM, which provides significant IT and system support to us. In the course of setting up things with them we had a discussion with their general counsel about trying to get a better understanding of how their legal function operates and it went from there," Justin Moses explains.

Moses, corporate counsel and general manager of the legal product and distribution department at the Australian banking group Westpac, is referring to an innovative series of what the company calls "benchmarking study tours" it has carried out in recent years. The bank's legal team has been visiting international companies in the US and UK to learn from other in-house counsel how they conduct their legal counsel functions and what ideas and structures the banking group can replicate back in Australia and New Zealand.

Having visited companies including IBM, Morgan Stanley and JP Morgan last year, Moses led a team of four lawyers drawn from Westpac's institutional banking, corporate, insurance and dispute resolution practice groups to the UK in May this year to meet in-house lawyers from a range of UK companies.

flying-businessmenA unique opportunity

He says that while each of the participants in the study already possesses very strong technical skills in their area of legal practice, based on a mix of both private practice and in-house experience the tour is regarded as an opportunity to further develop their strategic practice management capability.

"As part of our junior lawyers' succession path it important for them to be exposed to this kind of thinking and these types of functions so when they become general counsel themselves 
they are not left floundering," Moses explains.

The idea for the benchmarking study was also born out of the fact that the banking group felt that they had "exhausted" the local Australasian market in terms of sharing insights, ideas and best practice with the in-house counsel of other local companies. "In recent years our lawyers and general counsel have participated in forums and round tables for lawyers and bankers but we wanted to shift our focus out of organised groups – we wanted to establish contacts in different parts of the world and discover processes and initiatives that we could learn from," he says.

One of the companies involved in the Westpac UK benchmarking study this year was Misys, a software company providing IT solutions to the banking industry. Tom Kilroy, Misys general counsel and company secretary, says that he was "extremely intrigued" by what Westpac was doing.

"The legal challenges faced by organisations like ours are often shared and although you will have a number of discussions with other general counsel it is not in the same systematic approach as Westpac has done in terms of going to different companies in the UK and US," he explains.

HP UK general counsel James Ormrod agrees. Ormrod was introduced to Westpac by the O1O Group, which helped organise the bank's UK tour. "It was very helpful to talk to people in another legal departments who have the same nuts and bolts challenges as us and to discuss the scale and complexity of the legal function in a large company," he says.

He also praises Westpac for bringing younger lawyers on the tour. "If you want people to act internationally you also need to give them development opportunities and broaden their horizons… this will help develop the leaders that you want to drive the strategic view and function of the business rather than them just dealing with the day to day," he adds.

Moses says that the fact-finding mission showed that the there was differences in behaviour between the way Westpac counsel were working compared with other general counsel in US and UK organisations. "There is a big difference in the use of external panels in the UK and US compared to Australia. In the UK major clients are a lot more demanding of their panels – many of the people we talked to benefit from rolling secondment support from their firms even though they have a similar size of legal spend to us and we were surprised by how much extra capacity firms provide to their clients," he explains.

"I think there is a shift in mindset [in terms of the relationship between law firms and their clients] in the UK and US in terms of value adds that has not happened in Australia," he continues.

Westpac is hopeful that the tour will also help to establish an informal network of general counsel and legal departments across a range of international companies in future. Although the bank has yet to officially decide where to take its tour, Moses believes the "logical step" would be to meet with companies in the Asia-Pacific region, especially Hong Kong, in 2012.