The right fit

AC: What is the current composition of the in-house team at Morgan Stanley?
BG: We have about forty lawyers across Asia Pacific, with about thirty of those in Hong Kong and ten in our offices in Mumbai, Singapore, Sydney and Seoul. In addition, we have various legal professionals and assistants plus secondees from time to time, so it feels like a small law firm.

AC: What is the nature of the relationship between Morgan Stanley’s in-house function and the business?
BG: Hopefully very close! We aim to work right beside the business units. Nonetheless, every lawyer in the team knows that the first client is ultimately Morgan Stanley, not the particular current head of the business unit or desk that the lawyer advises.

AC: What are some of the biggest obstacles faced in your role, and on a broader level by the in-house team?
BG: Getting the right mix of advisory versus execution work; and distinguishing legal risk, which the team advises on, from other risks which may be the domain of risk managers, Franchise Committees, Credit, etc.

AC: How has the in-house team responded to issues or challenges that have arisen for Morgan Stanley in recent years?
BG: Of course the GFC posed real challenges, but apart from that we have had to adapt to changes in the flow of work, product development and new markets. By way of example, one can look at the ebb and flow of M&A versus capital markets in last few years, or structured products versus plain vanilla products. Essentially, you need first class lawyers who are adaptable, bright and energetic, in order to navigate those changes without having to change the team too much.

AC: How is the value and cost of Morgan Stanley’s in-house team measured?
BG: The business units get internal allocations to cover Legal’s absorbed costs, just as they do for all the infrastructure groups, including tax, operations, credit, etc. I believe that we are regarded as value for the quality we deliver. But if a business unit doesn’t think so they will let us know.

AC: When hiring for your in-house team, which candidate qualities would be of most value?
BG: We look for people who are bright, keen, quick, team players, trustworthy, and who have a sense of humour. Really good people can adapt to anything.

AC: How often does Morgan Stanley seek the advice of external counsel, and in which circumstances?
BG: We use outside counsel for the right tasks – from specialist detailed advice in a new area to the execution of deals, and from 10b-5i opinions to regulatory responses. Sometimes we just want to check that our read on the key issues is right. We have a policy in place with all our preferred firms which asks quite a lot of them in terms of discounts, secondments, etc.

AC: In your opinion, what are the main challenges in managing relationships with external counsel?
BG: Removing or limiting equivocation; being fair to our external counsel; and helping them to see who the real or ultimate client is. Our main relationship law firms do this very well. AC