Michelle Terry, General Counsel and Senior Vice President at $1 billion-asset First Arkansas Bank & Trust in Jacksonville, Ark. Indeed, banks with in-house counsel also tend to be more proactive when it comes to potential legal matters. “If you have to call outside counsel and get billed in 15-minute increments, you might not call,” Messer says. Aaron M. Kaslow, Executive Vice President, Chief Administrative Officer and General Counsel for $14 billion asset Sandy Spring Bank in Olney, Md., agrees. “When you’re not paying by the hour, you feel more comfortable using your attorneys more and getting them involved earlier in the process,” he says. “The internal legal team at Sandy Spring Bank works closely with the compliance department on issues that require interpretation,” Kaslow says. “The legal team, which consists of three lawyers, two paralegals and an assistant corporate secretary, also reviews marketing materials and fields a significant number of questions from the bank’s retail group. In-house counsel can also be invaluable when it comes to contract review,” he says, “especially given that banks today tend to partner with numerous vendors.” “You might do okay on the business terms, but there are legal issues that need to be addressed regarding cybersecurity and privacy, for example,” Kaslow says. 3. PARTNER MORE EFFECTIVELY WITH OUTSIDE COUNSEL. Some banks make the mistake of thinking that they can hire an in-house counsel and eliminate all outside fees, but that’s an unlikely scenario. “You’re generally not going to cover everything with one jack-of-all-trades person,” Mastrangelo says. “In fact, relying on a single in-house attorney could put the lawyer and the bank in a precarious position,” says Asnardo Garro, a partner in the corporate and financial services practice at Avila Rodriguez Hernandez Mena & Garro LLP, a Coral Gables, Fla., law firm that works with financial institutions. BANKERS AND ATTORNEYS SAY THINGS GENERALLY WORK BEST WHEN THE GENERAL COUNSEL HAS UNFETTERED ACCESS TO THE C-SUITE AND IS ACTIVELY INVOLVED IN MULTIPLE MATTERS ACROSS THE BANKING ORGANIZATION. “They’ll get swamped,” he says. “At most community banks, there’s so much legal need that it’s too much for one person to handle.” Garro also adds that if a bank has only one attorney in-house, it’s important to provide them with internal and external resources for support. Bankers and attorneys say there’s a role for both, with in-house general counsel helping to streamline a community bank’s legal functions and appropriately divide tasks internally and externally. “Having an in-house attorney work with outside counsel on specialized services such as litigation or employment matters can be more time- and cost-efficient than having a layperson “muddle through” complicated legal issues,” Messer says. “An in-house attorney is also in a better position than a layperson to know what’s reasonable in terms of outside legal fees and the time being spent on various legal projects,” says Paul Saltzman, Chief Legal Officer at $11.2 billion-asset EagleBank in Bethesda, MD. 4. THINK BIG PICTURE. “A community bank needs to carefully consider its growth plans. If it is growing, having in-house counsel could make even more sense,” says Anne Balcer, Senior Executive Vice President and Chief of Government Relations and Public Policy at ICBA. “You would rather have someone come in early on and work collaboratively as part of your growth and management team to INDEPENDENT REPORT | 27
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