Matthew Ford, director of the legal division (NYLJ/Rick Kopstein)
Banco Popular North America’s in-house legal department knows how to do more with less. With only three attorneys, two paralegals and one administrative assistant, the department maintains close relationships with about a dozen outside law firms while keeping legal matters in-house as much as possible to control costs.
BPNA is the American unit of San Juan, Puerto Rico-based Popular, Inc., with 93 branches in New York, New Jersey, Florida, Illinois and California. It handles about $9 billion worth of business. Beginning in 2010, the U.S. company rebranded itself as Popular Community Bank to broaden its appeal to non-Latino customers.
Matthew Ford, senior vice president and director of the legal division, said his department is able to surmount the hurdles it faces despite—and sometimes because of—its small size.
“I look at them not so much as challenges but as opportunities,” he said. “By being a small group, we have to be very efficient, and we have to be very nimble. We work very hard at building strong relationships not only with our internal business partners but also with our external law firms.”
The legal division is responsible for managing and mitigating legal risk and supporting compliance. It handles corporate, regulatory, litigation, real estate, employment, IT marketing and commercial and retail banking.
Much of the department’s work consists of “day to day consumer types of matters,” Ford said, ranging from “something as simple as reviewing a power of attorney or a contract” to “working with our internal business people to modify loan documentation for a contemplated transaction.” The department also handles more complex matters on its own, like major acquisitions and divestitures, he said.
But, Ford said, “Obviously if we have a major litigation that requires a significant bench of attorneys to do discovery and things like that, we don’t have the personnel.”
In those cases, the department turns to outside firms, including Sullivan & Cromwell; Mayer Brown; Holland & Knight; Dilworth Paxson; Frandzel Robins Bloom & Csato; Chuhak & Tecson.
Ford estimated that he maintains “significant core relationships” with 10 to 15 firms, and “ancillary” relationships with 25 to 30. The type of work each firm handles is considered on a “case by case” basis he said.
At the same time, Ford said, his department maintains close working relationships with other parts of BPNA, which means frequent travel around the country for the New York-based legal team.
“By being such a small group, the relationships are key,” he said.
Like all corporate institutions, Banco Popular is concerned with trimming overhead, a large portion of which is payment to outside firms. To that end, the three-lawyer New York team implemented pilot projects that have produced concrete results—in 2013, the department came in at 28 percent under budget, having cut its spending 48 percent from the previous year.
The legal team understands the pressures and dynamics of large firms, said Ford, as all three attorneys spent parts of their careers there. Ford, who has been at BPNA for five years, was at Clifford Chance; Christopher Lalan spent time in Hunton & Williams in Miami and Sydley Austin and Kaye Scholer in New York; and Jennifer L. Rubin came over from Akermann Senterfitt in New York.
“A lot of times legal departments are looked at as deal killers,” Ford said. But at BPNA, he said, the members of the legal department are seen as “strategic partners” who work with outside counsel to find mutually beneficial arrangements. “We look for a win-win,” he said.
While the bank still pays some standard hourly billing rates, it also looks for long-term fixed fee arrangements, flat fee rates, discounts for volume work and for paying invoices early, and streamlined billing practices.
In addition, Ford said firms are chosen for their expertise, so the bank does not expect to pay for basic research and other expenses.
The bank requires estimated budgets for any matter referred to outside counsel and created an online application allowing firms to update and revise information about legal matters quickly and easily.
The New York team tapped into the latest technology to develop a comprehensive reporting and tracking model for case assessment that is communicated to the financial group. Once an estimated budget has been entered, the program tracks invoices and if they exceed budget, the legal team is alerted. All changes throughout the course of the representation must be negotiated.
The firms have been generally open to the arrangements, Ford said. They too take the long view, he said, and are willing to come to mutually beneficial arrange- ments.
In addition to these concrete cost-cutting measures, Ford attributed some of his department’s success to a company-wide culture of supportive accommodation for its employees, including flexible schedules for parents, and an non-hierarchical environment where professionals are encouraged to be creative and flourish.
“That’s one thing that’s not unique to the legal division,” he said. “The entire organization at Banco Popular, you have a lot of people that have been here for many, many years. It’s a testament to the positive work environment and the culture. It’s a really unique, family-oriented culture that allows people to thrive.”
Banco Popular was founded in 1893, when Puerto Rico was still under Spanish rule. It opened its first New York branch in the Bronx in 1961 to serve the growing Puerto Rican community there. It opened in Los Angeles in 1975, and throughout the 1980s and 1990s it expanded rapidly in the U.S. and the Caribbean.
According to BPNA’s most recent annual report, it had a net income of $46 million in 2012.