I'm Helen, I Possibly, Maybe Like My Job.......(5)

The 5th in the series of careers in the trust industry is the in-house Trust Counsel.

This is typically a role that exists outside of private practice though some law firms have a high-level, figurehead, Yoda/guru which is an equivalent of in-house trust specialist. The common thread is these are the people that rarely, if ever, see clients, never have billing or revenue responsibilities and are primarily responsible for being the intellectual vault and gate-keepers of risk. The job is often seen as refuge for those that can't or don't want to make partner of a law firm. In-house is usually a cushy job with stability, reasonable hours and good financial benefits.

There are typically 2 types of in-house roles: 1 for the trust business and 1 for the company as a whole. There's a big difference which I'll explain further down.

Counsel is almost always a lawyer/barrister/attorney/solicitor. Yes, need someone with a legal background. Not so good if you can't find a lawyer with a real trust background. Far too often, the person hiring the lawyer is not a lawyer themselves and many times, not even a trust person, so you end up with a lot of private client, tax, commercial or even sometimes family law or probate lawyers filling the role. Some do OK.....others are a running joke. Far too many people over-estimate the usefulness of a lawyer when it comes to trust work. Far too many non-trust lawyers over-estimate their knowledge about trusts. My advice: consider any lawyer a trust-moron until otherwise proven.

In-house counsel that are "for the company" may be part of the "legal department" and may not even sit with the trustees. There may be other company legal matters to attend to and the trust department is just one of your many "clients". They are a resource and how a resource is used or misused depends on the organisation. Some in-house are ignored as they less competent and cognizant of trust issues than your humble and lowly 4th year Trust Officer. Some are bypassed as much as possible as they may cost the trust business real money to use. Why pay for in-house when you can get the client to retain external counsel? In-house may sometimes just be a glorified messenger between the company and external counsel as who wants to really issue an opinion these days? Who wants to rely on an in-house opinion? Some are avoided as they are as business-friendly as a paranoid Compliance Officer with conspiracy issues. Other times, the in-house is as friendly and approachable as a pit bull terrier. Why work when you will still be paid just to sit? And if they were any lawyer worth their salt, you would end up with a reply (not an answer mind you) that had a lot of words but little meaning. In other words, you got a lot of "if's" "maybe's" and "perhaps" and "possibly's" which is fine liability management for external counsel but obviously a waste of time for those who truly need advice.

The main problem with a "company" in-house is that it is an adversarial system. It is you against everyone else. You are often a hurdle for those wanting to do business. When there's money involved, people like bankers and trustees will go as far as to collude and conspire against you to get the results they want, which is sign off on the business. If the Legal Department is strong then you will make a lot of enemies as you will turn down a lot of business as being too risky or dodgy. Most will fail to understand or appreciate the risk and unfairly label you impediment. You just cost them their Thai beach house or kid's college fund. If you are weak then you will capitulate and sign off on everything as a "business decision" rendering you a mere formality and no longer a gate-keeper which is what the company really needs. Supposed allies like the Compliance or Tax Department stick their heads in the sand and deflect everything back to you as a "legal matter". No one is willing to take responsibility for anything. You would be stupid to do so as it will come back to bite you.

For those that are "for the trust business": If you were sarcastic, then you could say that the existence of an in-house trust counsel pretty much means that the employer, be it a bank or trust company, doesn't know what it is doing. So you have an in-house because no else in the trust company knows the "right way" to set up and administer trusts. Be prepared to be bombarded with a lot of "you got to be kidding me" type questions from people who have no business being in the industry. Clearly that is not the case in all trust companies. The role may have been born out of necessity but sometimes regulations and other factors have literally forced some trustees, especially banks to keep "qualified lawyers" as part of the checks and balances of the overall governance of the business.

Now the main problem of being a trust business in-house is that you are there to validate what the business wants. You will need to sign off on that bearer share Cook Islands IBC with Red Cross trust beneficiary structure as it is what the business wants. If you won't then someone will be signing off on your termination papers. I know of cases where the in-house was instructed to find a way around a damning external opinion. Yes, please turn black into white or at least grey.
You are a court jester and if the King isn't amused then you could lose your head. You might just have to learn to hold your tongue and be subservient if the job means anything to you.

In-house of course is the first place people will look to when things go bad. What idiot proposed this way of doing things? Who drafted this unworkable procedure? Who signed off on the case the IRS is investigating? Who authorised the structure that was deemed a sham by the courts? Why weren't we informed of the risk? Who says we can't sell this or that anymore? Why hasn't UBS been able to hire multiple Wealth Management counsel roles in Singapore/Hong Kong for the past year? The trust business can be extremely complex and far-reaching so much so that there is always something you weren't aware off. If your in-house isn't up to snuff, then you will be burned sooner or later. Told you not to take responsibility for anything.

On the positive side, any in-house role could be a vital and highly important role that help establish policies and procedures, provide technical/research support, vet cases, set precedents, advise on risk, support audit and litigation and perhaps input on education and training. Overall, I would say that having a qualified in-house is great business decision and you should empower them to do their job and not let the business and politics drag them off course. You should recruit the best and not take in refugees.