Future JPMorgan GC: Our Department is a ‘Partnership’

Earlier this month, the country’s largest bank, JPMorgan & Chase, with around 1,200 lawyers, announced a changing of the guard at the top of its legal department.

Stacey Friedman, who has spent three years with the company since joining from Sullivan & Cromwell, will take the reins as general counsel by early next year, the company said in a statement.

Steven Cutler, meanwhile, who has guided the legal department in the general counsel role for the past eight years, will become Vice Chairman as Friedman steps into his role.

In an interview with Big Law Business, Friedman laid out her vision for the JPMorgan legal department under her management, her views on what makes JPMorgan different than other in-house law departments and how she views her legal team as a law firm partnership.

Interview Excerpts

Do I have a different style? On some levels, no. I think we are very similar. We both have intellectual curiosity. We both found ourselves pouring through a legal statute the other day, parsing the words, and laughed at each other because we are both lawyers.

When it comes to things like technology and knowledge management, I might push further and faster along those themes. He just got a new iWatch and I was trying to show him how to use it!

I view everybody as a partner here. The legal department isn’t run based on seniority.

I don’t meddle much in who is going to get retained. On 99 percent of the matters I’m pulled into, there is a subject matter expert.

There aren’t really people who just manage. We are all doers. I thought they weeded out all the managers a long time ago.

Below is an edited transcript of the conversation.

[caption id="attachment_3228" align="alignleft” width="333"][Image “Pedestrians walk past JPMorgan Chase & Co. signage in this photo taken with a tilt-shift lens at the company’s headquarters in New York, U.S., on Monday, Dec. 8, 2014. U.S. stocks dropped, following the worst loss in six weeks for the Standard & Poor’s 500 Index, as global shares slid on concern over growth in China and potential political turmoil in Greece. Photographer: Ron Antonelli/Bloomberg” (src=https://bol.bna.com/wp-content/uploads/2015/07/205720540-e1436826202415.jpg)]Pedestrians walk past JPMorgan Chase & Co. signage in this photo taken with a tilt-shift lens at the company’s headquarters in New York, U.S., on Monday, Dec. 8, 2014. Photographer: Ron Antonelli/Bloomberg[/caption]

Big Law Business:What brought you to JPM initially?

Friedman:When I first talked to Steve Cutler when coming here, obviously the opportunities here are fantastic but I was coming from a firm that was fantastic, too. I said that I have great opportunities here, but I wanted to talk a little bit about the people. In other words, ‘Why would I leave my family?’ Steve smiled and said, ‘Wait until you meet my family.’ This is not only the best law firm on earth in terms of talent, but they are good to the core. They are trying to do the right thing. As mentors, managers and sponsors.

Big Law Business: What would you say you have learned from Steve?

Friedman: Maybe it comes back to the theme of the family. Steve’s job is just enormous. As you can guess, nobody does it alone. You need a lot of people who are equally driven and subject matter experts. He is the master of making sure you get everyone around the table and that everyone is making decisions together.

Big Law Business: What are the biggest legal challenges you are facing?

Friedman: The challenges are in your headlines. The big matters are particularly challenging. The $13 billion mortgage backed securities resolutions, the FX resolutions. But I would say, even roll it forward to your headlines today: the markets, whether because of regulation or volatility, are undergoing some of the deepest and broadest change over the past few years. Greece, where I don’t think anyone has a roadmap to sovereign default… creates challenging situations... It’s not like you can pull a law treatise off the shelf and know what the legal answers are. Because of the longevity of our department and the people who are here, we have an enormous amount of internal experience that helps inform those judgments.

Big Law Business: Will you have a different management style than Steve?

Friedman: Do I have a different style? On some levels, no. I think we are very similar. We both have intellectual curiosity. We both found ourselves pouring through a legal statute the other day, parsing the words, and laughed at each other because we are both lawyers. When it comes to things like technology and knowledge management, I might push further and faster along those themes. He just got a new iWatch and I was trying to show him how to use it! But, fundamentally it comes back to the people on the team. I sat at the table with Steve for three years and the people who are around that table are keys to the success. I don’t expect any changes.

Big Law Business: You referred earlier to JPM’s legal department as a law firm. Can you elaborate on that?

Friedman: It is a partnership. I view everybody as a partner here. The legal department isn’t run based on seniority. For all intents and purposes, all the lawyers here operate matters with collegiality and they own their issues in the way you see in a partnership. Culturally, as you see in a firm, it feels no different here. I do think, just like law firms, you can go from law firm to law firm and they are culturally different. You can get the sense that Cravath is different from Latham & Watkins and Quinn Emanuel. I’ve been here three years, but I’d say this fundamental culture of ownership and partnership has been here for a long time… I think there is a sense in some organizations and companies where they say, ‘That is the legal department down the hallway,’ and it feels like they don’t work together [as seamlessly with the business].

In the spring of this year we had a managing director meeting off-site here in New York for a few days to talk about strategies and lessons learned. We had 70 people from around the globe, and I think it was Daniel Pinto [CEO of the Corporate & Investment Bank] who asked them who has been here for 10 years and everyone raised their hand, and he said 15, and there was still more than half the room, and then 20, and there were still a bunch of hands up. There has been a tradition of people coming here and getting opportunities, and it’s instilled in us as managers that you have an obligation to [help build] careers.

Big Law Business: Going along with this idea of family,how do you make sure you are surrounded by the right people?

Friedman: I think probably embedded in your question is one of the challenges each of the GCs of all the major businesses of JPM face. You are always trying to find that right mix. You are looking at top talent, and are they growing? Is the business growing and can we get more efficient? I think that it’s like a Rubik’s cube, where you are constantly trying to adjust a little bit.

Big Law Business: Where do you see professional managers fitting into the legal process these days?

Friedman: In terms of managers for the sake of managers, I don’t think in the legal department… there aren’t really people who just manage. We are all doers. I thought they weeded out all the managers a long time ago. The firm I came from is the same way. The people who manage the firm are very active lawyers as well. I think there is an enormous benefit to being an advisor, a practice leader and a manager.

Big Law Business: What kinds of law firms do you use?

Friedman: We use so many. It’s different for different businesses. We have an enormous roster of well-known and less well known and less national firms.

Big Law Business: Any constructive criticism you may have for law firms?

Friedman: There are rarely times when I need a ten page memo. We need practical advice and likewise, there is rarely a time that I need technical advice that dances on the head of a pin if ultimately it’s not a sensible thing to do… We want to do something, not just the way the law is written, but the way the law is intended. The advice should be in line with our intentions.

Big Law Business: You went in-house after practicing at Sullivan & Cromwell. Many law firms say that losing their partners to a company is actually a good thing, since it brings the law firm closer to the client. How has your relationship been with S&C since you joined JPM?

Friedman: I have good friends who are still there, who are still great friends. I have to say on a day to day work basis, I am trying to think if I’ve… they still do some mortgage matters, so I still run into them in a professional way. But I don’t think I’ve run into them on many matters outside RMBS.

I don’t meddle much in who is going to get retained. On 99 percent of the matters I’m pulled into, there is a subject matter expert. I’m being asked to come in to consult because [a matter is] being sticky or difficult for a number of reasons. I want the right firm who will get us there in the right and efficient way. I am going to trust my partner who knows the industry and knows the partners and associates to do the work. And they will advise me on who to retain.

Big Law Business: Any fun facts about yourself?

Friedman: It is a fatal flaw [that I’m a Dolphins fan].

Big Law Business: Your favorite Supreme Court Justice?

Friedman: Just to be completely irreverent, I’m naming Gary L Taylor [a retired U.S. District Court Judge for the Central District of California]. He is the judge I clerked for forever ago and maybe they never asked that man to go on the Supreme Court, but they should. When I try to come to legal issues with intellectual honesty, Judge Taylor is where I go to in my mind. So I’m floating him to the bench right now.