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Corporate Counsel Connect collection

June/July 2012 Edition

Transforming the role of the GC in a changing industry

An interview with Don Bundy: General Counsel for Prospect Mortgage, LLC Sherman Oaks, Calif.

Don BundyOver the last two decades, the role of the General Counsel has changed, becoming more integrated and dynamic. Don Bundy, GC for Prospect Mortgage, LLC, is one example of just how dramatically this position has shifted from simply monitoring a company's legal work that was outsourced to outside counsel to becoming more of a "C-level" executive team member, someone who is just as vital to the organization's day-to-day business as the CEO or CFO. We asked Don to share with us a little bit about how his role as GC has changed within the financial industry, which has encountered tremendous regulatory change, over the span of his career.

Can you describe a 'typical' day in your role as a GC?
As GC I manage five departments in the company, one of which is legal. I have two staff attorneys – a deputy general counsel and a contract attorney, and one paralegal that are part of the core legal team. I also manage several attorneys in other departments, in addition to managing the licensing department – because we do business in 48 states, and loan officers need to be licensed in each of those states. In addition to that, I manage the Compliance Department, which has three attorneys and a staff of 31 people. They run and manage our regulatory compliance. Because we are in the mortgage industry, we have a Risk Purchase Group that handles all of the defaulted loans, and an attorney I oversee is the head of that group. I also manage the Servicing Department, which services loans; we have 17 staffers in that department. Due to the multitude of litigation that the federal government has chosen to bring on loan servicers, loan servicing is also an area that requires a lot of attention from me.

Wow, so you're a busy guy!
Yes, I am. We have our hands in a lot of little pies and legal is a little bit broader than most people think of in the scope of the company, so we're involved in a lot of the day-to-day operations.

How do you usually work with your teams throughout the week?
I have a weekly staff meeting, where I meet with all of my managers and we basically set out all the goals and objectives for the week and go over those in fairly good detail. Then I manage the progress of those throughout the week plus handle any "fire drills" that occur, just because emergencies arise throughout the week. I interface with all the major business units and participate in a joint management meeting to provide guidance and advice. I usually come out of that meeting with jobs and tasks that I have and then distribute some to my staff.

How do you gain the trust of your internal business clients so that you are an active versus passive member of their team?
Truly, you do it by basically "saving their bacon." Often they'll need someone to come and get them out of a jam, and the GC shows up with his team and helps them solve that problem. In order to solve their problem, you really need to know their business. You need to know their role in the business and the types of problems that they face on a daily basis, and you have to find a way to assist them with their problems – because if you don't assist them with their problems, they'll end up becoming your problems. Once you've solved their problem, you immediately become a part of their team because you've demonstrated that you have their best interest at heart - you're not there to be a critic.

You've spent a large amount of your career in the mortgage and banking industry, correct?
Yes. I was in private practice for 15 years, but most of my private practice revolved around banking and S&L representation, so that's where I've spent most of my career. I love it because it's never boring, and it's so diverse. You get to handle everything from large financial securities transactions to vendor relationships and contract relationships. The industry just naturally spawns a lot of litigation, and so you're never very far away from litigation. Yet it's a defined area where you can gain a significant amount of expertise and manage it, and you have a lot of vendor and regulatory contact because it's a regulated industry.

What prompted you to make the move in-house after having your own practice for so many years?
I liked the corporate environment, where you have the ability to impact the culture of a company and to actually be a member of a management team – that part of this job is the most satisfying.

How do you feel that the downturn in the economic crisis of late has impacted your role or your department?
The government has emphasized the importance of regulation now, and because it has increased the focus on legal compliance, the GC's role within the company has grown, and the role that it plays has grown. The activities that used to be barely looked at are now closely scrutinized, and so the level of tension has increased and our interaction with the regulatory agencies is much closer than it used to be. In the past, regulators used to come maybe once every three or four years. Now they are regularly meeting with us four times a year. And it's almost a partnership where they are seeking your advice at times and at times you're seeking their advice, because we've both got the same problem – we're both having regulations imposed on us, and we're trying to figure out how can we effectively implement those without killing the industry.

And how do you think that you and your team have responded to that change—what has worked well for you to manage that change?
Our relationship with vendors has had to change. We now think of our vendors as our partners, and when we see things coming down the regulatory pipeline, we get with our vendors early on to help come to solutions, because you can't do it alone. The level of cooperation you need to have with your vendors and your regulatory agencies has increased, and the skill level of the staff that you have has had to increase – we've had to upgrade staff, we've had to train staff in things that they were previously not trained in, and so we've all had to step up.

As you look ahead into 2012, what do you see as the biggest challenges your team is facing?
Well, the Consumer Financial Protection Bureau (CFPB) that has been created by Dodd-Frank is just now getting its legs. And they're just starting to do audits and basically interface in this industry, and no one knows what it's going to be like to work with them. So there is going to be this testing period over the next year to two years as to how they are going to change the way we do business and as to how we're going to have to change how we do business because of them.

During your career, how have you seen the role of the GC evolve?
25 years ago, GCs had a much smaller role, and they were looked at as an attorney hired by the company to do tasks that the company assigned them. That is no longer the case. They have moved the GC into the "C-level" penthouse, and you sit at the same table as the rest of the C-level executives. You have a place at the table, and your opinion is valued to the same extent as other C-level executives.

What keeps you up at night?
15 years ago I would have said it's litigation; that's not the case anymore. Now what keeps me up at night is regulatory changes and the economic impact of those on the company, and being able to continuously justify the cost for regulatory compliance. It's inherent to the industry, and various industries go though that at given times, when they become the focus of the government.

If you could hop on a plane tomorrow, where would it be headed?
Iceland. It's such a beautiful country, and it's so diverse. I've been there four times. It's beautiful and the people are wonderful. I was just out of college and touring Europe for the summer and the plane broke down and landed in Iceland. I got to spend two days in Iceland and fell in love with it, and ever since then have loved it.

Have you ever received any advice during your career that you've really held on to?
I think the best advice I've ever received is that, at the end of the day, you don't have to win every battle; you just have to make sure that you're headed in the right direction.

If you quit tomorrow, what would your dream job be?
I'm doing my dream job. Really. I'm doing it. I couldn't have a better job.

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