Would you like to give us a bit of background on Nationwide?
Nationwide is a Fortune 100 company (number 83) headquartered in Columbus, Ohio. With annual revenues more than $25B, Nationwide is one of the largest domestic U.S. insurance carriers. Nationwide offers traditional property and casualty products, is a large writer of life insurance and retirement savings plans, and includes a mutual fund group and a bank. Not only are these businesses highly regulated, most are regulated at both the state and federal level in the U.S. by many different agencies, and sometimes those regulations conflict. It is an ever-changing and fascinating job!
What is the size of your legal team and how is it organized?
I manage nine functions, five of which are legal functions. The biggest group of attorneys is the Nationwide Trial Division, about 400 lawyers in offices across the U.S. who represent Nationwide’s insureds when the insured has been sued. They provide terrific outcomes for our policyholders. The remaining 300 lawyers support the highly regulated businesses of property and casualty insurance (personal and commercial lines), life insurance (individual and corporate-owned), retirement savings (private U.S. 401(k) plans and public company 457 and 403(b) plans), plus a mutual fund operation, a bank and a group managing general company litigation.
The other functions I manage are Government Relations, Corporate Citizenship (the Nationwide Foundation and other civic activities), Ethics and Compliance. I am also responsible for corporate governance across the organization, including board support for the outside board of directors of our parent company, Nationwide Mutual. My total staff is 1,464 individuals, with about 664 working in attorney roles.
What are the main external challenges you face in your department?
At the micro level, a powerful external challenge is the sheer volume and complexity of regulation. Like others in the U.S. insurance and financial services industries, Nationwide is experiencing a record-setting explosion of new regulations and regulatory examinations. Tracking the new rules and responding to numerous investigations within reasonable resource constraints is quite a challenge.
At the macro industry level, pivoting to meet the needs of customers – we call them members – in the new technologically advanced world is a large, but fun, challenge to tackle. These issues permeate our thinking about products, distribution, talent strategy, etc.
Are external lawyers, in your experience, becoming more or less efficient in serving your sector? In which ways? Will this trend continue?
I think there will always be a need for sophisticated legal specialists who can respond to very specific, unusual client needs. There are some specialties that do not lend themselves to being brought in-house. However, those instances are not frequent. Increasingly, the day-to-day legal work is most efficiently handled by in-house specialists who understand the details of business operations and strategies. It is also my view that the economic structure of the classic law firm does not hold up well in today’s fast-paced environment and business expectations. We now handle most of our matters with external counsel on some sort of alternative, non-hourly fee arrangement.
To what extent have you been able to use IT to streamline your work? How will this develop in the future?
IT has enabled a lot of changes to improve our efficiency. Our matter management program enables us to see all of our work that is open at any given time. Our litigation offices have gone paperless, eliminating the need for large file rooms, and giving everyone working on each matter immediate access to materials in the case. We are working on implementing a strong document generation system.
In addition, there are many programs that give us the ability to better comply with regulatory requirements. Whether we are tracking discovery requests and responses, regulatory requests and responses, other agency rules, etc., the technology we have today enables it to be done on a scale that was unthinkable 20 years ago.
Which parts of your job to you enjoy most?
Contrary to popular perception, insurance and financial services are fascinating and creative businesses. Understanding how the business works and the interplay between operations and regulation is exciting. I enjoy the problem solving. I also enjoy the translation function of a good lawyer. I teach a class on effectively communicating with different audiences. That communication challenge across a large Fortune 100 company is quite engaging for me!
How different will things be in five years for a lawyer in your role?
I definitely see a lot of IT in our future, but not just in the form of workplace tools to make us more efficient. Advances like driverless cars will change the nature of the products our members need, and Big Data may enable much more granular matching of products to member needs. I think communications technology will also continue to make the world a smaller place, and the importance of geography in work and regulation likely will change because of it. This geographic change has big implications for businesses regulated at the state level in the U.S.
Finally, one of the big changes in the next five years will also be the continued retirement of the Baby Boom generation and the rise of younger generations into leadership positions in industry and in government. The different perspectives these younger generations will have on the nature of work and the financial services business is likely to trigger striking changes in our thinking about all aspects of insurance and financial services.
Your daily life as a lawyer: can you describe some of it?
My days are rarely repetitive, and I like the variability. Nationwide has a somewhat Midwestern culture, and days start early. I usually arrive between 7 and 7:30 a.m. (many of my colleagues are already at their desks by then), and I like to stay until 6 or 6:30. Of course, the work isn’t limited to the time in the office. I regularly take calls or work at home at night or on the weekends as needed.
My day-to-day interactions focus on the company’s senior executives and CEO, the Board of Directors and its leadership, and on the leaders of the divisions for which I am responsible. Since Government Relations is one of my areas of responsibility, I also have a fair amount of time in offices of federal and state officials. I even occasionally get back into the courtroom, but only as an observer on significant litigation.
With 1400 people in my area that I feel I am responsible for, a significant portion of my time is spent on management issues such as compensation, organization structure and professional development. On the management side, I have learned that the most important decisions are really the hiring decisions, so I also devote time to recruiting and retention.
What do you see as your department’s main achievement or two in the last couple of years?
Due to planned retirements, there are several new leaders on the team reporting to me. In the last three years, we have built the strongest leadership team I have ever worked with, and have been able to “up our game” in recruiting and developing great talent at Nationwide. I am extremely proud of the people in our office and the caliber of work they turn out. So one achievement I think has been important is the building and development of this leadership team.
Additionally, our Government Relations team successfully led a multi-year effort to persuade Congress to adopt the first amendments to the Dodd-Frank Act, which President Obama signed into law in December 2014. Those amendments enabled the Federal Reserve to develop and adopt insurance-specific capital standards for the insurance companies they regulate. It was quite an effort and eventually a constructive and effective outcome.
What do you get out of your involvement with the Association of Corporate Counsel (ACC) (as former chair, member or Insurance Staff Counsel Committee member)?
ACC has been a valuable resource to me for most of my legal career. I joined ACC in 1986 when it was only four years old. I was a new in-house attorney and had quickly concluded that the traditional law firm bar associations were not going to be that helpful to me professionally. Throughout my career, ACC has been a knowledgeable resource on substantive legal issues, a terrific vehicle for connecting with other in-house professionals, and a great place to learn about vendors with the best technology and expert advice on law department management.
I loved my time on the ACC Board of Directors. We drove important public positioning for ACC (ex: protection of the corporate attorney client privilege) and moved the needle on ACC’s online capabilities. As Chair of the Board, I had the unexpected honor of leading the search and transition from ACC’s president of more than 20 years, Fred Krebs, to our current president, Veta T. Richardson. I also had the very cool experience of interviewing the general counsels of Microsoft and Google on the same stage at the 2010 ACC Annual Meeting in San Antonio! ACC continues to be a vehicle for making lasting professional connections for me.
Can you tell us a bit about yourself as a lawyer?
I wish I could say that becoming a lawyer was the fulfillment of a lifelong dream. The truth is I did not think about becoming a lawyer at all until I was out of college. After college, I ended up taking a job as a paralegal at a law firm, and I was completely intrigued by the work I was exposed to there. After law school, I went to a big firm planning to specialize in healthcare and litigation. A few years later, as a resume booster for an eventual in-house role at a hospital, I took a position with the law department at Independence Blue Cross in Philadelphia. I thought I would stay there 2-3 years. But, I found that learning about the insurance industry was fascinating, and I ended up staying there 16 years, 13 of which as general counsel.
I have had the pleasure of working with a number of great lawyers over the years. I would call out two who were tremendous mentors and advisers to me: Jerry Calvert at Morgan Lewis and Bob Heim at Dechert. Both are superb lawyers and very trusted advisers.
What do I like best about what I do? The problem solving. In a highly regulated business, the most effective lawyering happens when the business can navigate legal and regulatory hurdles to accomplish its goals. I love being close to the business, understanding the strategic priorities and the customer needs, and working through the regulatory issues to get to solutions that support those initiatives. I have been responsible for supporting Boards of independent, non-management Directors for more than 30 years, including a public company board, a mutual company board, and the board of a large 501(C)(4) organization. Seeing how strong leaders and good governance work from the inside has been an engaging experience.
Patricia Hatler, Chief Legal and Governance Officer of Nationwide