Independent Banker - May 2023 - 20

PORTFOLIO
Finding your bank's best legal team
" When you're not
paying by the hour,
you feel more
comfortable using your
attorneys more and
getting them involved
earlier in the process. "
-AARON M. KASLOW, SANDY SPRING BANK
No one size fits all when it comes to how community banks
organize their legal departments. For example, Michelle Terry,
general counsel and senior vice president at $1 billion-asset First
Arkansas Bank & Trust in Jacksonville, Ark., reports directly to the
CEO, who is also one of the bank's majority shareholders.
By contrast, at American National Bank of Texas in Terrell, Texas,
the general counsel reports to the bank's chief operating officer
and offers advice to the board, even though he doesn't hold a
board seat, says Robert Messer, chief financial officer and chief
risk officer.
Meanwhile, Aaron M. Kaslow, executive vice president, general
counsel and secretary, is a member of the executive team at Sandy
Spring Bank in Olney, Md.
" I think it's a really good idea, because you want your general
counsel to be aware of what's happening across the bank so the
general counsel can be proactive and not just reactive to issues
that come up, " he says.
Bankers and attorneys say things generally work best when
the general counsel has unfettered access to the C-suite and
is actively involved in multiple matters across the banking
organization.
" It's not just a lawyer sitting in-house. That's probably the
internally and externally. Having an
in-house attorney work with outside
counsel on specialized services such
as litigation or employment matters
can be more time- and cost-efficient
than having a layperson " muddle
through " complicated legal issues,
Messer says.
An in-house attorney is also in a
better position than a layperson to
know what's reasonable in terms of
outside legal fees and the time being
spent on various legal projects, says
Paul Saltzman, chief legal officer at
$11.2 billion-asset EagleBank in
Bethesda, Md.
4. Think big picture
A community bank needs to carefully
consider its growth plans. If it is
growing, having in-house counsel
could make even more sense, says
Anne Balcer, senior executive vice
president and chief of government
biggest mistake banks make, " says Paul Saltzman, chief legal
officer at EagleBank in Bethesda, Md., who serves on the executive
committee and several management committees. " An outside
counsel may tell you whether you can do it; an inside lawyer will
tell you whether you should do it. "
relations and public policy at
ICBA. " You would rather have
someone come in early on and work
collaboratively as part of your growth
and management team to position
you to be successful and avoid some
of the pitfalls you can run into by
growing quickly, " she says.
What's more, a general counsel
role doesn't have to be narrowly
tailored, Saltzman says. A bank, for
instance, might be able to organize
compliance and other administrative
operations under the supervision of
a chief legal officer. General counsel
can be involved in business planning,
corporate governance, product
planning and other areas that reduce
legal risk-before it manifests
itself in a customer complaint or
regulatory action.
" In-house counsel needs to be
looked at as people who prevent
fires, " Saltzman says, " not just people
who put out fires. "
Cheryl Winokur Munk is a writer in
New Jersey.
20 // ICBA Independent Banker // May 2023
Independent Banker - May 2023

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