Tim Murphy has worked for MasterCard for 16 years. Starting out as an in-house lawyer, he then spent over ten years in non-legal business roles, serving as president of the U.S. region and chief product officer. In 2014, he stepped back into legal to assume the mantle of general counsel. In the second of a two-part interview, GC caught up with him to hear how the integration of the legal and business teams are impacting the company’s programmes.
GC: You’re currently looking at the way the MasterCard legal department operates and undergoing some transformative work – can you give us a preview of some of the key areas you’re looking at?
TM: This is a journey that many other companies are also on. At MasterCard, we have a comprehensive transformation effort underway. The trick is to pull a variety of distinct projects together into a sustained effort that drives both activity and outcomes.
The vision for the law and franchise teams at MasterCard is to be a high-energy and high-performance team that is executing world-class risk management, that scales for efficient growth, and that drives impactful results for the business. Everything we work on should deliver against that vision.
You can break it into a couple of different things. As we navigate dramatic changes in our business, we’ve seen the need to significantly enhance and invest in our risk management capabilities. We have a new compliance head who is doing a great job enhancing our world-class compliance programme for us, and we have some of the best people on data governance and privacy issues, as data becomes increasingly important in this digital age. Our franchise teams are looking at how we do a better job managing third party risk, which is a large issue for many companies. There is a real investment programme as part of transformation, going from what I think is good to what I hope will be great.
There is also a big piece around measurement; being as efficient as possible. Historically, our department grew organically, not as a well-thought-through factory, but more like a craft guild where if you needed another cobbler, you would get one. That can’t be how we grow in the future. We have fantastic lawyers, but I need to measure results and hold ourselves to outcomes. We have a new GC metric score card that is outcome-based, as opposed to tracking activities. How are we being viewed externally? How are we thinking about using straight-through processing where contracts bypass legal review? How are we using technology more efficiently? So, we are thinking about a set of things that, if you are going to run as a business, you have to get more efficient with.
We are also really thinking hard about culture and making sure we are living our fundamental commitment to high performance through diversity, creating a lot more opportunity for people through organisational change. We have asked some of our newer folk to step into senior management roles. The danger of in-house legal teams is they can ossify; we are trying to get movement in. Not everything we do is purely legal, so bringing business expertise in is important. So we are thinking about our career pathways and culture, diversity and energy, to help create this high performance team.
GC: Do you think there are any traps that in-house lawyers and their teams fall into that perhaps prevent them from working as effectively with the business as they could?
TM: There is a danger that you can take the view ‘because I have the fancy degree, my work is the most important and essential in the firm’. You have to have humility to recognise that, at the end of the day, legal is an important role, but a support role (as is finance, as is HR), and you have to be enabling and advancing the business. For lawyers, this means being open to moving beyond the formalities of transactions and advice to understanding the business and the business strategy, and getting our feet dirty in things that are not purely legal. Some of our best business people at MasterCard came out of legal. And I am pressing my teams to think beyond advice-giving to end-to-end business execution, just like business people do.
There is also something about simplicity and storytelling. I see it again and again; even good legal advice can come with extensive build-up as to why it’s right, and sometimes you need that. You really want to get to a position of trust with your business clients, but not have to show all the work. I know this because I’ve had this feedback from my CEO: ‘Don’t lawyer me an answer!’ That’s great advice for every lawyer. We need to focus on simple, crisp communications and get to the point, as opposed to showing how smart we are.
GC: Legal objectivity may be held up as a reason for not being more business-minded by some lawyers. As someone who has fully embraced both roles, how would you respond?
TM: There are different approaches to this in the US and the UK, and my perspective is clearly shaped by my American perspective. But broadly, I’d suggest that legal objectivity feels like a formalistic way of resisting change – or at least there is a serious risk of that. There are places where it’s clearly appropriate and, as a legal professional, you have to understand those spaces, know your boundaries and be prepared to enforce them. I will do everything to advance the strategy of this company, but our efforts must be ethical at all times and my legal obligations are to the company and the board, not to any individual. You have to make tough calls and objectivity becomes important. You also have to be aware of it when you are working with regulators and governments. It is slightly different if you are a litigator.
There is a fundamental obligation of transparency and honesty. A law school professor once said to me: ‘There is nothing you can do that’s valuable enough to give up the licence to practice law’. There are places where that is important and a GC has to make sure that legal teams feel empowered to draw the line where it should be drawn. We think a lot here about first, second and third line of defence. But, in most circumstances, our jobs are about getting business done and employing commonsense objectivity. For me it’s about being seen as both a business leader and also a really good lawyer.