Carol R. Newman was a frustrated social worker whose life changed with a conversation.
While studying abroad in England, she found herself speaking with Archibald Cox, the Watergate special prosecutor, about wanting to make a difference. He convinced her to go into law.
Since graduating from the University of Illinois College of Law in 1980, Newman has worked as in-house counsel for several insurance agencies, including Illinois-based RLI Corp., San Francisco-based Allianz Fireman’s Fund Insurance Co. and State Compensation Insurance Fund.
“I love insurance because it actually supports the whole world economy,” Newman said. “Without it, we wouldn’t really be able to survive. I still feel that I’m able to have a legal activist role by actually being in insurance.”
In 2016, Newman joined Confie Seguros Holding II Co, an insurance company focused on covering people who may not get insurance elsewhere, such as newly licensed drivers or DUI offenders. In a recent interview, Newman discussed how the novel coronavirus is affecting day-to-day operations and how the legal team has managed to streamline its M&A procedures. The following transcript has been edited.
Daily Journal: On the legal side of insurance, how has coronavirus been affecting what you have to do day to day?
Carol Newman: Like any company, we’re looking at how does it affect our employees? How does it affect our customers? What are we going to do about business interruption? How can we help? How can we respond? These are really the questions we’re asking. We don’t really have the health insurance other than we offer telemedicine, and so we’re looking at how do we get that message out to people so that they’ll recognize that they can actually use that particular product to be able to call and find out if they need to do something more.
DJ: Is there any kind of playbook for something like this?
Newman: Well, there’s a bit of a playbook because you can look at an incident response plan, a disaster recovery plan, business interruption plan. So those are the kinds of playbooks that you look to. You’re frankly looking to see, do we have enough laptops to be able to have the whole company working from home, for example, if that needs to happen.
DJ: Are there any legal considerations, perhaps with risk management, that you have to consider for the business?
Newman: We just actually had a meeting [last week] to talk about our insurance policy — not only what we currently have but what we want to buy in the future. So that’s your risk management analysis and assessment. We’re also evaluating and watching it on a daily basis. How is it impacting our company in terms of revenue and growth?
DJ: Confie does a lot of M&A work. How do you balance that workload?
Newman: The good news is we have a great M&A team, so what we worked on a few years ago was really getting the agreements in a template so that we can do the work quickly. We worked on a due-diligence checklist, and so we have a lot of it down to a science. Where we’ve focused is on our implementation, and once we acquire, how do we quickly actually integrate and move forward with the business.
DJ: How did you develop that streamlined process?
Newman: We worked with the business team and looked at historically what were our pain points, what did we see after the fact in this integration that would’ve made a difference if we had known in advance? We brainstormed on it, and we came up with a pretty simple checklist. Our [old] checklist was long, so we identified on this checklist what’s important. We use that now to actually have the potential seller fill it out and actually attest to their answers. It’s a foundation for us in terms of what they’ve actually represented and warranted to us.
DJ: What advice would you give to legal teams trying to smooth out their M&A process?
Newman: The type of M&A we do, we don’t do these mega deals, so it’s not like a Disney and Lucasfilm combination. That’s why we’re able to have, as I said, a template in terms of a purchase agreement. Be clear about what your deal breakers are so that you can quickly get to resolution on: we’re going to work with this agreement and it’s our agreement or not, and what are the ones that our business people are comfortable in terms of being able to negotiate trade on.
Have your due diligence down to a science. ... Do they have a lot of litigation? Do they have a lot of [Errors & Omissions]? In our case, do they have, are they properly selling the product? Do they have proper disclosures? We know what our trigger points are in terms of whether or not they’re running a good organization or not, and that’s what we’re looking for so that we can integrate them faster.
DJ: How do you use outside counsel?
Newman: I always try to do the work in house first, but we use outside counsel for capacity or frankly if we don’t know the area of law. Then we’ll want to work with outside counsel. But we still want to develop our own knowledge about that particular area of the law.
I want to go to outside counsel just to make sure we haven’t stubbed our toe because one of the things that outside counsel brings that we can’t ever bring is they can look across a client base, and they can help you with your risk assessment about if you’re being too conservative or too risky. I think often in-house counsel don’t ask that question. I always ask that of outside counsel to help me understand where we’re fitting in the spectrum of our business decisions about how we want to implement the advice in law that we’re working with.
DJ: What makes an outside counsel attorney someone you want to keep working with?
Newman: A good outside counsel is responsive and cares about me as a client. He or she understands our business and our risk tolerance. Their advice is clear, crisp and concise. It really frustrates me if they talk to me about stuff I already know. I really want them to help me with the nuanced advice that I’m looking for. They’re also very honest about their own capabilities and limitations. I very much appreciate if they tell me they don’t know something, and it’s wonderful if they can make a referral to somebody who does know, whether that’s in their own law firm or not.
I also like an attorney that still has a sense of wonderment about them. That’s that curiosity because I find that they’re better attorneys when they become curious about trying to puzzle through and figure something out. Particularly when we’re dealing with new situations and new law.
DJ: Do you try to keep that wondering in your work as well?
Newman: I do. It’s more fun.
DJ: How do you maintain that sense of curiosity that drives you?
Newman: I actually don’t know. I like puzzles, and I think that if you like puzzles, you’ll have that sense of wonderment and curiosity about trying to figure something out.