We asked Valerie Kitay, general counsel and chief compliance officer at Savanna and the winner of the General Counsel of the Year award at the 2018 Global Counsel Awards, her opinion on what it takes to be a successful in-house counsel, the best way to advise senior leadership and what winning the award meant to her.
Describe your current role (responsibilities, size of team, structure).
I serve as general counsel (and chief compliance officer) for the entire Savanna platform, which includes our fund/investment arm as well as our leasing and construction management services. Savanna is a real estate operator that generally invests in value-add/opportunistic investments located in New York City through a series of real estate private equity funds. We invest equity and debt into all commercial asset classes other than hotels, and generally aim to add value through the implementation of redevelopment, repositioning and leasing efforts.
In my role, I touch everything from diligence, investor relations, marketing materials to legal documents as we raise capital, and then everything from term sheets to definitive legal documents as we purchase, sell or finance our investments.I am also in change of HR and handle all employment matters and employee documentation in-house. I serve a large advisory and risk management role here and am involved in analysing, structuring and determining whether any business decision is in the best interest of the company and that we are in compliance with our requirements as a registered investment adviser as well as ensuring that we are doing business in accordance with our contractual requirements.
Our company is comparatively small and nimble, and while I supervise an in-house compliance team of three, the legal team consists of myself and one junior lawyer who focuses on leasing activities. With a lean in-house legal team we engage outside legal counsel on almost all of our material transactions, although we do handle some smaller or management company-related matters and investments in-house. Since we often engage outside counsel, a large part of my role is acting as a liaison between the company and counsel to ensure that the legal documents give us the flexibility to effectively complete our business plan.
What led you to a career in-house?
In a way it feels like my in-house career fell into my lap, but the opportunity arose organically from my work as outside counsel. I was Savanna’s outside fund counsel (doing transactional work as well) at Goodwin Procter when I received an offer to go to Hunton & Williams which also represented Savanna on certain transactions and knew me from my work with Savanna. I was only there a few months when the Savanna managing partners realised that they missed having legal counsel who knew their business and could answer questions of any nature, in real time, so they convinced me to join the team.
While I never had real business-side aspirations, I love being in-house because I feel like the added information you receive allows you to be a better lawyer. It’s much easier to mark up joint venture and loan documents when you fully understand and appreciate how your client does business and what the intended business plan for the transaction is. As outside counsel I never really felt like I had the full picture. I also love being an adviser and working in an entrepreneurial setting like Savanna. It’s exciting to be part of a company that is expanding and growing.
In your current role, what is the most challenging situation that you have faced? What are the most significant challenges that in-house lawyers are likely to face over the next few years?
I really think that every transaction I do has different challenges and it would be hard to determine the biggest one to date. In every deal you are taking risks in order to get the deal done, and it’s always challenging finding that balance of what risks are and are not acceptable. As a firm we are known for moving fast, being reasonable and being able to understand and get comfortable with ‘hairy’ deals. That is one reason why people want to do business with us. This can be challenging since as a lawyer you are taught to identify all potential risks, and while most risks can at least be mitigated with diligence and compromises, I’m often forced to make the call about what risks are worth taking in order to get a deal done.
I think, other than legal liability – which is always a challenge for in-house lawyers and is tied to the constantly changing rules and regulations that one needs to keep on top of – striking that balance between being a deal maker verses a deal blocker is one of the most significant challenges. We will always be a cost centre and it’s important to mitigate risk while still being someone that senior management wants to use as a resource. You can’t mitigate risk if you don’t know what is going on. To do this, one can’t always say no, or the deal team will do everything in their power to cut you out of the process; but you can’t do your job effectively if you are always saying yes either. In order to handle this challenge (being an effective risk mitigator while still being a team player who works to accomplish the overall goals of the company – which in my case is doing deals) I’ve found that when I say no, which I do a lot, it’s best to have a compromise or solution. The most effective in-house counsel are the ones that are in the know and constantly consulted and you need to build up a certain level of not only respect, but also trust and admiration if you want people to actively involve you.
Are there particular types of legal issues that you routinely refer to outside counsel? And what kind of matters do you tend to handle in-house?
I handle all almost all employment matters in-house, as well as term sheets and ancillary documents (eg, small licence agreements, property management agreements, engagement agreements and service contracts). Almost all material transactions have outside counsel and we use a wide variety of outside counsel for particular transactions based on their expertise. That being said, I also handle everything before it gets to legal documents, like determining whether it’s a transaction we can even do in our fund structure, how deals could be structured to make them work and terms to offer potential partners. I also handle all legal aspects in connection with press releases, investor relations and other general business matters. I would say a large part of my job is advisory in nature as well – I have a seat at the table with a different focus than the investment team.
What do you consider to be the essential qualities for a successful in-house lawyer?
Again, I don’t think one can just be a great lawyer. One needs to be personable, quick on their feet, wear many hats and be able to act independently and make decisions quickly and strategically. I think one really needs to be able to trust their instincts and be able to stand up for the things that they think really matter (even if it’s an opinion that is not well liked).
What’s important for in-house counsel to consider when advising senior leadership?
Again, if you say no to everything that has any risk whatsoever, deals will never get done and senior leadership will look for ways to cut you out of the decision-making process.
I’m lucky that my senior leadership want to do the ‘right’ thing, which makes my job easier, but I still think it’s important to identify risks (there are always risks) but look for ways to mitigate them or determine whether the business case makes it worth taking those risks. Also have an opinion: outside counsel often raise red flags but rarely offer advice or solutions. It’s up to you to flag the risks as well but also to offer an opinion as to whether they’re worth taking.
How does the legal department contribute to your company’s growth?
We touch every aspect of everything the company does, and I’d say we contribute to growth by always being there to support our top decisionmakers and freeing up their time to handle other business-related matters. I also think having a strong back office makes investors more comfortable investing with Savanna, which is the only way we are in business.
With regard to your industry, are there any significant developments worth highlighting?
In the past year or so Savanna closed its largest fund to date, and acquired nearly $1 billion of property, including 5 Bryant Park, which is our largest investment to date.
If not a lawyer, what would you be?
That is a tough question since my parents and various other family members are lawyers, I grew up in Washington DC surrounded by lawyers and I’m terrible at maths. As such, it’s all I ever knew, and from a young age I always wanted to be a lawyer. That being said, if I won the lottery, I’d love to open a rescue facility for dogs. I’d have to win the lottery though since I’m terrible at asking people for money.
What did winning a Global Counsel Award mean to you?
Winning the award meant a great deal to me since it served as validation that even thought I constantly feel like I’m struggling to keep my head above water, my colleagues and peers recognise and appreciate the work that I am doing. When I was at a firm, I had a specialised practice, an arsenal of legal precedent and countless colleagues who I could turn to for guidance and advice. Now, in addition to a fund formation lawyer, I’m lenders’ counsel, financial services counsel, employment counsel, litigation counsel, leasing counsel – and I’m giving advice and making decisions in real time. As such, it is easy to feel overwhelmed and insecure that you don’t have the knowledge from past experience to back up your advice. To have respected colleagues and counsel validate the work that I have been doing gives me even greater confidence to trust my instincts, which I believe will make me an even better lawyer.
The purpose of the Global Counsel Awards is to identify those in-house counsel, both teams and individuals that excel in their specific roles. The primary aim is to reward lawyers for demonstrable achievements across the full spectrum of in-house responsibility, not simply those who have acted on high-profile transactions.