The pandemic presented both challenges and opportunities, especially for high-velocity fintechs - how did Revolut's legal team balance these challenges in a time of uncertainty?
Tom Hambrett is the General Counsel at Revolut. This is a chapter from our eBook 'GCs & the pandemic: how legal responded'.
Do you remember when you first heard the word ‘coronavirus’?
I was in Switzerland when I first realised how serious the pandemic was. The resorts were all closing around us; Italy went into lockdown first, and then France and Austria started closing their borders and preventing people coming in. We were on one of the last flights back from the EU to the UK.
When things started to escalate before the first lockdown, what were your initial concerns and priorities as a GC?
When news of a lockdown first broke and we started to take stock of what was happening, there were many different work streams we had to focus on and prioritize; both for myself leading the legal team, but also at a leadership level.
The first workstream, and perhaps the highest priority, was the safety and wellbeing of all our employees. The second was around business continuity; how do we keep moving through this crisis?
We embarked upon a scheme with our operations team to cover cost optimization and cost efficiency. When we saw a huge dropoff in travel and expenditure overseas, the inevitable byproduct of lockdowns and a raging pandemic, we looked at ways in which we could sustain our business.
The third revolved around revenue - how we could sustain and support revenue streams that were contingent on travel? We had multiple products at this stage, beyond foreign exchange: crypto, commodities, stock trading - and they all fortunately stayed buoyant during the initial impact of COVID. Even though the FX offering wasn’t busy, people were still looking for alternative investments like crypto, and as a result, we saw a huge spike in business signups.
COVID accelerated the decentralization of the legal team, and we wanted to avoid a separation mentality
Did that change the work you had to do? How?
Yes, massively - all our projections and everything we committed to for 2020 needed to be reviewed to reflect the review of our expenditure. This involved a lot of renegotiating, cutting and repositioning our commercial priorities and looking into how we would document and transact in all the changes.
We completed a $500m equity round and an $80m extension two months later - and of course, that meant that corporate and commercial work skyrocketed, so we were super busy. It completely changed how our employment lawyers worked too. They collaborated with HR business partners to roll out performance reviews, consultations for furlough, remote working setups and redundancy packages where necessary.
It was important to review everything, from the obvious (can we make sure employees are well-equipped for remote work?) to business decisions around consolidation of growth initiatives and the review of possible expansion markets.
The wider legal team was working more frequently with products that were still generating revenue, which required a lot of regulatory analysis and insight - which we were on hand to offer.
What were your main priorities in supporting the business? How did they differ from what you’d planned to be doing in 2020?
We set our roadmaps based on what the business projected as its top priorities. So when it appeared that the plans we had in place wouldn’t go ahead, we had to execute a hard reset on our timings, projections and priorities.
Instead, we invested in internal projects to make ourselves more efficient and ensure we were still assisting the business in any way we could. We had to find new ways of collaborating.
At the same time, the Brexit migration was underway, so we had to focus our time and resources towards moving EU customers away from our UK entities. We were fortunate in that our plan wasn’t deterred by lockdowns.
When it became apparent that this was going to be a long-term issue - did that change things too?
It didn’t change things in terms of how we supported the business. Within legal, we were already looking to establish an international legal hub that offered full-time support and services for lawyers in different timezones.
Being such a distributed team, with reach from across Europe, to the United States & Tokyo and down to Melbourne in Australia, we were able to provide 24/7 support and legal advice, but it also meant that at times we found it difficult for us all to connect and catch up on our day-to-day work!
We set out to help our lawyers across multiple time zones - and COVID seemed to accelerate that priority, especially as lawyers left our HQ office in London to return home and understandably spend this difficult time with their families.
COVID accelerated the decentralization of the legal team, and we wanted to avoid a separation mentality, where each legal team exists in their own sub-department. We still wanted to be united, and so we figured out a way to do it remotely, with lean, specialist support staff.
Aligning on every potential would-be legal challenge for customers is always tricky. There’s also a level of complexity added with GDPR and the information we can share, and a growing concern around customer growth
Confronting this kind of uncertainty - a ‘Black Swan’ event - is a pretty unique challenge. What was your expectation about how it would affect a fintech business?
I think the way fintech was affected by the pandemic depended on, obviously, the type of business, but also the area of the business. Contracts are a good example - the uncertainty seems to make it challenging to navigate the environment around contracts.
When you’re terminating or renewing contracts, for example, there’s a greater drive now than ever to come together and align commercially. When it comes to providers, there’s an opportunity to test the bonds of your relationship and the levels of understanding with delayed payment terms, as an example.
But I think it’s actually one of the better ways to develop - the chance for each of us to do something new and challenging and in an environment where, because it’s a ‘Black Swan’ event, there’s no “right way” to approach an issue or arrive at a desired outcome.
Did this crisis change how you work with the senior leadership team? Did they have different concerns from usual that you, as a GC, needed to support them on?
I’ve always had a good relationship with the senior leadership team, and the crisis made us more committed to being in sync, catching up more frequently, and organizing Zoom or hangout sessions at least once a week.
It didn’t change much around my dynamic with the leadership team, though obviously the sudden transition to working from home impacted KPIs and company goals - but that was more a reflection of external issues than internal shortcomings.
When it came to fundraising projects, we kicked off the preparation in 2019, and reached a position in January where everything was complete and ready. This was before we knew how bad things were going to get in the UK.
We closed our $500m Series D in a matter of weeks before the first lockdown in March 2020, and then a secondary transaction, with an $80m extension to the round. For us, the secondary investment was a vote of confidence; it’s a strong message that investors were keen and that the process was managed smoothly
More and more people turned to challenger banks as a way to manage finances online during lockdown - did that present any challenges for the legal team?
Aligning on every potential would-be legal challenge for customers, across the huge variety of locations and channels that we serve, is always tricky. Legal works more frequently with product, regulatory and compliance teams now.
There’s also a level of complexity added with GDPR and the information we can share, and a growing concern around customer growth - an increasing customer base means an increased risk around data protection, security breaches, privacy, and so on.
It also means there’s a jump in inbound queries, compliance questions, etc. so we’ve had to scale our operations in support and compliance to handle the volumes. Our customer and supplier support operations are in Portugal, Poland, India, and we’re also looking to hire in the Philippines. We need to make sure we can offer 24/7 support for our customers in different timezones.
When something like this happens, it’s definitely painful - but it’s important for legal to double down on the pain and grow from it
What do you think are your key learnings from the past year?
There’s an old saying about not wasting a good crisis, and I definitely learned the value of trying to make the most of a bad situation! Looking back, when something like this happens, it’s definitely painful - but it’s important to double down on the pain you’re experiencing and grow from it.
Build on your existing team, processes, routines and systems, as a result of the pain and frustrations of an uncertain environment. I’ve been speaking to the founder for so long about quantifying legal risk, how contracts work, risk scoring for third-party vendors, risks we’re willing to accept, and more.
These pet projects facilitate and enable the business to move quicker, but aren’t in your day-to-day vision, so they get sidelined at times. But if you don’t really have optimization projects as a line in your ‘to-do’ list, COVID will quickly expose this! Make sure you don’t waste the fear and the drive the crisis brings to fix these things, and embrace pain as an opportunity to grow and get stronger.
How do you see legal’s role in being ready for the bounceback?
We’re now looking to strengthen our brand presence. I’ve made it clear internally that business priorities and legal priorities need to align - and this means recalibrating benchmarks, retaining talent, and changing the role GCs play in the legal function.
I’m hoping the GCs role will expand, so GCs can enable the department to thrive, instead of helping the department survive. I hope the business will help GCs plug into different areas of the company, so they can really identify their interests, their strengths, their weaknesses, and map out what they want to do.
And finally, businesses should give GCs the opportunity to pull different levers they’ve had to set up as a result of COVID. Those relationships you’ve had to pause, for example, or those processes you’ve had to implement, that COVID was the catalyst for in the first place. It shouldn’t be a case of packing up and returning to pre-pandemic normal once lockdowns have been lifted - instead, use everything you’ve built on through this pandemic to enforce the role you want to (and should) play as the GC.
Tom Hambrett is the General Counsel at Revolut. This is a chapter from our eBook 'GCs & the pandemic: how legal responded'. Download it today to hear from legal leaders at some of the world's fastest-growing businesses.