GoCardless' CFO on how legal can enable finance

In this series of interviews with legal's key internal clients, we learn all about what they want from their legal colleagues, and what effective collaboration looks like. Read the whole collection here: Enabling The Business.

Catherine Birkett is the Chief Financial Officer at GoCardless. GoCardless is the scaling fintech aiming to revolutionize B2B payments around the world. Before GoCardless, Catherine was CFO at telecommunications company, Interoute.

Before you worked with lawyers, what was your perception of them?

I had several friends who were lawyers, and I thought they were highly detail oriented and would always err on the side of caution rather than thinking commercially.

How has your perception of lawyers changed?

I’ve worked with some incredible commercial lawyers since I formed those early impressions. There are some amazing, talented lawyers around that genuinely understand the balance between enabling the business and mitigating risk.

They’re still detail-oriented, and rightly so - it’s fundamentally their responsibility to make sure there isn’t anything in the small print that might catch the business out further down the line.

How often do you work with legal at GoCardless? On what kind of projects?

We collaborate on a variety of tasks together so there’s always a stream of daily communication.

In terms of projects, it could be:

• Fundraising
• Enabling sales to close deals
• Reviewing contracts
• Discussing how we sell into our merchant base
• Exploring how we accept liability clauses

And then because we’re a regulated business, there’s plenty of work we do together on the compliance side.

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In what kind of situations would you turn to the legal team?

In France, the signing of our accounts was delayed, which impacted the French regulator, ACPR. The first thing I did when I realized that was happening was ping our Chief Legal and Risk Officer, Ahmed Badr.

I went through the approach we were going to take to resolve this, the comms with the regulator, and so on. Ahmed and I were able to align on our plan moving forward.

This is a recent example, but situations like these arise on a regular basis - something will always crop up. Legal and finance need to decide together whether it’s worth accepting the risk or not.

It’s important that legal teams differentiate between the risk that we’re willing to accept, and the risk we need to address and mitigate

How does that decision-making process work when it comes to accepting risk?

Legal will flag the risk. The final judgement call sits with me - but if I ever needed to, or I felt uncomfortable with the risk we were taking, I would approach our CEO to get sign-off.

Finance often sits between legal and risk, and the commercial side of the organization. People sometimes think that finance is the real guarder of risk, but I don’t think that’s true - we need to assess the risk that’s being presented to us, and figure out where we stand when it comes to enabling the commercial teams.

Find out more about risk appetite here.

What can legal do to enable you to do your best work?

Having standardized contracts is really useful. If you want counterparties to sign deals quickly, you need contracts that don’t invite negotiation, and are easy to sign.

It’s also really important that in-house legal teams differentiate between the risk that we’re willing to accept as a business, and the risk we need to address and mitigate.

Legal needs to be able to approach me and say ‘technically, we need to do X, Y and Z - but we can get away with focusing on X and Y, and protect our risk against Z by simplifying the process’. That’s an ideal scenario.

What kind of soft skills do lawyers need to work effectively at a scaleup?

A great in-house legal team:

• Is open to communicating with everyone
• Is willing to learn and adapt
• Understands the commercial side of the business

They can’t exist in a bubble, only dealing with legal matters and not engaging with the rest of the business.

Legal also needs to understand that the work we do is challenging from a legal regulatory perspective because it’s new - the rules weren’t written with fintech scaleups in mind.

As technology continues to advance, having that open mind is essential. The legal team at GoCardless does this all incredibly well.

Finance can keep legal posted on projects that will need their involvement, instead of springing tasks on legal at the last minute

And what would poor collaboration look like?

Poor collaboration would be back-and-forth email chains in which legal is looking at the challenge with a ‘black and white’ mindset, or a situation in which legal is saying no without offering alternatives or explanations as to why we can’t do something.

Stilted communication can be a huge issue; any time a lawyer gets caught in email chains, and doesn’t want to jump on a call or change the method of comms to speed up the resolution, it’s extremely painful.

What can finance do to enable legal?

Finance can keep legal posted on projects that will need their involvement down the line, instead of springing tasks on legal at the last minute!

I always tell my team that the rest of the organization is our customer - so we need to be receptive, willing to collaborate, and willing to engage legal on upcoming projects ahead of schedule, in order to respect their time.

That chain of communication is a must-have to help the business scale successfully.

Enjoyed this interview? Want to hear from other C-suite leaders on how they interact with legal? Read the collection in full: 'What the business wants from legal in 2023'.