‘Having a culture of innovation in a law firm is unusual. Many lawyers are trained to be risk averse.’ While our next professional keeps a laser focus on the changes affecting his financial services clients, he also drives innovation in his own law firm, Murphy & McGonigle.
Here, James Murphy, Chairman and Co-Founder of Murphy & McGonigle, a US based boutique securities litigation and enforcement law firm, talks about the inspiration behind his career path, the importance of knowing your client, and keeping up-to-date with the latest regulations and directives, and gives insight into the firm’s innovative projects and future goals.
What led you to embark on a career in the legal profession? What draws you to your specialist area of financial and business litigation?
Well, I usually say it’s in my DNA. My father was an attorney and law professor. He served in the US Army infantry during World War II and stayed on at the conclusion of the War to assist in the war crimes prosecutions at the Dachau prison camp. He ended up working on the prosecution team with Leon Jaworski, who much later served as the Special Prosecutor for Watergate. My father went on to criminal defense work in the States after returning from the War and, thereafter, served in several posts as a law professor. My sister followed directly in those footsteps, working briefly in private practice, after graduating from Yale Law School and then going on to become a law professor. She was also briefly an Academic Visitor to the Oxford University Law Faculty.
So, as I say, it must be in my DNA. I never seriously considered any other profession. Upon graduation from the University of Virginia and Vanderbilt Law School, I headed to Los Angeles, California to start my career. After five pleasant years, I returned to Virginia, worked at a large multi-national law firm, and ultimately decided that I wanted to try my hand at starting a different kind of law firm; which brings us to 2010, and the inception of this firm, Murphy & McGonigle.
If you never chose to be a lawyer, what other profession might you have pursued and why?
I think most litigators are built with a strong competitive streak, but we all discover at some point that we are not going to be able to play sports professionally, so we have to find some other outlet for that competitiveness. For me, being a litigator has been quite a good answer. At trial, there is almost always a winner and loser and that is what drives us to out-prepare the opposition. We all want to deliver a great result for our clients in every case, but underneath the surface for me is a real dislike of losing. But, to answer your question, had I not become a lawyer I would probably have tried my hand at being a writer of some variety, perhaps a reporter.
You also advise on compliance issues; how do you keep informed and abreast with all the latest legal changes and updated regulations?
Great question! This is an essential element of who we are as a firm. We constantly scan the regulatory and litigation landscape for emerging risks or challenges for our clients. As an example, when we see new rules proposed and put out for comment by the SEC, we typically assign one or two of our lawyers to become experts in the subject matter. We produce an annual report to our clients and friends of the firm each year that is entitled ‘Looking Forward’, which includes observations from all of our practice groups about what we think may lie ahead based upon the securities regulators’ priorities and emerging trends in financial industry litigation.
What would you say have been the most valuable legal experiences that have brought you to where you are today?
I was incredibly fortunate to start my career at a boutique securities litigation firm in Los Angeles, where I received tremendous mentoring. The lawyers there all shared a singular commitment to excellence in the work they did. There was an unstated ethos that emphatically rejected the “it’s good enough” standard. Every brief, every piece of correspondence going out the door, every internal memo, had to be perfect. For a newly minted lawyer, that was a high bar to maintain day to day. I also learned from the examples of the partners there that you never compromise on ethics, never take a short cut, and stay out of the grey area. These lessons have guided my career and stuck with me for 25 years, and I feel an obligation to pass on these lessons and values to the younger lawyers in our firm.
With plenty of experience behind you, what advice would you give future potential litigators and lawyers looking to defend financial institutions and financial services firms?
The advice I give young lawyers is not unique to litigators. You should strive to become a “trusted advisor” to your clients. You can only truly become a trusted advisor by gaining intimate knowledge of the clients’ business and the industry within which it operates. It is not enough to know that a bank has to comply with Anti-Money Laundering regulations. You need to understand completely how your client goes about complying with those regulations from an operational standpoint and you need to know how other banks do it. Reading the regulations and commentary is not nearly enough. You need to sit down over lunch, or when traveling with a client, and really learn how things work within your clients’ business. If your clients start looking to you as a trusted source of information on best practices in the industry when it comes to legal and compliance subject matters, then you know you have accomplished something. Those relationships are durable and are some of the greatest rewards of this profession.
Do you have further future goals? Are there avenues you still wish to explore in the global legal sphere, in particular in the business-legal world?
My professional goals are, of course, intertwined with those of the law firm. We are committed to continuing innovation in our industry. Having a culture of innovation in a law firm is unusual. Many lawyers are trained to be risk averse. At Murphy & McGonigle, our partners have made an all-in commitment to innovation which makes me optimistic about the future.
We have created an Innovation Lab at our firm, which serves as a one stop shop for development of new solutions for our clients. We have on staff a full time computer coder who translates lawyer ideas into actual tools for our clients. For example, through the Lab we developed a relational database for all mortgage-backed securities litigation that marries up data about the mortgage backed trusts involved in litigation with information about the ongoing litigation itself, so that clients can gain a broader view of the landscape. That database captures data on every mortgage trust involved in litigation anywhere in the US. We also have enforcement apps and other tools in development that will leverage technology to automate certain regulatory compliance functions that are currently very manpower intensive.
We also need to be constantly in sync with our clients. There has not been a time in my career where the financial services industry has experienced as much change and innovation as we are seeing now. Concepts like ‘Robo-advisers,’ the proliferation of alternatives to cash and credit cards for consumer purchases, and the coming ‘Blockchain revolution’, all bring with them legal and regulatory challenges. I am convinced that the law firms that can help clients overcome these challenges and seize the incredible opportunities that are brought about by all this change and innovation will find themselves in extraordinarily high demand. We intend to be in that small group.