Pieter Gunst: [00:00:11]

Hello, everyone! My name is Pieter Gunst and I'm the CEO of Legal.io, and I am so delighted to be here today with Brian Mannion, the Chief Legal Officer or CLO at Aware. Brian has quite a storied history, having spent 22 years at Nationwide before his role at Aware I'm very excited Brian to get to spend some time with you and to dive into your journey so far a bit.

 

Brian Mannion: [00:00:42]

Thank you, Peter. I'm excited to be here. We've had some lovely pre-conversations. I'm very much looking forward to having this conversation today as well.

 

Pieter Gunst: [00:00:50]

Amazing. I really value your time because of course the role of a CLO is a very busy one, and so I'd love to dive right in and learn a bit more about your journey leading up to that role that is keeping you busy today.

 

Brian Mannion: [00:01:06]

Sure, of course. So, the concept of my practice of law has been a bit of an interesting journey. So I started out in compliance world way back in the day before most people listening to this were born. And when we did that compliance stuff, I focused on anti-money laundering and deposit compliance and sort of began learning. How do you manage risk, what risk looks like, and getting a certain perspective from a Midwest bank - and then I had the chance to go to Nationwide and practice law. And while my time at Nationwide was probably 15 years longer than I expected, I thoroughly enjoyed the opportunity to see so many things from a large Fortune 100 company, and I got a chance to really focus on probably three distinct areas, which is a little unusual. When I came over, I started focusing on privacy because Gramm-Leach-Bliley had just come out in 1999 and nobody really knew exactly what that was, although insurance rules had been around since the mid-70s much earlier. But GLBA was brand new and this concept of what is privacy and how do you notice and transparency was trying to be figured out and I was part of the team that got to roll that out. And then this crazy thing called the Internet was taking off and they needed everything.

 

Brian Mannion: [00:02:25]

People who weren't afraid of technology. And as we'll talk throughout this, lawyers for good reasons oftentimes are very cautious about technology and view it from a lens of concern and risk. Where I got a chance because of technology and a love of technology, to realize, well, I'm going to solve more things than I cause problems usually with new technology, and then we're going to do it anyway so I might as well figure it out. And then after doing some technology stuff for a while, you started getting into it. Unfortunately, 9/11 hit and I was the only lawyer that had that anti-money laundering background. So I got knee-deep back into anti-money laundering sanctions, compliance office, foreign asset control, which is part of sanctions, Foreign Corrupt Practices Act, terrorist financing, etc. So I got to spend a lot of time on that and then got to pivot back to I.T. And then we started doing a lot of information security so that privacy, information security is a big piece of my practice. The anti-money laundering sanctions I've been doing for a very long time. And then the real piece, the last 10 to 12 years was this technology thing. What is it? How do you implement it? How do you translate? A lot of technology is translating between I.T to law and law back to I.T.

 

Brian Mannion: [00:03:47]

There are two groups that don't actually speak the same language. And I had an opportunity to start figuring out how to translate these things between these two teams because interestingly enough, you'll find that technology individuals are sometimes more precise than lawyers are because technology folks live in very black and white, very zeros and ones, right and wrong, where we all live in the gray. We love the gray. That's where we kind of got brainwashed. We spent most of our time in the gray and now all of a sudden it's like, well, no, I got to go back to this very black-and-white answer because the technology people can't program for Gray. They can only program for zeros and ones or black and white. So that's pretty much my practice and what I've been doing. And I've got a great opportunity to see different things. For example, this crazy thing called "Cloud" was coming out. So we got to figure out how do we move to the cloud. This wacky thing called an iPad came out and personal devices. So I spent a lot of time literally, I got thrown in a room with a bunch of people and they said, don't come out until the executives can use their iPads because they want to use their iPads.

 

Brian Mannion: [00:05:01]

They're going to use their iPads. They're flexible, they're easy to carry. It's a great function to them. So they're going to use them. So how do we control that? How we manage the data. A lot of what I ended up doing besides translating was you can't bring money, compliance, and legal professionals to every single meeting. So I would get very conversant on the requirements of record retention, requirements of e-discovery, and the requirements of line of business issues such as claims issues or state insurance law issues nationwide sold securities products. So again, FINRA SEC obligations - so I would pay attention to all these. I do a lot of relationship-building. They would teach me what I what I misunderstood, and then I'd be able to take those basic requirements back to I.T. and begin work through how do we meet these basic requirements. And then I'd be able to take gaps back to the legal team to talk through like, okay, this requirement you identified just can't be done. What else could we do? And, and have those negotiations and back and forth and that's what. I think was probably the most beneficial part of my job is I then got to spend time understanding risk and what is the real risk.

 

Brian Mannion: [00:06:21]

Not all risks are created equal. Not all risks are going to have the same violations of law. They still may be illegal, but some risks have greater risks to the company than others. And some of the risks, frankly, are because we don't understand the technology yet in the world I live in now, I'm dealing with collaboration space and dealing with Slack and Teams and Workplace by Meta and WebEx and all the different tools that you can now have business communications in that used to be an email or those tools aren't even things that were used five years ago. So court cases that are being litigated today aren't going to these data sources for those business communications. They're still going to email. So I'm in the business of helping people understand how do we apply these rules, these controls to mitigate risk with the new piece of technology. So that was a long-winded answer to your question, like any good lawyer, Sorry, but that's the world that I lived in. The concept of different perspectives and different risks. And the ultimate goal is how do I help the business achieve their objective and how do I help them make an informed business decision because it's their risk to take ultimately, not mine as the lawyer.

 

Pieter Gunst: [00:07:39]

Right, and it's very fascinating to hear this kind of focus given the type of roles you're in, your background in compliance, privacy. And that paired with like a massive technological shifts over the past like decades. And so I definitely want to loop back to kind of this risk tolerance because it's a big part of the job. But before we do so, I want to understand a bit more about, you know, this transition then eventually to the CLO role and what a typical day for you looks like now given that set of responsibilities.

 

Brian Mannion: [00:08:15]

Yeah, it's certainly something I spent time talking to other close. I've been blessed with the opportunity to meet a number of general counsels and even still connect and speak regularly with the former general counsel at Nationwide who've had experience, who have done these things and speak to them about, okay, it's one thing to say you want to be in the seat, it's something else to be in the seat and what does that mean and how do you manage these different risks and how do you manage people and how do you manage the relationships with the executive suite and manage the relationships with the board? And when do I actually get to do legal work? And so there is a different perspective. I have a good friend of mine that says, "you stand where you sit" and I'm now sitting in a different seat. So what issues do I stand for? What things do I really get focused on? Because when you're a lawyer focused on a particular subject, technology, then the world looks totally different than when you sit in a different seat and now you're managing both the technology, legal risk. You're also managing the company, you're managing quarterly sales, you're managing all these different views that are influencing what risk a company should be dealing with and thinking about. So my day consists of, thankfully not as many meetings as the world I lived in previously. I had a wonderful administrative assistant who was so kind and took care of me probably more than she wanted. But Rebecca would spend a lot of time scheduling me from eight in the morning, all the way through 5:00 at night.

 

Brian Mannion: [00:09:52]

We'd have multiple meetings at the same time and we figured out which meetings I'd go to, which meetings I wasn't going to go to, and it was exhausting. I don't have that in the same way now. I have maybe 4 or 5 meetings, scheduled meetings a day. And then what I found is 20 walkout meetings. So I end up doing context switching much more than I ever did, and that becomes something you have to kind of slow down and go, okay, wait, it's all right to ask a question. It's all right for me not to immediately be conversant in something when this individual who this is what they've been doing, they handle lots of issues as well. But they've been focused on this problem, they're looking for my guidance. They come up, they immediately launch into it and sometimes I can immediately launch back. And sometimes I'm like, slow down. I was just over here in Alaska, and now you've just asked me to talk about, I don't know, something in New York City. You got to catch me up, and it's okay! It's okay to say, and we've always said this, but it means even more now "It's okay to say, I don't know". It's okay to say I don't know the answer to that. Let me think about it. Let me research it. Let me get to my team. I've got a team now of people that have responsibility, that have expectations that they want to do a performance. They want to be really excellent at certain areas of law. Let me get with those experts and then let me get back to you. And that's a lot of my day is trying to manage relationships in a way that I haven't had to do previously, I had a lot of experience at it in that prior role for 10 to 12 years of just doing these relationship managements between different people.

 

Brian Mannion: [00:11:35]

But at the end of the day, what I got to do now is it's different levels of relationships, which is exciting. And then it's a lot of trying to help the business make informed decisions, whether that's in a formal meeting, whether that is in a walk-up where someone just comes to my desk because I don't have an office, I don't have a cube, I have a desk, which is a little weird at first, but now I like it. I can't imagine being in a big office like I may have used to. I miss being able to play a radio and I could just listen to what I want without my earbuds in. But I love being in the excitement and the energy. And sadly, I'm not one of the younger ones here. So there is a certain excitement and energy at a startup that you feel when you're sitting amongst everybody. So it's a lot of trying to understand where do I focus next? And again, how do I drive, how do I help the business drive their objective. We are a great company with a wonderful product, with an exciting future, but it's still building a business and therefore you've got to focus on building the business, not just managing the risk. That's part of the equation. But you can't overindex on the one to the detriment of the other.

 

Pieter Gunst: [00:12:51]

Yeah. And you really turn from like someone who's a trusted advisor in a law firm context to someone who's a broader steward of the business, and cannot just look at the legal risks anymore, it needs to make more aggressive trade-offs. And what you mentioned earlier around the importance of communication there as well resonated a lot, especially like my experience working with engineers as you know, coming from legal training has been similar to yours in that I've been somewhat surprised sometimes by the level of precision going beyond even what I deem like. This is the threshold because that mindset is so geared towards that and it's just one of the interactions like another one being a sales team, they really got to kind of learn that require different communication and so super fascinating to hear you talk about that. What would you say like in this role or maybe in Nationwide that your option like stood out as the challenges or maybe the key challenge and what's something you learned from it along the way?

 

Brian Mannion: [00:14:06]

To reply that the key challenge in the current role is trying again to do that context switching. It is not easy when you're the general counsel. You're now focused on issues I've never even contemplated. So as an example, I consider myself or did until I came here, an expert in the anti-money laundering field. Now, my definition of an expert is someone who knows what they don't know because you're never going to know everything. But I've done it for 25 years. I was there when wasn't there when Bank Secrecy Act was passed but I was a little closer than I'd like to admit, and therefore I had a history. I understood how the risk had been evolved, how the the concept behind it, you know, at the end of the day, anti-money laundering and all those rules are designed to make the laundering of money more expensive and then hopefully to try to prevent or identify money launderers or terrorists or whatever the case may be. Having that history gets you comfortable with what the risk really is, when you don't have a history, when you don't understand the law, when you've never looked at it before, until someone comes up to you and says, Hey, we need to do this thing, can you go tell me what it is? And you're like, Well, I don't even know what that is.

 

Brian Mannion: [00:15:26]

And then you've got to quickly get comfortable with being uncomfortable, which is not something we as lawyers like or many people like. And we also have to get comfortable with not committing malpractice because that's really important to me as well. So how do you dig into a subject? How do you get enough information? How do you know when to go outside counsel, when to go to an expert, when you can look at it yourself? And that became the biggest challenge that I have to get comfortable with is to understand that there is a level of uncomfortableness that you have to get more comfortable with the silly phrase, but it has resonated with me a lot because I need the business to help make an informed decision. But I don't have 20 years to become an expert at something to answer it. And you mentioned outside counsel; our outside counsel friends are fantastic. They're great helpers. They are the experts. I can get to them sometimes; they cost way too much money, but that's a whole different podcast. But at the end of the day, I need to get the right outside counsel who can give me that pointed advice and cut through the nonsense. And that is a challenge. You got to work to find those right individuals. You have to find the right tolerance that they have and make sure you're aligned on those tolerances.

 

Brian Mannion: [00:16:45]

I was blessed. Soon after I arrived here, we had a great opportunity. We got a preemptive seed round led by an amazing company with Goldman Sachs. And now I got the pleasure of managing an investment round. And I can tell you, I don't know what any of those words meant, either preemptive or c, a few days before I got here because it just wasn't the world I lived in. So I had fantastic outside counsel that was able to offer guidance, direction, hold my hand, point me in places, and let me push back on them so that they would help guide me. And while I'm by no means a securities expert, I would never pretend to be one. I've gotten more comfortable at understanding what I need to look at because I've been through it. And as we move into our next funding round or the next financing, whatever that is in the future, then I've got more of a comfort level that I know what I know a little bit better now. So it's a lot of trying to understand in my mind what's the best way to help the business achieve their objective and manage the legal component of it and get comfortable with areas that you've never touched before.

 

Pieter Gunst: [00:17:59]

Now, honing in a little bit on this idea of risk tolerance, you went from Nationwide, which is like this like iconic brand, a large organization to a startup environment or more of a start-up environment, for sure. Does that mean that there is a huge shift in tolerance? Is that risk tolerance shift? Does that mean that you are relying on different set of outside counsel or different kinds of outside counsel? Does that shift a lot?

 

Brian Mannion: [00:18:32]

Yeah. Well, the biggest shift again at the end of the day is that from my seat, I'm immediately - as compared to my prior seat, I'm immediately at the table with all the strategic decisions and therefore trying to help provide a framework and the obvious or maybe not so obvious, but the risks that we need to take into mind and under consideration as we make a business decision. So the velocity of decisions becomes much quicker because in the startup world, you can get three people in a corner of a room over a coffee in the morning and you can decide a whole product launch. Now it's a bit of an exaggeration, but you can make some decisions really quick about "I want to go do this. I want to mark it here. I think I want to return my go to market in this direction, and you're all sitting around the table, and you can make that decision". Now, there's a lot of homework you have to do before you make it, but the business has really done their homework, and we're ready to go execute. Larger companies, you have a - the phrase I've always heard is you're trying to turn a battleship or an aircraft carrier on a dime, and you can't. There's a momentum. Even if you put the engine to full reverse, the weight and size of the machine is going to move it forward. And you've got to change the momentum because we're much smaller and much more nimble.

 

Brian Mannion: [00:20:04]

The ability for us to change direction or to augment a strategy is much quicker. And that means that you have to be more available. You have to be ready to get involved in something, and you have to probably work the longer hours than you've ever worked because there are more decisions and more things that you have to get through to help the business make that informed decision. And therefore, the risk tolerance modifies a little bit. You know, if the risk tolerance for a significant Fortune 100 company is that we want to avoid these types of litigation or these types of issues because we're a Fortune 100 company and because everybody knows us, that's a different risk tolerance, I'm not a deep pocket. I barely have a pocket. So and I'm not as well known as a Fortune 100 company. Now, I will be one day, we will be a great company that everybody's going to know about because everybody needs us. But at this point, we're not. So therefore, the risk tolerance becomes different. Your ability to manage certain risks, and the ability to address certain risks have a different way of doing them. You can move the ship much quicker because it's not an aircraft carrier it's a nice, nimble, great, wonderful ship that can move much quicker, whatever that ship would be with my stupid analogy because I don't know my ships, right?

 

Pieter Gunst: [00:21:30]

Speedboat?

 

Brian Mannion: [00:21:31]

Big! Speedboat that work. A beautiful banana speedboat that's really sleek and runs great. Yeah, whatever!

 

Pieter Gunst: [00:21:40]

Yeah, but I do like the analogy. And indeed, like, turning a big organization is very hard. And the fact that you have information flow on the speedboat that's like much tighter does allow you to really turn around decisions at a very different pace.

 

Brian Mannion: [00:22:02]

Another good example though, that I think applies to both organizations is outside impacts. So, um, nationwide, for example, when I got thrown in that room to do those iPads, we had this fantastic solution. We had a bill, everybody was on board. We agreed, and then we presented it to leadership because, again, large companies, you've got multiple layers you have to work through appropriately. The day we presented it to the highest layer of the great organization was to make the decision and make some risk. The assumption was the day Steve Jobs announced the creation of the iCloud and completely blew up all of our controls. And that's the thing that you then have to always realize that it's always changing. And it's the same thing I've got here. We do a lot of machine learning or AI as people love to call it, and there's a lot more rules and regulations coming around AI and every time we turn around, there's a new piece of AI, proposed regulation, proposed guidance, whatever the case may be, be it overseas in Europe or local, that you got to think about, how does this apply? What sort of tweak do we need to make? To your point, my speedboat can make those tweaks much quicker and my speedboat is much smaller because I'm a smaller company. I've got a smaller footprint so I can understand where that footprint is, where that risk is, where I can make my changes, and then keep going forward. When you've got a huge company, it takes longer to do the due diligence to see all the different tentacles because I don't know as many tentacles. I'm not selling 25 different products. I've got one product with different facets of it that are understood and known. And within our grasp, as opposed to being all over the place as a large Fortune 100 would be. 

 

Pieter Gunst: [00:23:49]

Right. Now, what stands out for me there, and I think is interesting, is that I'll keep with the boat analogy, and it's that you "on a boat" or any vehicle really, you might have to tolerate a certain amount of defects. It's no one's fault, but it's just like how it goes with boats. And so especially what you were mentioning about the technological evolutions. And I think now, okay, the AI stuff is on everyone's minds, but it almost feels like you're in this ongoing battle. You're never going to quite win it because that one junior engineer did paste two pages of the source code into this.

 

Brian Mannion: [00:24:32]

ChatGPT. Yep. Right.

 

Pieter Gunst: [00:24:33]

But you're constantly running and trying to pick where you allow leaks to happen and where you have to plug them first. Which I think is inevitably the challenge for every legal professional. But then of course, if you are in the leading seat because the buck stops with you and you're the one who in the end has the responsibility. It's a different set of trade-offs as well.

 

Brian Mannion: [00:24:56]

Yeah, it really is. Technology is always moving fast, and you can't ask for perfection. I had a conversation with someone today about this long, long time ago. My job was working at a local mortgage company while I was in law school, I was filing the mortgage file. Back in the day, you did a mortgage file, was 800 pages and signed all of them. You created a file, you put it on a shelf, and the regulator would always show up and give me my sample of ten mortgage files for Love of Pete. They would always pick three that you can't find. They just got this innate, innate ability to identify your misfiled human nature, make a mistake, can never have perfection. Those are the ones that they file. And it taught me early on that I, oddly enough, was pretty good at figuring out missed files, you know, which number do you switch? I have no idea why, but I could always find I could find most of those files. But what it really taught me was perfection doesn't exist, and if you're trying to be 100% compliant with anything. First off, I have to ask you, is that really your goal? Is the goal 100% compliant with Thing X, or is your goal to be a successful company? And it's not because a company is trying not to comply. It's not because a company is trying to avoid the law, not comply with the law - or violate the law. Of course, no human beings are human and they cannot be 100% accurate all the time. So what's your tolerance, and what sort of controls do you have in place? And let's spend time talking about what the company's acceptance of that tolerance is.

 

Brian Mannion: [00:26:40]

And this came up a lot in the anti-money laundering space, and this concept of modeling and modeling identification and validation because you have false positives, you have false negatives. If you're trying to have 100% compliance, I could build 5,000 people and still only be at 99.999%. A hundred (100%) is really hard. Well, what's my diminishing return? Maybe I only found one more potential investigation I needed to do for 50,000 people to solve that. Well, is that rational? And those are really the discussions I think you get into is - everybody wants to comply. Nobody wants to discriminate against anybody. Nobody wants to cause anybody to feel uncomfortable coming to work. But there are people and people will do things that cause challenges you have to work through, and that's the nature of the beast. So you're focused on processes, on policies, on procedures, on technology to identify those, and then you work through them. But if your goal is 100% of anything, well, that's a really hard, hard goal to achieve. If your risk tolerance is I must be 100% accurate and correct all the time, and for certain things that's accurate. Depends on your industry. Right? We don't want airplane pilots to be 99% safe. We want them to be 100%. So there are times you have to then build your tool and your boat to be that objective. And that makes sense. But that doesn't apply to every single role for a pilot. Some roles they may have different views on because it's not a safety question. Right. And that's really what you're indexing for.

 

Pieter Gunst: [00:28:28]

Right and yeah, in a world that's becoming more and more complex every single day, more and more international, more and more viral legislations, it's a job that's becoming not simpler at all.

 

Brian Mannion: [00:28:43]

No, no.

 

Pieter Gunst: [00:28:44]

Brian, I'm so grateful for you sharing a little bit about your journey. But also, I think these very real trade-offs that are core to your job. I've found it very enlightening, and I just want to thank you for spending some time together and for sharing this with the community at large.

 

Brian Mannion: [00:29:00]

My pleasure. I appreciate you having me. I got the chance to watch some of these videos, and I've enjoyed it. And getting a chance to have this conversation with you is very much appreciated. So thank you very much.

 

Pieter Gunst: [00:29:10]

It's such a pleasure to learn together. Thank you, Brian.