Don Kennedy was recently named chairman emeritus of the First American Corporation. Here’s a look at his career, which spans more than half a century of visionary leadership and dedicated service.
If there were such a thing as a Title Industry Hall of Fame, Donald P. Kennedy would certainly be one of its first inductees. Kennedy’s lifetime of achievement encompasses building a small, local title company in southern California into a Fortune 500 company and one of the largest title insurance operations in the nation. It includes years of service to furthering the industry through leadership in its trade associations. And it embodies a lifetime of giving to the community.
The Early Days
The grandson of First American’s founder, C.E. Parker, Kennedy joined First American as associate counsel in 1948 after completing law school and serving in the U.S. Navy in World War II.
During the post-war era, southern California experienced a real estate boom that quickly propelled First American into becoming the largest title company in Orange County, CA. Kennedy quickly saw the need to serve the area’s large builders and customers, or the company might be swallowed up by those who could. So he convinced his board of directors to acquire operations in adjacent Riverside and San Bernardino counties.
|Kennedy’s Peers Speak Out|
The company then began acquiring title businesses, first in neighboring states, then the East Coast, and finally states in between, leading First American to become one of the largest title insurance companies in the country. The company went public in 1964, trading on NASDAQ until 1993, when it moved to the New York Stock Exchange.
First American’s expansion into global markets began with Mexico and the United Kingdom. Later, First American became the only title insurance company in Australia, the largest in Canada, and the first in South Korea and Hong Kong. The company was also the innovator of the world’s first international title insurance policy.
“I can think of no executive who has done more for any company,” says Parker Kennedy, Don Kennedy’s son and chairman of the board, president and CEO of First American. “Under his leadership, the company moved into new states, new countries, and new businesses. Through it all, he has been a tremendous boss to us all, and we are fortunate that he will continue to provide counsel as a board member.”
An Innovator for Change
Very early on, Kennedy was committed to the idea that the title process could be much more responsive to its customers. As he rose through the ranks at First American, he worked to integrate advanced information technology that made the title process faster, more accurate, and less costly. As a result, order processing that used to take two or three weeks was accomplished in days. Over subsequent years, the processes that had been reduced to a few days’ time came to be done in minutes or seconds.
As First American grew, Kennedy foresaw the need to diversify, and engineered the acquisition of a trust company, a home warranty provider, and a real estate tax service firm. Further efforts led to the acquisition of a collection of fast-growing businesses not subject to real estate cycles.
Kennedy built a reputation for knowing when and where to expand and how to attract the right people. He initiated a decentralized system of management to give his people the autonomy to run their company or division as if it were their own—a strategy that has proved extremely successful.
Kennedy has always been a man of vision, searching out new ways to improve traditional processes and making plans to grow when others thought things couldn’t—or shouldn’t —be done. It is a spirit that has shaped First American into one of the largest and most respected companies in the title industry and in the nation.
Yet Kennedy credits others for the company’s success. “The real strength behind First American is our people,” says Kennedy. “We have made it through some tough times and come out stronger for it. I am consistently amazed by the talent and dedication of the great people we have in our company. They are a real source of pride to me.”
An Industry Leader
Kennedy’s vision and determination have not only revolutionized a company, but also helped to influence many of the advancements and practices that are commonplace in the title industry today—national coverage, international operations, integrated technology—going beyond traditional boundaries to meet client demand for faster, better, and less-expensive services.
Kennedy’s commitment to the title industry encompasses years of service to the professional associations that have fueled its progress and change. He was president of the California Land Title Association in 1960, and served as ALTA®’s president in 1983.
One of Kennedy’s initial moves as ALTA® president was to hire James R. Maher as its first in-house general counsel. Maher, who now serves as ALTA®’s executive vice president, says Kennedy knew the direction ALTA® needed to take.
“Just as he understood the need for First American to grow and expand nationwide, he understood the need for a new ALTA®, and he laid the groundwork for the organization to evolve,” says Maher. “He definitely had a vision of a reinvigorated ALTA® with a stronger Washington, D.C., lobbying presence, and greater resources to support a much larger title industry of the future.”
Kennedy is a firm believer in ALTA® and its mission to keep members apprised of government actions that affect their business. “Most companies can’t afford to hire people to do this, and ALTA® does an admirable job,” says Kennedy.
During his term as ALTA®’s president, Kennedy dealt with some meaty issues—the deregulation of financial institutions and amendments to RESPA’s Section 8 (anti-kickback provisions), to name a few.
“Deregulation caused substantial confusion in the marketplace at that time,” says Kennedy. “Banks wanted to use deposits to go into unrelated businesses, insurance companies wanted to become banks, and banks wanted to go into the insurance business. And retail merchants and stockbrokers wanted to be everything, preferably without regulation.”
Kennedy and others attended committee meetings and hearings to lobby against deregulation, a fight they ultimately lost. But Kennedy says the results have not been all bad.
“Regardless of whatever happens in the marketplace, the business of title insurance will always be essential to the smooth operation of real estate transactions,” says Kennedy. “The need for title insurance has not changed one iota—what has changed is the way we produce and deliver the product, and it’s still changing.”
The U.S. has the best system in place for the transfer and conveyance of real estate, says Kennedy. No other country has the infrastructure that we do—an infrastructure that makes title insurance possible. In fact, many countries such as China, the Philippines, and Russia are looking to U.S. firms to help them get started, he noted.
“Title insurance is the most effective way for real estate transactions to take place, and that holds true everywhere,” says Kennedy.
Many people have described the business of title insurance in lengthy terms, but Kennedy sums it up in two sentences.
“Title insurance is the most effective way to determine that a buyer gets what he bargained for, and that the seller has what he says he has. And if we get it wrong, we make it right.”
The Title Industry – Then and Now
From Kennedy’s perspective, several trends have had a huge impact on the title business during his time. One has been the changing customer base. Where title insurers in the past dealt with lenders on strictly a local basis, the advent of large national lenders completely changed the playing field. Regardless, Kennedy still believes title insurance is a local business.
But the biggest revolution to impact the industry was the advent of technology. Computers and the ability to send documents electronically changed everything, he noted.
“In the early days, most everyone abstracted the public record and indexed it by hand, thus creating title plants and high overhead,” says Kennedy. “Soon we starting sharing plants, which was met with a lot of resistance at first, but it made good business sense to share that expense to keep title insurance affordable. When it gets right down to it, there isn’t really much difference in one company’s product from another. People tend to go to the title company they like and where they have a relationship.”
On the future, Kennedy says the process of bundling services is going to happen whether or not RESPA reform is reintroduced; he sees it as a natural evolution of the industry. “There may be a period of discomfort as everyone settles in, but if government gets out of the way, our industry will do just fine.”
Kennedy believes we must continue to produce the products necessary for the industry to survive and thrive, and that agents are a very important part of the process.“They will have to continue to work harder and grow larger, but the agencies will survive,” says Kennedy. “And ALTA® will be a key element to the future success of our industry.”