Inside the minds of 12 in-house counsel: Lessons for law firm managementPosted on: January 4, 2013
The Lawyer magazine has a regular feature where in-house lawyers and general counsel are interviewed. Whilst each interview focuses on a different issue and is valuable in its own right, it’s worth looking at a selection to see what trends are emerging and what can be learned to inform future strategies and relationship management (account management) programmes for law firm management.
So I have extracted what I believe to be the most telling insights – about these GCs and their companies – from a selection of recent interviews:
Clovis Torres at Vale (Brazilian Mining) 3 December 2012
- After working for Government, in agriculture and in finance he took a four year sabbatical from the law to work on an iron ore development project in Brazil
- The privatised company has grown exponentially and has many lawyers from different cultures and jurisdictions to manage projects in 38 countries
- He has four deputies focusing on: base metals, corporate/M&A, regulatory and environmental and Brazilian market (labour issues and litigation) and three deputies focused on tax alone
- He believes that lawyers needs to be business-savvy and know the business and its economics well and act as a “memory” with regard to new projects
Richard Harris at Robert Walters (Recruitment) 26 November 2012
- An early career experience was winding up the company where he worked
- He reorganised his legal team to comprise senior lawyers in London and others working in Singapore, South Africa, Australia and France and has recently taken on a trainee
- Whilst being fair to employees, suppliers and advisers is regarded as important, the relationship with external advisers (Taylor Wessing – his “go to” firm – and Squire Sanders) is changing with a renewed focus on value added services.
- He prefers partnership relationships and takes a dim view of juniors who do not contribute. Although he does use secondees.
- He is keen to develop direct relationships with the bar as he believes it can offer big cost savings and plans to use higher ranking firms for specialist jobs such as opening in new jurisdictions (e.g. Baker & McKenzie for opening in Indonesia)
Jonathan Jowett at Greggs (Bakery) 19 November 2012
- He moved from a car parts manufacturer administration and then took a temporary contract at a ready-meals supplier
- As well as being responsible for law, his brief includes company secretarial, internal communications, corporate social responsibility, risk management, pensions and The Greggs Foundation charity. He spent three months lobbying for proposed changes to HMRC’s “pasty tax”
- Work includes innovative commercial agreements, franchises and trials as the bakery explores new channels to market both in the UK and overseas
- Much of the work is outsourced with Squire Sanders, Eversheds and Maclay Murray & Spens on its roster
- Commercial property is a major spend with 120 new shops a year and more outlets than McDonalds as well as employment law (200,000 employees)
Chris Barlow of Nomura (Banking) 12 November 2012
- From training at Simmons & Simmons to Glaxo-Smith Kline, he now runs a team covering a variety of corporate matters excluding transactions
- A career highlight was Nomura’s acquisition of the European and Asian arms of Lehman Brothers but the focus in now on a major cost-cutting exercise
- Flexibility in team members is important and he encourages people with different specialisms to work together
- Each week the bank invites a lawyer from one of its panel firms to come in and present on a topical subject
- There are seven firms on the EMEA panel – Clifford Chance, Allen & Overy, Freshfields Bruckhaus Deringer, Linklaters, Travers Smith, Ashurst and Mayer Brown.
- All panel firms are expected to offer a range of pricing options including fixed fees. The last panel review was in 2010 although they “keep an eye on our relationships all the time”
Tinu Adeshile at Islam Channel (Media) 5 November 2012
- She studied law part time and worked as a paralegal at a small City firm
- She converted to Islam after taking the position at the not for profit broadcaster and feels comfortable with the inclusive and diverse environment where Muslim employees pray five times a day.
- Islamic finance principles must be taken into account when negotiating commercial agreements. Work spans a wide range of regulatory and commercial legal issues
- Interns are essential for bigger projects
Tim Ross at Keyway (IT supplier) 8 October 2012
- It is the country’s 76th fastest growing technology company and was established by a twenty something
- He qualified in a small private practice, spent time at another mid-sized firm before his first in-house role at an IT services company. He was the first legal hire at Kelway.
- Following private equity investment, it opened offices in Dubai and has a presence in South Africa, Ireland and Singapore and 11 UK offices
- It invited three firms (Olswang, Osborne Clarke and Reed Smith) for a beauty parade for the main corporate advisory role – the first two for their technology expertise and the third for international breadth and digital media expertise. Reed Smith won. There have since been a number of acquisition transactions.
- The entrepreneurial company has launched cloud services and is considering entry to the US market
- Youth is a facet of the strong company culture although the exit strategy is already being considered
Edward Smith at Telefonica UK (Mobile technology) 1 October 2012
- Took over as GC after a decade with the company following a reorganisation of UK and European operations. He reports to the CEO.
- He reorganised the legal team so each business unit has a dedicated team to achieve a sense of accountability.
- Much of the external legal spend is on standard property or intellectual property matters and there is no formal legal panel – senior lawyers can pick and choose external advisers although there is a list of preferred advisers (including Herbert Smith, DLA Piper and Simmons & Simmons on non-contentious, Ashurst, Baker & McKenzie and S J Berwin on contentious matters).
- Large joint ventures and regulatory issues are key as well as content-sharing and new business lines (as traditional telecoms revenues are in decline) and advisers are having to learn new skills “on a monthly basis” to advise the company
Grainne Brankin at CBS Outdoor International (Advertising) 24 September 2012
- She joined after eight years at search company Yahoo! in Geneva to be legal director at the sole outdoor advertising provider for London 2012, attracted by the reporting line to the CEO and with fond memories of a former secondment to an advertising role
- They did a lot of analysis and training of complex regulations for their sales force
- There were significant contract negotiations for the deal with Westfield and also the contracts with the public transport providers
- Requested a briefing folder on long running litigation being managed by Hogan Lovells
- Needs assistance dealing with the different advertising regulatory regimes across Europe and uses 20 firms
- Key criteria in selection is each firm’s policy on diversity and sustainability
Andrew McDonald at Premier Foods (Food) 10 September 2012
- The recession meant that reduction of debt was a primary challenge which was achieved by the sale of a number of leading brands as part of the “stabilisation and growth” strategy
- The legal team were central to the strategic decisions across the decision making process
- Budget cuts led to most commercial legal work being taken in-house – with the team split into looking after the business and divestments
- They are now expanding core brands into adjacent markets
Nav Sunner at Gree (Mobile gaming) 3 September 2012
- His intellectual property focused career has alternated between in-house roles at electronic gaming and software companies and mid-range law firms
- Japanese company based in Tech City, London
- The work environment and culture is important
- Weekly conferences with lawyers in Japan and the US
- The company is experiencing very high growth in an area of law that is developing fast
Brain Salter at AMP (Financial services) 13 August 2012
- 20 years at Australian firm before in-house role which coincided with the global financial crisis
- Complex takeover of AXA Asia Pacific – using external counsel for corporate and competition law advice – led to current size and shape of in-house team
- Business integration led to amalgamation of two legal departments spanning Australia, New Zealand and London and comprises four core areas: financial services, investment management units, group activities and non-legal.
- They created separate panels for Australia and New Zealand. There are general advisers (low unit value, high turnover work) as well as commercial advisers. There is a complex management model allocating work to internal and external resources.
- They have built knowledge sharing with the external advisers who understand their business
- The timetable for implementing regulatory change is tight – although their lawyers were involved in helping the regulators shape the legislation
- He welcomes international firms “flocking” to the fast changing Australian legal market and values their international networks and cutting-edge products.
- He prefers to deals with relationship partners in the home jurisdiction rather than dealing with individuals in foreign jurisdictions
- He plans to establish an international panel to support the company’s strategy of driving growth in overseas markets
Darryl Coulter at Celerant (management consultancy) 6 August 2012
- Travelled the globe and worked in Scotland for a number of years before settling in Surrey
- In 2000 he was the only lawyer and only one external law firm was used
- Set a goal to establish a legal panel (using a pitch process) and bring work in-house within a year. The panel is reviewed every year.
- Panel now comprises:
- FFW – IP and data protection
- Macfarlanes – corporate and company secretarial
- Reed Smith – Transatlantic
- Trowers & Hamlin – Middle East
- When necessary, they will seek input from other firms in other territories (e.g. Latham & Watkins bought in for a particular multi-jurisdictional project)
- There was a MBO by Novell in 2006 at which time the in-house team was bolstered – two Paris based multijurisdictional lawyers were hired
- They have launched new offices in Abu Dhabi, Brazil and Oman
- They secured ISO270001 certification for its information security management
So what appears to be the trends?
- International – Most have spent significant time working abroad and are managing operations across the globe so multi-cultural management and communication is a major issue. Many prefer advisers in the relevant jurisdictions while one or two value the reassurance of global firms.
- Broad commercial knowledge – Most GCs have worked for a long time in industry – so they have been immersed in harsh commercial realities. The complexity of their organisations and sectors dictate the need for in-depth commercial knowledge and a breadth of legal knowledge. This suggests that in-house counsel are a different – often more commercial and generalist – breed to the specialists in the external advisers they use.
- Fast paced change – Companies are facing fast-paced change from external and internal pressures, cycles of explosive growth and then sharp reduction, the creation of new business models and different legal challenges all the time. Compare this with the relative inertia in many law practices. Clients need advisers who can lead the way – or at least keep up.
- Closer to the Board – In-house counsel are generally much closer to their Boards and strategic work suggesting that their influence is increasing. They need more commercial insight from their advisers who must be adept at influencing in the Board room.
- Horses for courses – Panel members are chosen for their specialist expertise or knowledge of particular locations. This would seem to work against the global “one size fits all” firm. Furthermore, the structuring of in-house teams would suggest more focus in law firm targeting and relationship management programmes.
- No room for complacency – Panels are reviewed on a regular basis – and continually on an informal basis – so advisers must be constantly alert to where they are adding real value and maintaining a high level of satisfaction. Where companies face budget reductions, work will migrate in-house unless innovative arrangements are offered.
- Diversity and sustainability – These are becoming real criteria for the selection of panel firms whilst “corporate culture” remains implicitly important. Firms will need to consider these hard and soft cultural issues carefully when selecting their teams and preparing their pitches.
- A desire for training – This is still regarded as a value added benefit from law firms although thinking “outside the box” to get closer to the business challenges is needed.
Selecting Client Feedback from the tag cloud in this blog will list previous articles containing the views of other in-house lawyers and general counsel.