Perspectives: Peter Wexler, Schneider Electric

French energy management company Schneider Electric has been on a buying spree lately, most recently with its £3.4bn acquisition of Invensys, completed in 2014. These deals have seen the number of lawyers at the company rise to nearly 300, leading Peter Wexler, Schneider’s US-based group general counsel, to reflect on what it means to lead and train a legal function.

‘One of the key things about leadership is how you develop your talent,’ says Wexler. ‘I want to be around good people and smart people, so I personally interview most if not all who join this department. I tell them this: “If you make a decision and it’s wrong we’ll fix it, and if it’s well-reasoned and in the best interests of the company then I will support you even if it ends up being a catastrophe because I don’t want you to be afraid of making decisions.”‘ Continue reading “Perspectives: Peter Wexler, Schneider Electric”

Perspectives: Louise Pentland, PayPal

As GC of Nokia during the complex carve-out and sale of its handsets division to Microsoft, Louise Pentland refined her leadership skills at the sharp end. An early exposure to a formal in-house training programme was, she says, vital preparation for a senior role. ‘I was lucky because I joined Nokia at a very early stage in my career and their internal training is all around being the best you can be, developing networks, and getting results without trampling on people.’

Since that time, says Pentland, a growing skills gap between in-house and private practice has made structured training even more necessary. ‘Companies are more flexible in their understanding of the role of corporate counsel and lawyers are more willing to step across boundaries. It’s a far better situation from a career development and employee retention point of view but it means in-house lawyers need leadership skills and GCs need to ensure staff have those skills.’ Continue reading “Perspectives: Louise Pentland, PayPal”

Perspectives: Penny Dudley, Bupa

When Penny Dudley, former legal director of Bupa’s international health insurance division, was asked to move into the chief legal officer role earlier this year, it was an opportunity to reflect on the importance of non-legal skills. ‘We have a strong focus on leadership at Bupa at all senior levels, but it’s a big step when you go from one part of a business to overseeing the entire group. It brought it home that you need to make sure in-house lawyers have these skills at an early stage. It’s a bit late to start investing in leadership once you’ve put someone on the executive committee.’ Continue reading “Perspectives: Penny Dudley, Bupa”

Perspectives: Maria Varsellona, Nokia

Nokia’s transformation over the last few years has tested the leadership skills of all function heads. In April 2014 it completed the $7.2bn sale of its handsets business to Microsoft, and by January 2016 its $16.6bn acquisition of Alcatel-Lucent was in place, cementing its transition from a large phone producer to an even larger networking and IT business.

In spite of the changes, core elements of Nokia remain in place, including its respected learning and development centre, the Nokia Academy. A group-wide emphasis on training, says Maria Varsellona, who joined Nokia Solutions as general counsel in 2013 and was promoted to chief legal officer of the wider Nokia group a year later, is at the heart of running a successful legal function. Continue reading “Perspectives: Maria Varsellona, Nokia”

Perspectives: Clare Wardle, Coca-Cola European Partners

Recruited from FTSE 100 company Kingfisher to oversee the legal function at the newly-merged soft drink entity Coca-Cola European Partners (CCEP), Clare Wardle has plenty of leadership experience to undertake the challenge of integrating the three legal teams at Coca-Cola Enterprises, Coca-Cola Iberian Partners, and Coca-Cola Erfrischungsgetränke.

Wardle was called to the Bar in 1984 and moved to Lovells in 1986 where she worked for ten years before moving in-house – first at the Post Office, where she served as head of legal, before working as general counsel (GC) and company secretary at Tube Lines. She joined British retailer Kingfisher in 2010 as group legal director, taking over as group GC in 2012 where she became responsible for risk, governance, competition and compliance matters. Now based in Uxbridge, Wardle serves as a member of the executive leadership team at CCEP, reporting to chief executive John Brock and serving as legal adviser to company chair Sol Daurella. Continue reading “Perspectives: Clare Wardle, Coca-Cola European Partners”

Perspectives: Sabine Chalmers, Anheuser-Busch InBev

‘The leadership aspect of my role has definitely increased as the company has grown,’ notes Sabine Chalmers, Anheuser-Busch InBev’s chief legal and corporate affairs officer. Following AB InBev’s $104bn acquisition of SABMiller, this is putting it mildly. Mega-deals aside, the need for leadership skills has also come with the broadening of the legal function at large corporations. ‘When I first started I was just responsible for legal. Since then I have taken on corporate affairs, communications, regulation, sustainability and corporate and social responsibility. Handling all that puts a big focus on leadership.’

Early in her career, Chalmers was given an enduring piece of advice by a chief executive. ‘If you want to spot a leader look for three things: judgement, influence and drive.’ It is a benchmark she has continued to use in measuring both her own progress and the potential of her team to step into more senior roles. ‘As a GC you are expected to get the law right and advise appropriately, but the big differentiator is the judgement you apply to that. If you don’t have the influence or the drive to take your judgements through to conclusion there’s no point in having the job of general counsel.’ Continue reading “Perspectives: Sabine Chalmers, Anheuser-Busch InBev”

Perspectives: Albert Wang, 3M

‘There are all sorts of platitudes about leadership,’ says Albert Wang, general counsel (GC) for Asia-Pacific at 3M. ‘You hear them all the time: walk the talk, lead from the front, lead with integrity, and be authentic. They’re platitudes, but that doesn’t mean they’re not true. When I think about the leaders that have inspired me, all of those qualities resonate.’

Another platitude GCs slip into when discussing leadership is ‘talking the language of business’. This strikes a chord with the Shanghai-based Wang. ‘We have a very engineering and science-focused culture, and engineers talk in data. We used to see PowerPoint presentations that ran to hundreds of slides with overflow of information. There is now a trend to strip that detail out and simplify it into pictures or ideas or to develop a dialogue rather than a one-way presentation. It’s not about being updated, it’s about identifying problems and working out how the business can solve them. That, in essence, is talking the language of business.’ Continue reading “Perspectives: Albert Wang, 3M”

Perspectives: Suzanne Wise, Network Rail

‘In the legal profession people don’t always let go quickly enough. That mentality can be destructive if it gets carried in-house,’ says Suzanne Wise, group general counsel (GC) and company secretary of Network Rail, the public body that owns and maintains the bulk of the UK’s railway infrastructure. For Wise, learning to let go is one of the distinguishing features of a successful GC.

‘You don’t get into the technical details of your function at a very senior level because discussions tend to be much more focused on the business as a whole, and the expectation is that you will take full part in those discussions. Communicating and influencing skills are very important if you want to move into a senior position in-house because an awful lot of what you find yourself doing is not legal work.’ Continue reading “Perspectives: Suzanne Wise, Network Rail”

Rack and ruin – the 2016 judicial survey

Funding cuts are putting the judiciary’s status as a world leader under pressure. Canvassing the profession, we find deep concern over prospects for the English courts

Who wants to be a High Court judge? Fewer than ever it seems. This, unsurprisingly, is a major concern for the UK’s top litigators.

Continue reading “Rack and ruin – the 2016 judicial survey”

Herbert Smith Freehills: Are UK disputes heading for the Brexit?

Alan Watts

Partner, Herbert Smith Freehills

alan.watts@hsf.com

Well, we are where we are. ‘Brexit means Brexit’. The legal profession, in the very near term, stands to benefit. Clients, whether internal or external, will need comprehensive advice on how Brexit may affect their operations. From due diligence reviews aimed at uncovering Brexit sensitivities, to help formulating arguments for lobbying purposes and devising alternative structures, business for advisory and compliance practitioners will be increasingly brisk. Clients conducting Brexit due diligence may also require assistance in reviewing existing contracts for any terms that may be affected by Brexit, and seeking to agree amendments before a dispute arises. Courts may start to see an influx of litigation as parties seek to clarify the impact of Brexit on their contractual obligations, though it may be some time before Brexit-related litigation really gets going. Lawyers will be among the most influential advisers to government over the withdrawal from the EU and the policy agenda going forward. Our profession will have a real opportunity to influence and shape the legal landscape and future reciprocal arrangements not only in post-Brexit Britain but in other member states of the EU and further afield.

But what will Brexit mean for lawyers, and disputes practitioners specifically, over the longer term?

Pessimists are well catered for. A report commissioned by the Law Society, published prior to the referendum, predicted gloom for the legal sector in the event of Brexit. It found that even in the best-case scenario the sector would suffer losses to output and employment, and in the worst case could see a £1.7bn fall in annual output. It also found that the most negative effects on the legal services sector would be due to the sector’s reliance on intermediate demand from sectors that are likely to be adversely affected by Brexit, particularly the financial services sector and other professional services, and from the subsequent lower levels of business investment.

While that environment may adversely affect some UK-facing transactional activity in the short term, countervailing factors such as currency fluctuations may, however, have a rebalancing effect to some degree. And although, of course, in time there is the possibility of some clients seeing the need to relocate parts of their operations outside of the UK altogether, the overwhelming attitude remains one of wait and see, at least for the time being.

Firms operating within the UK seem less able to adjust to the effects of Brexit than those with an international network.

That there will be challenges for our industry to overcome is inevitable. It does seem likely that the effect on clients will be among the chief driving factors of the health of the legal sector and should clients relocate their businesses to Ireland or the continent, they will take with them some demand for legal services from the UK. Companies taking a wait-and-see approach may avoid big-ticket transactions or taking risks in the UK. In-house legal budgets and resources may be diverted away from litigation and toward tackling the business-wide implications of Brexit. Firms operating largely within the UK seem likely to be less able to adjust to the effects of Brexit than those with an international network. Any removal of freedom of movement will hinder the ability to move lawyers freely around a firm to meet business demands.

Further, there will be those who seek to suggest that a choice of English jurisdiction is no longer wise because of the risks that the recast Brussels Regulation will no longer apply between the UK and EU countries. None of this will be lost on London’s competitors in elite international dispute resolution, and we can expect the likes of Dubai, Singapore and New York to try to take advantage of any uncertainty around such issues and Brexit more generally and position themselves as a safer choice for sophisticated disputes.

Nevertheless, there is cause for optimism. The core principles of English contract law, such as interpretation of contracts and remedies for breach, remain unaffected by Brexit. The respect of English law for parties’ freedom of contract will make it a perennial favourite for commercial entities, and perhaps more so in light of the flexibility parties may choose to build into their agreements due to Brexit. The integrity and specialised expertise of the judiciary is unchanged, and parties will continue to enjoy access to high-quality legal advisers, litigation support services and first-class facilities. There is much to recommend London as a centre for dispute resolution and there are alternatives to the Brussels Regulation as discussed below. Statistics repeatedly show that London is an entrenched choice of parties for both arbitration and litigation. We in the profession have an important role in ensuring it remains so.

As disputes lawyers we can educate our clients and colleagues about the potential impact of Brexit upon dispute resolution in London. Parties should also be mindful of the dispute resolution clauses they wish to include in contracts should they be seeking enforcement in an EU member state. Although it is not clear at this stage what arrangements will replace the current regime, it seems inevitable that some arrangements will be put in place to safeguard mutual enforcement for the benefit of the UK and the remaining EU member states, particularly as enforcement is a two-way street. Nonetheless, where it may be necessary to enforce in an EU member state and there is any uncertainty as to that member state’s approach in the absence of specific arrangements, parties may wish to consider alternative arrangements, such as arbitration in London. Enforcement of an arbitral award will be governed by the familiar and well-established New York convention, upon which Brexit will have no impact. Disputes lawyers can also ensure clients are aware of the benefits of litigating in London, and keep the risks regarding the enforceability of judgments in perspective. Ultimately it is a question of balancing what are likely to be modest risks against the benefits of English law and London as a premier centre of excellence for dispute resolution.

We in the profession also have an important role to play as advocates of the English legal system. Industry regulators and professional bodies should work together to ensure that in the negotiations around Brexit the position and importance of the legal sector is not forgotten, not only because of the contribution the sector makes to the economy in its own right but because of the supporting role it plays to businesses and commercial parties across all sectors (and in particular financial services).

Of immediate concern should be a sensible solution to the issue of enforcement so as to preserve England’s attractiveness as a jurisdiction and competitive advantage as a dispute resolution centre. The UK could, for example, negotiate to join the Lugano Convention 2007. This applies currently to Norway, Switzerland and Iceland, and includes broadly the same terms as the Brussels I Regulation. While this would mean that parties would be unable to benefit from certain improvements introduced by the recast Brussels Regulation, it would nevertheless provide commercial certainty for parties and lawyers under a familiar regime. Failing this, the UK could seek to join the Hague Convention on Choice of Court Agreements, a multilateral treaty which currently applies only to the EU, Mexico, and soon, Singapore. This applies only to those disputes subject to an exclusive jurisdiction clause, so is necessarily restrictive.

While Brexit may offer opportunities for disputes lawyers in the short term, its longer-term effects are more unpredictable. While issues over enforcement, etc, will no doubt be dealt with in negotiations, the uncertainty that Brexit brings with it and the extended period over which that uncertainty will last could present real challenges. Businesses may not only be less willing to invest in litigation but also less willing to invest and do deals in the UK while that uncertainty remains. The fewer domestic transactions that are done today means the fewer UK-focused disputes there are likely to be in the future. It is therefore important that we and our transactional colleagues continue to advocate the advantages of English law and the English courts in international transactions.

Alan Watts is experienced in all forms of dispute resolution, including High Court litigation, arbitration and mediation proceedings. He was appointed in December 2015 as the firm’s new head of commercial litigation in London.

 

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