Client profile: Suzanne Wise, Network Rail

The rail company’s GC on the challenges of working in a highly specialised industry.

Suzanne Wise first thought it was a joke when she was asked to interview for the top legal role at Network Rail – the controversial owner and operator of most of the rail infrastructure across England, Scotland and Wales.

‘Out of the blue I got the call from a headhunter to say “would I come and have an interview at Network Rail?”, and I just laughed and said: “You’re joking, aren’t you? I know nothing about engineering, I know nothing about railways and I’ve never worked in a regulated industry before. You must have got the wrong Suzanne.”‘

It turns out, they didn’t have the wrong Suzanne and, after some convincing, Wise went to meet the then chief executive David Higgins and other members of the executive team who she says just ‘blew her away’.

‘They sold me on the vision really – the challenge of building a better railway for a better Britain. I knew it was going to be a tall order. I call it my learning precipice. The British have a deep love affair with rail and trains, whether it’s based on Brief Encounter or Thomas the Tank Engine. But equally they are very quick to criticise us. The opportunity to work in an industry that the British are so passionate about and means so much to the economy was an opportunity I couldn’t refuse.’

Becoming the group general counsel (GC) for a public sector body with an annual turnover of £6.3bn and around 34,000 employees is an achievement for anyone, not least for someone who left private practice after two years concluding it was a mistake to choose law as a career. ‘Private practice really didn’t agree with me. You were always on the tail end of a problem or you would give advice, it would go into the vacuum of the client and you wouldn’t necessarily know whether they had followed it, whether it was the right advice or what the repercussions were. I didn’t like feeling like an outsider.’

After taking a career break, Wise decided to give law a last chance and took a job in-house at Gallaher Group, a UK-based multinational tobacco company. She initially meant to stay there for two years, but left after 17. ‘I knew almost immediately I had found my home. I really loved it,’ she enthuses. ‘I loved the variety, I loved being part of the commercial team, I loved the fact you could be more than just a lawyer.’

During her time at Gallaher, a company geared for expansion, Wise built up her experience working on disposals of the non-tobacco businesses in the group and was heavily involved in the 1997 demerger from its American parent company American Brands and the subsequent listing on the London Stock Exchange. By the time Wise left Gallaher in 2007 the brand was operating in 76 countries worldwide, and had just been acquired by Japan Tobacco. ‘In that time I had grown through the ranks, I started managing the intellectual property trademarks team, then I managed the UK full legal team and over time, as we expanded, I ended up managing a team of about 30 lawyers in nine countries. I started as an assistant legal adviser and when I left I was group head of legal.’

Wise kept within a consumer-focused role, becoming group GC and company secretary for one of the UK’s largest food producers Premier Foods – the owner of household names including Bisto, Mr Kipling and Oxo.

‘In some ways it was very similar [to Gallaher]. It was fast-moving consumer goods and like Gallaher it had a strong UK base. It was selling into the same logistics, retail and distribution network that I was used to with tobacco. In some ways food is in the position that perhaps tobacco was 20 or 30 years ago where people are starting to say “sugar is the next poison” or “salt is the devil”. You are getting to the point where food is becoming controversial and certainly processed food in particular.’

Premier Foods didn’t have an in-house function at the time, and Wise built the legal team almost from scratch – providing excellent experience for the restructuring she would later go on to do at Network Rail. ‘I built up a small team of around five lawyers and it was a really intense four years. It was a company under commercial difficulties so in the time I was there I managed two emergency refinancings and disposed of several parts of the business. In contrast, it was managing a company in contraction rather than managing a company in growth and expansion, which was really interesting. I learnt a lot, but I know what I prefer.’

Despite her initial reluctance, Wise joined Network Rail in January 2012 but admits it was tough going at first. It took six months and a lot of support from colleagues before she really started to feel comfortable in the role.

‘I walked into an industry where I didn’t even speak the same language. At my first executive meeting on the first Monday I looked at the agenda and I thought: “Oh my god, I don’t even know what some of the topics are about.” In my naivety I had thought: “How can it be so complicated? You’ve got a train, a track and a station – pretty simple really.” Yet it was completely the opposite. It is an industry governed by and riddled with deep detailed contractual arrangements and detailed regulation. Its structure is really complicated, its funding structure is really complicated and a lot of the law I couldn’t do for myself because I’m not a rail legal expert.’

Wise soon found her feet and within a year of joining had completely restructured the legal department. When she joined there were around 25 in the legal team. At present the number of qualified lawyers stands at 35 and Wise also looks after non-legal teams including a transparency and ethics group, a team to support the Freedom of Information (FOI) Act and a reverse procurement function – bringing the total number to around 70 employees.

‘When I joined the legal team felt, looked and acted a bit like private practice – they were organised on the basis of legal specialism. We did a business feedback exercise shortly after I joined and what came through loud and clear was that there was a slight distance between the business and the team and there was confusion as to who people should go to for advice. It is very important that people in the business know who “their” lawyer is. If you don’t have that then there is a slight deterrent to picking up the phone to the legal team and I wanted to make us as open and as accessible as possible.’

Wise restructured the legal team to sit alongside business lines by mixing the litigators and commercial teams together and then splitting them into groups to mirror the company’s routes structure. ‘Our business is divided into eight routes, each route has a managing director and an executive team and it is a big business in its own right,’ says Wise. ‘And now each of those businesses knows which group of lawyers are their lawyers. The lawyers are encouraged to have a proper engagement strategy and actually get out into the front line – get to know those businesses, get to know the key individuals, build the relationships and hopefully get instructed earlier and identify problems before they arise.’ In addition there is a property team to support the large real estate function within Network Rail, as well as a central corporate team for major transactions.

Wise also put succession planning in place, overhauling what had essentially been a flat structure.

‘I introduced the senior legal counsel role which gave the people in those roles the opportunity to manage professional staff for the first time. If I am going to recruit my successors from within my team, I need to have people coming through the ranks with line management experience.’

For the team, spread across five UK locations, Wise maintains that one of its biggest challenges is the sheer deep contractual complexity of the work at Network Rail. ‘Our relationships with our customers are hugely contractually driven. Because of the structure of the rail industry we have to keep the train operating companies who run the train stock separate from us, yet we also need to be collaborative. One of the challenges of the legal team is to work with the business to produce what we’ve called alliance agreements with those operators – to try and overlay on top of the regulatory structure a contractual relationship that will jointly incentivise both parties to work together to improve train performance. That’s really quite difficult. It’s a bit of a square peg in a round hole.’

Wise admits she does very little law these days, with most of her time taken up by acting as a full member of the executive committee and as company secretary. She is also answerable to the business’ 46 public members, including the Department for Transport (DfT), which hold the board to account. ‘The responsibility for engagement falls to myself and my company secretarial team. The role of the public members is akin to that of shareholders in a publicly listed company. They hold the board to account and they question, probe and challenge the way the board in this company operates. They are high-calibre individuals who are very challenging and it can be time-consuming.’

The reclassification of the company last September as an arm’s-length body of the DfT has also introduced new challenges. ‘It has brought with it an additional layer of oversight and governance. Part of my role is to work with the rest of the senior executive to manage that relationship. One of the main things I was involved in last year was negotiating the framework agreement governing our relationship with the DfT in our new world. Allied to that is the FOI Act. We are expecting to receive in the region of 5,000 to 6,000 requests for information a year. Some of those will be easy to deal with, some of those will be very difficult.’ While Wise has increased her in-house department, she slashed the number of external firms during the 2013 panel review from 12 to five core advisers. She says this was because the previous panel was ‘too big to manage successfully’.

‘I want a panel working in partnership with us, an extension of the in-house legal team, and doing that with ten plus law firms is too many relationships to manage. We didn’t have the right relationships and we were missing the economies of scale. Our legal spend is £10m-£15m [a year]. If you spread that across ten firms you are a relatively small client, but if you spread that among five you start to become a much more meaningful client, you get more value-adds, you get more focus and more attention.’

However, as Wise concludes, unfortunately even the most discerning law firms fall short when it comes to really knowing their clients – especially in the highly specialised and regulated rail industry.

‘We work very hard with the panel to try to make sure they know us as well as they can. But there is always going to be a distance. It doesn’t matter how much of that work you do with your panel firms, if they don’t stand at the coffee machine every day and have those conversations, they never really get under the skin of their client. Even the very best law firms that pride themselves on knowing their clients really well do so only to a point.’

kathryn.mccann@legalease.co.uk