Philip Richards
RIO TINTO
Team size: 150
Major law firms used: Allens, Ashurst, Herbert Smith Freehills, Linklaters, Norton Rose Fulbright, Quinn Emanuel Urquhart & Sullivan, Sullivan & Cromwell
‘Big firms are not very disciplined about saying: “That’s not really for us.”’
A high-profile bribery investigation in Africa and litigation with the US Securities and Exchange Commission (SEC) regarding allegations of fraud for overstating the value of Mozambique coal assets have dominated the workload of Rio Tinto group general counsel (GC) Philip Richards since his appointment in early 2017.
Richards, formerly a corporate partner at Freshfields Bruckhaus Deringer, succeeded legal and regulatory affairs group executive Debra Valentine, whose contract was terminated by the $40bn global mining giant alongside senior executive Alan Davies. A few months later, the Serious Fraud Office opened an investigation into suspected corruption at Rio Tinto’s activities in Guinea. Then, in October 2017, the SEC charged the company and two former executives with fraud for inflating the value of coal assets acquired for $3.7bn and sold a few years later for $50m. The company has also faced ongoing scrutiny in Mongolia from the country’s anti-corruption authority.
Less high-profile but just as interesting have been moves the company has made in technology, resulting in a joint venture with US aluminium supplier Alcoa and global technology leader Apple to develop a new aluminium-making process that eliminates greenhouse gases.
‘The thing we are completely focused on now is the environment: we’ve set ourselves some really aggressive targets,’ Richards comments. ‘We have an absolute business necessity to grip this, and have a better approach and story to tell. That is really changing the way we think about projects.’
Richards’ team is divided between 100 lawyers, a 40-strong ethics and integrity team, and ten people in company secretarial, all dotted around the world. The legal team is broadly divided along its five main product groups – iron ore; copper and diamonds; aluminium; energy and minerals; growth and innovation – with a new team recently introduced into Singapore to cover commercial. The GC also plans to implement a formal legal panel this year, encouraging the use of smaller firms for simpler tasks.
‘Big firms are not very disciplined about saying: “That’s not really for us.” That doesn’t do them any favours when they do relatively straightforward stuff and then struggle to charge their premium rate for it. My vision is to have a handful of top-line firms and then a much broader cross section of regional or even local firms who can handle the cheaper stuff.’
Nicholas Ansbro
GAZPROM MARKETING & TRADING
Team size: 24
Major law firms used: Baker Botts, Herbert Smith Freehills, Holman Fenwick Willan, Lewis Silkin
Nicholas Ansbro, the long-serving GC of Gazprom Marketing & Trading (GMT), has had a seasoned career both in private practice and in-house. He started as a corporate associate in the cut-and-thrust atmosphere of Clifford Chance in the 1980s. He got the taste for in-house life in 1994 while on a secondment at Reuters, but made a permanent switch in 2003, joining Corona Energy as head of legal.
Ansbro then joined GMT, a subsidiary of Russian gas giant Gazprom, as assistant GC in 2008. He had considerable shoes to fill when, in 2014, he took over from longstanding GC Jacqueline Hill, after she departed for Harkand.
Based in London, Ansbro is the head of legal for a company that employs over 900 people worldwide, with divisions in Houston, Singapore, Paris, Berlin, Zug and Manchester. The primary focus of the business is to implement Gazprom’s global natural gas business strategy, by bringing Russian reserves to the market.
Since becoming GC, Ansbro has involved himself in business-critical work. Major transactional highlights include a 2015 agreement to supply Centrica with gas on a six-year deal, as well as an agreement to acquire 1.2 million tonnes of liquefied natural gas annually from the Perenco project in Cameroon, which is being developed by Norwegian shipping company Golar LNG. But in 2018, Ansbro and the rest of the business has had to contend with the departure of Vitaly Vasiliev, the visionary chief executive who spent over a decade turning GMT into the company it now is.
Herbert Smith Freehills partner James Farrell comments: ‘Nick is great to work with. He’s always across the detail on any technical or regulatory issues and has a real sense of what the business needs from the legal function.’
Grant Dawson
CENTRICA (Justine Campbell incoming GC)
Team size: 265
Major law firms used: Allen & Overy, Ashurst, Eversheds Sutherland, Norton Rose Fulbright, Slaughter and May
‘Grant Dawson has played a key role in all the major portfolio developments of the group.’
The long-serving GC of Centrica, Grant Dawson, has been one of the most prominent names in the in-house community for many years. In late 2018, however, he announced he was set to retire after more than two decades in the role.
Dawson was appointed GC and company secretary following Centrica’s demerger from British Gas in 1997, and has spent most of his career in the energy sector. He led an in-house team of 200 staff and was regularly cited for his work transforming the company from UK gas supplier to an international energy player. Dawson was also a member of Centrica’s executive committee and was on the board since joining the company in 1996.
Group chief executive Iain Conn praised Dawson’s ‘significant contribution’ to the company in December last year: ‘He has seen the company through a number of price controls and regulatory uncertainty over the years, and has also played a key role in all the major portfolio developments of the group.’
Dawson retires on 31 March, and will be replaced by deputy GC, Justine Campbell, who will also sit on the board. Campbell is herself highly rated, having joined from Vodafone in 2013 as GC of the British Gas business, before becoming Dawson’s deputy in 2017.
Centrica recorded turnover of £28bn in 2017, with more than 25 million customer accounts and over 33,000 employees.
ANGLO AMERICAN
Team size: 80
Major law firms used: Linklaters, Shearman & Sterling
Richard Price left behind more than 20 years in private practice to become group GC and company secretary at global mining giant Anglo American nearly two years ago. Six months into the role, the wider business was surveyed for its views on the delivery of legal services and the outcomes drive the team’s mission and vision still.
The team’s headcount had been cut in half shortly before he joined and, while some of that resource has been recovered, work is ongoing to ensure optimal delivery within the current contingent. ‘The survey told us that the business does recognise how legal can add value to what they’re trying to do and, if anything, they want more of it: being more involved, and in an earlier and deeper way,’ Price says.
Quite a task for the former Shearman & Sterling co-head of mining and metals – where Anglo American was a client of his – to face in his first GC role. His appointment in May 2017 was also coupled with a position on the company’s group management committee, the first time legal had secured a seat at the executive table.
But since then, Price believes his 80-strong legal team – spread between a core base in the UK, South Africa, Singapore and Brazil, with smaller offices in Chile, Peru, Australia and China – has become more efficient. There was an imbalance in certain areas between what the legal team could handle by itself and what was being outsourced, and a need to prioritise the work of his lawyers. ‘It’s about making sure we’ve got the right resources doing the right work; are using external law firms wisely; looking at alternative service providers; and, to some extent, de-lawyering our processes – training the business to call on us only when it’s important. The overriding objective for us is to deliver in a way that we’re seen as a strategic value partner to the business.’
He adds that providing more efficient legal services will remain a focus and the function is still at an early stage on this journey. Technology will undoubtedly play a role. A major project is underway to deploy technologies to achieve full integration of matter management, legal risk reporting and cost management across all nine offices globally.
Price strongly believes clients have a key role to play in improving law firm diversity, pushing his advisers to put forward at least one female relationship partner during the company’s first-ever legal roster tender. ‘It’s a journey that they’re on; it’s going to take some time. We want to be supportive and encouraging as they go on that journey.’
Herbert Smith Freehills partner Stephen Wilkinson comments: ‘Price has come into a big in-house role from private practice, and has done a good job in modernising the team and making it fit for purpose. From what I’ve seen, he’s done a really good job of re-shaping it.’
Alison Kay
NATIONAL GRID
Team size: 200
Major law firms used: Addleshaw Goddard, BDB Pitmans, Bryan Cave Leighton Paisner, CMS Cameron McKenna Nabarro Olswang, Dentons, DLA Piper, Eversheds Sutherland, Herbert Smith Freehills, Irwin Mitchell, Linklaters, Norton Rose Fulbright, Shakespeare Martineau
‘The teams underneath GCs will change. There will be fewer lawyers, without a doubt.’
In 2017, the in-house legal team at National Grid agreed to reduce its spend by 25% over three years but group GC and company secretary Alison Kay says the function is on track to deliver a year early. ‘We are much more alive to who is working on a particular job,’ she comments. ‘Why have we got 19 lawyers from a firm working on a particular job that looks fairly straightforward? We look at each piece of work as a project or commodity and work with external firms to say: “We don’t need you for this bit; we can handle it in-house. This is where we need your expertise.” We’ve been much more strategic in the way we’ve looked at things.’
The change has mirrored a board-level initiative called Shaping Our Future. Kay’s next task is considering the organisational design of the 200-lawyer function to see whether it is fit for the future: checking whether it has the right mix between insourcing and outsourcing work, whether it has the right capability internally, where transactional work is best handled and what role automation and technology can play in that mix. She expects to implement the new structure by April, and says a key focus will be the internal and external mix, with the team still mostly outsourcing as much work as it did three years ago.
‘We want to free lawyers up from more routine work to do strategic and more interesting stuff; it takes a brave person to disagree with that philosophy. These things do require a huge amount of time and effort, however.’
Otherwise, the UK legal team has been busy with the next price controls set by energy regulator Ofgem, effective from 2021. Paul Hastings partner Roger Barron comments: ‘The role at National Grid is a wide-ranging one, given the transatlantic nature of its business, importance as a utility and operating as a FTSE 100-listed entity in a highly regulated sector. Alison is a great lawyer who is able quickly to understand the broadest range of issues and then hone in on what really matters to the commercial interests of her internal client. She’s unflappable and a person of great integrity, but is also good fun to work with, and a supportive and encouraging manager of her team. In short, she has all the skills you could imagine the ideal GC would possess.’
Kay believes the GC role will evolve to a point where anybody in that position will have necessarily spent time within a business role, rather than coming up through traditional legal lines: Kay was UK transmission commercial director at National Grid before becoming GC in 2012. ‘Having a good idea of who your customers are, of who your stakeholders are, which you don’t necessarily get when you’re siloed in your legal team, will become increasingly valuable,’ she comments. ‘The teams underneath GCs will change. There will be fewer lawyers, without a doubt, as the use of technology and automation increases.’
Donny Ching
ROYAL DUTCH SHELL
Team size: 1,014
Major law firms used: Allen & Overy, Baker McKenzie, Clifford Chance, Eversheds Sutherland, Norton Rose Fulbright, Reed Smith
‘If a law firm can do the work cheaper, we are happy to give it to them. If they are hungry enough they will find those efficiencies.’
‘Part of the thinking we now have within Shell is to ask ourselves three questions: Is it legal? Is it ethical? Is it wise?’ Royal Dutch Shell legal director Donny Ching says. ‘The “Is it wise?” question brings in a much broader perspective and that’s what we want our lawyers to think about.’
Ching has long been seen as one of the most forward-thinking GCs since he took the top legal job at Shell in 2014. He oversees a vast legal department of more than 1,000 staff, made up of about 70% lawyers. The other 30% is where the most growth has come since the company launched its Future Legal 2 programme nearly three years ago, bringing in expertise in project management, pricing and IT. The function has also placed a strong emphasis on cultural change as part of the programme.
The Shell legal function has offshored work to Shell Business Operations centres in Kuala Lumpur and Krakow, which have grown to 80 staff in two years. Ching says due diligence on similar operations proved that such centres require critical mass to work, with Shell so far achieving less than 5% staff turnover when the industry average is closer to 25%. This, he says, has been achieved by ensuring people are not made to feel isolated and encouraging his lawyers to work with them directly. He also believes the operations will remain internal, rather than selling it to other companies.
‘If you really want to grow then you need them to be really familiar with your business and if you start offering your people to other businesses you start diluting that. We’ve been very focused on doing the work with the right people, in the right location and at the right cost.’
In recent years the department has managed to bring more work in-house, now accounting for about 60%. The company has simultaneously cut its global legal panel down to just six law firms, while the function’s three pricing analysts have driven the use of appropriate fee arrangements in 77% of external instructions, with a target of 85%. Ching says these arrangements drive efficiency on both sides: ‘Our pricing people have a good handle on our cost structure, so we can say we can do part of the work, but if a law firm can do it for cheaper then we are happy to give it to them. If the law firms are hungry enough they will go and find those efficiencies.’
More broadly, Ching is concerned about the impact of emerging risks and trade sanctions around the world, and the physical and mental stress it puts on his team. He wants to improve the resilience of the function with a particular focus on establishing what a digital legal department looks like. He believes he will need to recruit more non-lawyers who are digitally savvy, as well as tech-inclined lawyers: digital literacy has recently become a core competency for the function.
More than 300 lawyers have been through a business-partnering training programme, which is about Shell being more explicit in what it expects from legal. ‘The GC role over the last few years has shifted from one that is looking at legal risk to one that is looking at reputational risk. We’re looking to give more clarity to our lawyers: you need to look at a broader set of risks and if the reputational risk has a larger set of downsides to the legal risk, you may need to say “legally it’s the right thing to do, but we’re not going to do that because that’s going to impact our reputation”.’
Liz Tanner
SSE
Team size: 75
Major law firms used: Addleshaw Goddard, CMS Cameron McKenna Nabarro Olswang, Freshfields Bruckhaus Deringer
‘We would love to find more innovative fee arrangements than hourly rates!’
After a merger-induced interlude, SSE’s GC Liz Tanner has stepped back into the legal spotlight. As an ambitious merger with rival npower looked on the cards in 2017, Tanner delegated her GC duties to Stuart Waddell, previously head of legal for wholesale and corporate, on a 12-month interim basis, while she managed the tie-up. However, after the merger fell through, Tanner reclaimed her post on 1 January 2019. She says: ‘We got Competition and Markets Authority approval, but because of political positions, we didn’t proceed with the transaction. The legal team were greatly involved with that whole process.’
With her attention now fully focused on SSE, Tanner has overseen another year of interesting legal work. In December 2018, her team was involved as SSE sold a 50% stake of its telecoms business to Infracapital, for a total consideration worth £380m. It was a vital transaction for the business, as the cash proceeds were used to reduce SSE’s debt. In other internal matters, Tanner is lining up a review of SSE’s legal advice panel in 2019. Current advisers include Freshfields Bruckhaus Deringer, CMS Cameron McKenna Nabarro Olswang and Addleshaw Goddard, but Tanner is determined to find more flexibility: ‘We would love to find more innovative fee arrangements than hourly rates!’
Tanner also embodies a wider in-house trend of GCs taking on more risk responsibilities. She says that it has become a vital tool in a GC’s arsenal: ‘In commercial contracts, most conversations come down to what risks there are in the agreement. Risk enforcement and management is, therefore, a commercial part of the role. We have to work very closely with our auditors and compliance teams to make sure we understand where the boundaries are.’
As she settles back into her old leadership role, she insists that an open environment is key to getting the best out of a team. ‘I really believe in being open and transparent with the team. It’s really important that we give the team autonomy as they manage their own work. You have to balance that with an environment whereby people can approach you for guidance when needed.’