The 2016 edition of GC Powerlist showcases over 100 senior GCs defining the most confident branch of the profession. The age of uncertainty has never offered more rewards – or challenges – for legal heads
‘In our game, regime change is a big threat. You end up seeing quite a few CEOs come and go and a lot of new managers want to change the deck. The GC, however, can be a reliable presence. I’ve seen a lot of people come and go so I know where the bodies are buried!’
Geoffrey Timms, Legal & General
Are we nearing the post-general counsel (GC) age? In the fourth and largest edition of GC Powerlist, the responsibility, pressure and influence accorded to GCs has only grown: primarily thanks to the multi-pronged regulatory onslaught that is reshaping the business environment.
In a global economy still dominated by volatility and uncertainty, buffeted by wrenching technological change and frantic consolidation, conditions have in many respects been ideal for the increasingly mature in-house profession to assert itself.
Of course, the tension between a progressively embedded commercial role required of GCs colliding with a widening risk brief is far from resolved, if anything that tension has become more pronounced since our first GC Powerlist in 2013. One possible path for the profession is that the GC role is recast further away from its professional roots into a broader context. Who is to say that the chief legal officer will themselves always be a lawyer?
‘I like being a lawyer but if someone calls me “just a lawyer” I get offended.’
Justin Bickle, Oaktree Capital
But for now the senior GCs cited in this edition can be regarded as shaping the future of the increasingly powerful in-house profession, which has strengthened its grip on the UK legal market even as private practice has, in many arenas, stalled.
These individuals have demonstrated the ability to bridge the contradictory demands of the modern GC and positioned the role in a wider business context.
With deal-making back on the agenda since the banking crisis but now set against a much tougher regulatory backdrop, the stock (and workload) of the in-house lawyer has never been greater.
BAE Systems group GC Philip Bramwell says: ‘I never knew who perpetrated the myth that going in-house was an easy option. You are freed from the tyranny of the billable hour. But it’s only to be replaced by the tyranny of corporate life and deadlines… and public scrutiny. While the pressures are different, they are not necessarily lower in corporate life, it’s just different practice. The rigour of the work – the requirement for it to be right and deliver world-class advice in a timely, cost-effective way, means the pressure is great.’
A series of high-stakes deals during 2015 gave in-house the opportunity to demonstrate their worth, including Shell’s £47bn acquisition of BG Group; the proposed $71bn merger between brewing giant SABMiller and Anheuser-Busch InBev (AB InBev); and BT’s £12.5bn takeover of Everything Everywhere (EE).
Meanwhile, regulators have continued to hit the financial services sector hard, particularly last May when a quintet of major banks made a collective £3.6bn settlement to bring a close to investigations over the rigging of benchmark interest rates. The impact of tougher regulation and risk can hardly be overstated. While its effect is most stark in financial services, in truth it is hard to find a GC operating in any major sector not citing the challenge of tougher regulation.
Alongside Bramwell, some standout repeat names include Vodafone’s Rosemary Martin, BT’s Dan Fitz, ITV’s Andrew Garard, and Deutsche Bank’s Emma Slatter.
Amid turbulent times, the hallmark of the modern GC is one who has become not just able to function during uncertainty but to thrive on it.
As BT’s Fitz comments: ‘I like daily uncertainty. I never know what any day is going to bring. Rather than something to be avoided it should be embraced because it keeps the job fresh.’
Deutsche Bank’s Slatter argues the modern GC has to embrace the unprecedented breadth of the role: ‘The hallmarks of a good GC are leadership; clear vision; good communication internally and externally; strong legal, risk management and analytical skills; and a pragmatic, common sense approach.’
Martin Bowen, head of legal at Dyson, says: ‘We are under healthy cost pressure and must cut our cloth accordingly. We can’t recruit over-qualified people for certain tasks that could be done by non-lawyers. But it’s not just about cutting costs. It’s about being smart, and being smart is also about making sure your people are doing the things where they add the most value. It’s the law of comparative advantage applied to staffing.’
While there are clear advantages to forging a reputable legal career in-house, for many leading GCs it has also created pressure to find new ways of motivating and retaining talented lawyers. If businesses continue to accelerate their growth, a variety of interesting work should offer a bevy of work in-house and attract the best talent.
For Santander’s incoming UK head Collins, the support provided by his old team at RBS to the business was not only a critical learning experience but also presented the greatest challenge in his career. ‘It was in the dark days when we had to support the rescue of the bank [RBS] while breaking up and integrating ABN AMRO [Bank] and all the while financial markets were in free fall. As part of the rescue we had to find a way to put the asset protection scheme in place. The government should take credit for the scheme, but we had to deliver on enormous due diligence demands, negotiate the scheme and operationalise it. We also had to find a way to build the non-core division from scratch and provide legal support to complex asset programmes designed to clean up the bank’s balance sheet, while at the same time dealing with the complexities of separating ABN AMRO, and finding ways to keep the legal teams energised and stop them being overwhelmed. Throughout this time, the legal team at RBS proved itself again and again, both in terms of character and contribution, and resilience.’
‘JUST A LAWYER’
While the worst of the financial crisis may be over for some, GCs are now facing an even bigger challenge born of a drive for efficiency: technology. Where the rising regulatory burden can be mapped and handled in a predictable team framework, the impact of new technology offers no such comforts.
Carillion’s director of legal services Richard Tapp says it is difficult to advise people about perfecting a role that will be very different in 20 years’ time. However, he adds: ‘I’d say don’t just look inside at that organisation but keep an eye at all times on the external pressures and what’s coming over the horizon. These are tough jobs, particularly nowadays when everything is becoming so specialised. There’s temptation to look at the thing immediately in front of you because there’s so much regulation. But market changes, economic changes and technological changes are coming and you need to be aware of them.’
‘I like daily uncertainty. It should be embraced.’
Dan Fitz, BT
But on the subject of how GCs will support their business in the future, Siemens’ Claire Carless warns against overplaying the oft-cited need to sit at the boardroom table: ‘We could spend a lot of time doing all sorts of things and embed ourselves in the business, but the question is: should we? Should we do that or should we instead be the legal function and just take the info we need on a transaction? It’s a difficult balance, especially when resources are becoming more limited. Is it essential to understand a deal on a commercial level? Probably not, it’s not our job. Maybe [we] need to step back and stop flattering ourselves that we’re trusted commercial advisers. We are lawyers and we should focus on what we’re good at.’
One of the big questions many GCs are asking themselves is whether they are still a lawyer at all. Legal & General group GC Geoffrey Timms says: ‘At dinner parties when someone asks what I do, I don’t I say “I’m a lawyer”, I say “I’m a fixer”.’ Justin Bickle, managing director at Oaktree Capital, comments: ‘I like being a lawyer but if someone calls me “just a lawyer” I get offended.’
Shell GC for the upstream division, Tom Melbye Eide, who until most recently served as BG Group legal head prior to its takeover, says: ‘I translate business risk into legal risk and communicate that to the lawyers in the team and we translate what they are doing into business risk for the benefit of the board. Really the extent to which I am a lawyer is on a sliding scale and varies day by day. At senior level, you drift slowly away from being a lawyer and engage more with commercial and business risks.’
The successful GCs in this year’s Powerlist are the translators – communicating legal risk in business terms to the C-suite, while presenting business priorities to their own teams.
But perhaps there is something more basic to many of the standout GCs this year: a sense of perspective, a curiosity and a lack of pretention. As Fitz concludes: ‘We have to earn our place and we do that by listening carefully to what the business is saying and what they would like to achieve. It comes from a mindset – now we know where you want to go, we want to find a solution to get you there.’
sarah.downey@legalease.co.uk
Methodology and criteria
The research process for the GC Powerlist has grown substantially since the first report was published in 2013 and now encompasses online nominations as well as substantial interviews with senior general counsel (GCs) and private practitioners.
The first stage for the 2016 report began in early December with the launch of an online survey to canvass recommendations of outstanding individuals working in-house at group GC level. Nominations were sought from both in-house and external counsel. The online survey posed three questions:
- Which individual general counsel would you highlight as outstanding in terms of performance and overall contribution?
- What qualities would you say make this lawyer outstanding?
- What career achievements would you highlight that illustrate their abilities and potential?
Respondents were allowed to nominate up to three individuals and as the format this year returned to a focus on senior practitioners, we specifically asked for nominations for individuals in the senior GC role at major UK companies or companies with substantive UK interests.
The online poll also called for nominations for outstanding younger lawyers, primarily focusing on those in their 30s and early 40s working below the level of group GC to produce a smaller list of ‘rising stars’ for the report. The online process generated over 150 nominations.
We reviewed the original 2013 Powerlist to identify a core list of 40 of the strongest names that were still felt to be relevant which were then thrown into the process at the beginning. Separately a team of five journalists in December began researching the report via interviews with senior lawyers, both to canvass fresh nominations to test out our working line-up. The team comprised reporters Sarah Downey and Kathryn McCann and research editor James Wood, who all regularly cover in-house and deal with GCs for Legal Business and The In-House Lawyer. The research process was expanded this year to cover over 40 private practice interviews with senior lawyers across the target sectors for the report, deploying Legal Business’s entire reporting team, including senior reporters Tom Moore and Jaishree Kalia.
This allowed for additional feedback on the most highly-regarded GCs in each of the major sectors. In total more than 100 interviews were conducted with senior lawyers to draw up our list. The research period continued into February, with the final names reviewed by the wider Legal Business team in early March to confirm the list.
The criteria applied was relatively simple: we were looking for outstanding individuals at senior GC level at major companies operating in the UK that have a proven track record of leading high-quality teams and positioning their operations at board level. Evidence of leadership roles beyond the legal function, progressive thinking and strong interpersonal skills were also cited as key factors.
While we avoided individuals that have little connection with the legal function in the UK, we did consider the UK or European regional heads of large international companies. While we primarily focused on the most senior GCs in the UK, we did in a handful of cases include individuals with significant reputations that were in charge of substantial teams and units for very large global companies. Weight was given to the candidates that received multiple recommendations or those that could demonstrate commercial qualities beyond legal skills. Even more weight was given to the seniority and credibility of those nominating or vouching for individual candidates. Given the level of the research, we felt confident enough to exclude some prominent names that failed to elicit strong feedback. In other cases, some individuals with strong and credible recommendations could not be included as they did not fit the criteria for this year’s report.
For further analysis, see: GC Powerlist 2016