Profile: Michael Shaw, Barclays

The banking giant’s deputy GC discusses management challenges

Barclays deputy general counsel (GC) Michael Shaw has proved himself to be highly adaptable since joining the bank in 2009 from legacy Herbert Smith.

It was in 2010 that the outside world witnessed the knock-on effect of Barclays Capital head Jonathan Hughes stepping down, after which Judith Shepherd moved into the role, leaving vacant her position as GC of retail and business banking (RBB). For seven months Shaw stood in as interim RBB GC before Mark Chapman was appointed in October 2010.

Up until the beginning of this year when Barclays recruited Africa GC Charles Wheeler, Shaw was also responsible for the functional aspect of Barclays Africa Group, Absa.

Most recently tipped as a front runner in the leadership race to replace Mark Harding as group GC (Shepherd was also a favourite), it’s easy to forget that Shaw has only been with the bank for four years. It was his awareness of the relative brevity of his in-house career that led him to withdraw from the race, which culminated in last month’s appointment of US lawyer and former GC and chief regulatory affairs officer at PNC Financial Services Group, Bob Hoyt. Prior to PNC, Hoyt served as GC at the US Department of the Treasury from 2006 to 2009, and as a special assistant and associate counsel at the White House.

In a sector better known for its big egos, Shaw is modest about his reasons for withdrawing. ‘When Mark Harding announced his decision to stand down at the beginning of this year, I thought long and hard about the role, but realised the move would have been premature for me as I was still learning so much about banking, which hadn’t been my background before my move to Barclays. I let [CEO] Antony Jenkins know some time ago of my decision.

‘As a major universal bank, with big changes underway internally and lots of external regulatory change to contend with, having Bob Hoyt – a US banking lawyer with his skillset and experience, including in the US government – balances the Barclays legal function leadership extremely well.’

Barclays has a large portion of its 850-lawyer global legal function in the US after acquiring £1bn worth of Lehman Brothers assets following its collapse in 2008.

During that time, when the financial crisis hit, Cambridge-educated Shaw – then a corporate partner at legacy Herbert Smith, where he had worked since 1992, having trained at Clifford Chance – was advising on a string of major bids, including acting for EDF on its £12.5bn takeover bid of British Energy and for the investment banks advising Rio Tinto on BHP Billiton’s $147bn hostile bid.

It was these profile-raising deals that indirectly led him to move in-house.

‘Back at the time of the financial crisis and the immediate aftermath, when non-FIG M&A activity was in the doldrums, I was lucky to have such great deals in 2008 and 2009 for EDF. However, I started to think “How am I going to top that and keep enjoying the next ten years of my career as much as I have the last 20?”‘, says Shaw.

‘We’re on a journey to manage the legal function, which is the size of a big law firm, on a unified basis around the world, under a single leadership team. That wasn’t the way it used to work.’
Michael Shaw, Barclays

‘Management had always been an interest for me but at Herbert Smith, which had a relatively light management structure, there was no immediate avenue for me to combine client work and management at the firm and I wasn’t ready to give up practice. Then one day I got a call from a headhunter.’

The conversation was on a no-names basis, but Shaw – who knew then deputy GC Shepherd well, having taken over from her on a two-year secondment as joint secretary to the Takeover Panel in 1996 – guessed the role.

‘He gave me enough information to work out what the job was; he didn’t know that I knew Judith. I said: “I need to stop you there. That sounds an awful lot like Judith’s role! What’s happened to her? Where’s she gone? If she’s not good enough I certainly won’t be!”‘

Shepherd had moved to take the Barclays global and commercial retail bank GC position at the end of 2008, a move interrupted by her involvement in selling the bank’s fund management division, Barclays Global Investors (BGI), to US money management firm BlackRock – a major deal that raised £8.2bn of capital. Following its completion in June 2009, Shepherd moved into her new role proper, but months of hunting for a suitable new deputy GC had left the role vacant, with group GC Harding also acting as interim deputy.

‘When I started the role I inherited a group of very capable lawyers who had been through a great deal of recent change,’ says Shaw. ‘2008 in particular had been a traumatic year for the banking industry and in 18 months the team had been through two major capital raisings, the acquisition of Lehmans in the US and the sale of BGI. It was my job to say: “Right, let’s pull together and work out how we deal with life after all that.”‘

The new role was a baptism of fire for Shaw who, not having handled litigation work as a corporate lawyer, had to now lead on a number of important legacy cases and help manage the entire legal function, which, as Shaw points out, is about the size of a top 20 law firm and spread across every jurisdiction in which Barclays operates, including 11 countries in Africa and 40 across Europe and Asia.

In the four years since Shaw joined the bank, the legal function has undergone huge internal change as chief executives Bob Diamond and Antony Jenkins broke down the silos dividing the legal groups. ‘The different businesses within Barclays were run separately from one another in terms of management and infrastructure even though they all came under the Barclays PLC umbrella,’ Shaw says.

‘We’re on a journey to manage the legal function, which is the size of a big law firm, on a unified basis around the world, under a single leadership team. That wasn’t the way it used to work.’

On top of this, Shaw has been preparing the prospectus for Barclays’ £5.8bn rights issue as part of the bank’s bid to raise £12.8bn worth of capital to cushion itself against potential financial shocks, in response to a demand from the Prudential Regulation Authority (PRA).

‘Barclays, like others in the industry, has a number of legacy legal and regulatory investigations and proceedings from before the financial crisis. In addition, I’m currently managing the legal aspects of our rights issue. Of course, that’s the sort of activity I used to do when in private practice, so I’m in my element, doing what I love doing, with lots of time spent alongside the board and senior management. But it is a busy time,’ admits Shaw.

Shares for the rights issue started trading on 3 October, after which Shaw will be adopting many of the group GC’s responsibilities, while Hoyt, who starts in mid-October, settles in.

Shaw is undeterred: ‘It will be a new challenge for [Hoyt], learning about English law as well as everything about Barclays and the legal function. My role, alongside the other members of the legal leadership, will be to help him achieve that as quickly as possible!’