The BT interview – ideas from the bath

Legal Business (LB): Eighteen months in the group general counsel role, what have been some of the key projects since you landed? The wider business has been through a lot of transformation, how is legal keeping up?

Sabine Chalmers (SC), group GC, BT: When I joined, Gavin Patterson was my boss. He’s since left the business and we’ve transitioned to Philip Jansen from Worldpay. During that time the focus has been on learning the company and industry, getting to know and work with a new CEO, new board, my team, and as a result of all that identifying as quickly as possible what the strategic priorities for the function are and how to best support the business. Early on I reorganised my leadership team to mirror the evolving structure of the business, to ensure we had GCs reporting to me that were lined up with each of the business and corporate units: we announced that in June 2018.

LB: How many in the leadership team?

SC: I have nine reports. GC of corporate, Bruce Breckenridge; GC of technology, Chris Fowler; the GCs of each of our business units: consumer, Russell Johnstone; enterprise, Jeff Langlands; global, Liz Walker; and then Openreach, which is a 100%-owned subsidiary, Nigel Cheek, who reports directly to Clive Selley, the CEO, but we have a dotted-line relationship. Initially, Chris was GC of technology and also my head of ops, but given the scale of the technology and transformation agendas at BT, we quickly concluded that Chris should be dedicated to technology and Dave Hart was promoted to director of transformation. In that role, Dave focuses on the evolving opportunities for the function being brought by technology and alternative service providers, talent retention and management, managing our budget, etc. In addition, when our former company secretary Dan Fitz moved to the Crick Institute as their GC, we promoted Rachel Canham from within the legal team, also reporting to me. Lastly, given the strategic importance of data to our business, a new data privacy officer role will be joining the leadership team and we plan to make an announcement in that regard within the next few months.

LB: So you had the first crack at changing the structure, then tweaked and refined it, how’s it been bedding in?

SC: Well. Phase two of that was working with the leadership team and their direct reports to further align around the strategic priorities for the function and the business and how we want to deliver them. There were a number of areas core to business in which we definitely require deep internal expertise and business partnership – examples of that would be anything to do with telecoms regulation, competition law, data, security, big commercial agreements. We need to build the deep expertise internally and partner with the right advisers externally. And then there are other areas that are less bespoke – for example, certain aspects of litigation, commercial property – where a better way to deliver services and build careers for the talent involved and take advantage of technology and best practices across different industries was to partner with someone like DWF.

‘The first law firms that can come to a GC and say, “I can partner with you to solve multiple problems”, will do well.’

LB: Did you look at the strategic objectives per business line at first or overall?

SC: We did the two in tandem. It takes time to arrive at the right and thoughtful answer. But what’s challenging is that people in the teams also want speed and certainty. Getting that balance is hard.

LB: DWF took what, a year?

SC: Yes, mainly because it was a robust [request for proposal] process with lots of different potential providers and ways of doing things. We went through various stages to whittle it down to a shortlist of four or five. We found the right firm to partner with and a home where a number of our people were going to be happy and add value.

LB: Can you explain what that deal involves?

SC: It’s a five-year managed legal services mandate covering our insurance and part of our real estate work, which has seen 40 of our people transfer to DWF.

LB: There were some suggestions another chunk of the team was heading over as well?

SC: There were headlines that BT Law – which is limited to our ABS-licensed claims business only – was later acquired by DWF and I think the name caused some confusion, which led people to think that the entire legal function was somehow impacted, but that’s completely wrong. It was always part of the agreement that BT Law would go across to DWF in the deal we announced over the summer. The changes on Companies House that were picked up were simply the final formalisation of the managed services arrangement.

LB: Lots of change. Any particular highlights immediately coming out of that or still ‘wait and see’?

SC: What’s always fun is having the opportunity to engage the wider team. Coming from consumer goods into telecoms, there’s no way I could do this role without really talented people. It’s been fun creating the solutions with them but also having an eye to moving people around to create new career challenges and opportunities. Rachel moving to the co sec role, Dave moving from litigation into the transformation role, Chris building out a technology team – that’s the fun part of this job.

LB: How have you found learning about a new industry and company?

SC: The big difference for me from where I came from is that in consumer goods it’s often the case that you land on what the business wants to do first and then legal and regulatory is more about execution. In telecommunications, it’s the other way around, not completely, but you almost always have to take into account the legal, regulatory and policy framework within which you are operating to define the business options and it’s much harder. But it’s also, especially for people in legal, really interesting. That’s how as a team you can add real value to the business by being knowledgeable and creative.

LB: How does the function need to evolve? What’s next?

SC: I believe that with the way we’ve set up our structure, we’ve got the right mix of deep specialism and people that are physically co-located and partnering with the business. But as the business evolves, we are going to have to continue to change and evolve to keep lockstep with them. If the business priorities change, or we enter into new areas of business or experience challenges in particular areas, we’re going to have to evolve, both in terms of structure and skills, to adapt. We will likely also look at the way we partner with external law firms.

‘When I left the UK in 1995, I was shocked and, frankly, pleased at the relevance and stature in-house counsel had in the US.’

LB: How much is the DWF deal a sign of things to come in that field?

SC: I genuinely don’t know. One of the big realisations I’ve had, particularly living outside the UK for the last 25 years, is that the market has changed enormously both in the fragmentation of providers and the many different offerings we now have. Therefore, the ‘Let’s have a re-look at the landscape’ is as much about the fact that’s changed, not just because BT’s changed. To ask, ‘What’s out there? What’s on offer? Where are the good people? Where’s the good technology? What are the different ways of doing things?’ It’s not a cost-cutting exercise, it’s about identifying the best ways to deliver, making best use of technology, creating the best career paths for our talent.

LB: How hard is it to get around all those different providers? You spoke to 26 for the DWF one.

SC: Chris set up a fantastic foundation for that by building his transformation team and they are focused on that agenda. That’s the only way you can do it. Full-time, bringing in new thinking that challenges the status quo.

LB: How big is that transformation team?

SC: There’s 15.

LB: When we spoke at the time of the DWF deal you said this was the direction of travel and you’d expect other companies to do this sort of thing. How high are your expectations for those providers over the next 18 months?

SC: It’s going to be interesting. It used to be the case that the big law firms kept doing what they were doing and then you had a handful of alternative providers who were offering managed services or different bespoke services, often with a lot of offshoring. What’s interesting now is virtually every good law firm is at least looking at this to, if nothing else, identify pockets of new growth. The only way the business model can work for some of the larger law firms is if they get scale and the commitment of a sufficient number of clients that are going to provide volume. A really interesting evolution would be if the top firms can bring together a consortium of, say, four or five GCs that say, ‘We’ll give you the work’, so they can build the platform and make the maths work, and then also provide the quality that only a big law firm can bring.

LB: They’re very different business models. Eversheds Sutherland spun out their alternative services arm. Do you give much to the idea of it needing to be a separate entity that can have its own strategy and investment or can it operate in the law firm environment?

SC: It can operate in the law firm environment. It’s a bit like the successful consumer goods companies, right? They have their luxury, premium end of the business that works in a particular way, but they also have the high-volume core business. At the end of the day the totality provides the customer with a broad range of products. The law firms that crack that nut and can come to a GC and say, ‘I can partner with you to solve multiple problems for you’, will do well.

LB: Do you see much of that thinking from law firms at the moment?

SC: Not yet, but I’m sure they’ll get there. If you look at the way the world and the legal market has evolved, there are loads of talented lawyers who at some point in their career just need a different sort of flexibility: where they live, when they work… They lend themselves to different models of legal service delivery.

LB: But you could see a consortium of maybe four or five GCs coming together…

SC: Consortium’s the wrong word. Maybe a law firm aligning four or five anchor GCs, who say ‘we’ll try this for five years’ and building over time the confidence that the model would work.

LB: It does feel like it needs that tipping point or more momentum before this happens. Have you spoken to other GCs about this?

SC: No, this is an idea I had in the bath. I do get asked by law firms for my thoughts on this kind of thing and it came to me that to make the maths work they need the volume, right? But they are probably approaching it the wrong way around, by starting small and building from there. It would be interesting if you did it the other way around and went to four or five GCs and said: ‘Look, we’re thinking of building this, will you come?’

LB: You mentioned talent retention at the start. Is it something you’ve been looking at?

SC: There’s a lot that’s being done by BT as an organisation around leadership and development, and we’re therefore just ensuring that we are putting folks from the legal and co sec team forward to take advantage. Within the legal and co sec function, Jeff Langlands’ team always manages to knock the ball out of the park on our annual engagement survey. He’s very thoughtful about it.

LB: He’s a nice guy.

SC: He is leading the charge for us on talent, being clear about the different building blocks you need to have in a career. In my experience, it’s not about just getting successive promotions, it’s about getting that variety of experience so you have a well-rounded career. So, it might be making sure that folks that are in one business unit, say consumer, also get some B2B or corporate unit experience at some point, or a different legal qualification or language.

LB: What about introducing non-legal professionals in some way?

SC: We have the mix that you’d expect of paralegals, new graduates who may want to become lawyers, obviously, the transformation team has a good mix of analysts and tech experts. At BT, because we have such a broad range of skills across the business, often rather than building it within the team, we harness the rest of the organisation.

LB: What are the differences you’ve noticed between the US and UK markets?

SC: When I left the UK in 1995 and moved to the US I was shocked and, frankly, pleased at the relevance and stature in-house counsel had in the US. Company GCs that did not report to the CEO or form part of the executive team were in the minority. A lot of that was driven by the litigation environment and regulation, but also it’s just a country in which lawyers have forged careers in business, in politics, in many fields. The UK is not quite where the US is and maybe it never will be, because the litigation environment is so different, but the gap has definitely narrowed.

LB: Is that just because it’s had to?

SC: The world’s become a much more global place. I’d like to think it’s not just, ‘Oh my gosh, there’s many more lawyers in senior positions just because we need them’, but it’s because the profession is showing we can add value in many different ways.

LB: What are the downsides to that? How does it evolve further?

SC: It’s great when people get moved around and have different challenges. In terms of the teams that I’ve worked with and had the privilege to lead, some of the proudest moments are when members of the team move outside the function into M&A or finance or general management. That trend will continue. But a lot of lawyers like being lawyers.

LB: How far has legal technology come in the last few years and how much impact do you expect it will make?

SC: The GC is sometimes the worst person to ask that question because they’re so far from what the technology’s actually doing. There is a dizzying array of potential solutions out there and you can fall into the trap of investing in technology for technology’s sake. It’s important to be thoughtful about what is going to make peoples’ lives easier. Are they going to embrace it, and what training are you going to have around it? The great thing about partnering with DWF and others is they’ve tried and tested heaps of technology.

LB: And they have dedicated tech budgets as well?

SC: Exactly, which would never make sense. If there’s a choice between putting the pounds behind our network and serving customers or some new piece of tech for the legal team, I know where the money will go.

LB: What are the goals for the next 18 months?

SC: First, making sure that the team is ready to support the four or five key business challenges/opportunities that our CEO and ex co want us to address. Second, continuing the work on talent development and nailing succession planning, while third is getting the model of external partnership right. LB

hamish.mcnicol@legalease.co.uk