The GC Power List summer reception – Reaching out, reaching up

Legal Business for the first time extended its GC Power List into a summer reception. A distinguished list of panellists debated what it takes to get ahead for rising stars of the in-house world

Having for two years built up our annual GC Power List report and reception, Legal Business in June extended the venture into our first summer event as a means to further support the in-house community.

The GC Power List Summer Reception brought together over 60 in-house counsel at major companies on 11 June for an evening of networking and relaxation at the private members’ club at The Ivy. The centrepiece of the night – which was held with RPC – was a debate held to further explore the themes of career development in our 2014 GC Power List report, which identified 101 up-and-coming in-house counsel making their name at companies operating in the UK.

The evening and discussion – chaired by veteran City journalist Anthony Hilton – illustrated the coming-of-age of the employed legal profession, with the panel convinced that the variety, commercial exposure and broader role in-house provides would keep drawing in talented lawyers, despite expectations that private practice would step up their recruitment amid a reviving economy.

While there is an acknowledgement of the pressures on in-house counsel – both in the struggle to progress through a flat career structure and the tough budgetary environment bluechip legal teams are facing – the panel and attendees were agreed there would be no shortage of lawyers aiming to move in-house.

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Anthony Hilton, Evening Standard: The theme of the evening, essentially, is: as a young in-house lawyer, what is the career progression? What skills do you need? What personality defects should you suppress? Let’s kick things off.

Scott Gibson, The Royal Bank of Scotland: One of the reasons in-house careers have become more appealing is that the financial gap has narrowed, certainly at the mid-level. Overall, these days, we are reasonably well paid for what we do and certainly better than I understand to have historically been the case.

AH: What do you think gets people into business as opposed to staying in private practice?

Adrian de Souza, Land Securities: People move in-house for all sorts of reasons. Some prefer the flexibility it brings. Other people, like myself, like business and learning about something completely different. When you reach five or six years qualified in private practice, it is very difficult to continue the same rate of learning in terms of technical skills. In most businesses there is an infinite amount to learn, both in terms of hard and soft skills. I have not stopped learning since I left practice. The most common skillsets added are probably influencing, managing people and technical areas beyond legal, such as finance, investment and marketing. In terms of overall pay packages, I do not think there is an awful lot of difference between private practice and in-house, certainly at the top end.

Barry Matthews, ITV: It is also the job satisfaction. One thing I found incredibly frustrating about [working in a law firm] is that you would have five key clients you would work for, but you would spend three months working for one of them, another three months working for another, and you may go back to that first a year later and things have changed; everything you learned about the client before becomes redundant. When you are in-house, you are continually learning about the business and getting better and more agile in terms of your advice.

Scott Gibson: The career expectations of in-house counsel have probably changed. In-house legal functions are developing specialist teams. The opportunities to go in-house and be, for example, a litigator, corporate lawyer or IP lawyer are there in a way they were not so markedly set out for people wanting to pursue an in-house career in the past. There are increasing opportunities to climb the functional ladder and gain leadership responsibility. Organisations are also promoting home-grown talent rather than parachuting senior lawyers from private practice into the senior roles in their organisations and, therefore, it is seen as a more attractive long-term option.

Jamie Pearson, Shire Pharmaceuticals: In my office, it is almost the reverse. I was a competition lawyer in private practice and became fed up with being ‘the lawyer that likes to say “no”’. I really like working in-house. I work in a generalist role, and I am told that I can and should try to turn my hand to anything, with advice from outside counsel obviously. I really like the variety, because I felt very niche when I was in private practice, and I did not like that very much.

Barry Matthews: In terms of my own personal career and also peers, what happens is that a lot of people have advised in particular areas for a number of years and, when the incumbent director moves on, either through retirement or going to another organisation, a few of us have been picked out and asked: ‘Actually, why don’t you do it? There is no need to parachute anybody in. You are the person with the best working knowledge of this area because you have worked side-by-side with the person who has run it for the last few years.’

 

Jonathan Watmough, RPC: Five or six years ago, there were very few lawyers at board level in companies. Now, there are more, but it’s still something of a rarity. Those who are at or close to board level tend to be there, in my experience, because of the increase in regulation becoming a board-level issue and a significant commercial concern. We’re at a transition point where soon we’ll see the boards of more and more major corporates welcoming lawyers to the top table, but we’re not there yet.

The US has traditionally been a more litigious environment than the UK, so there it’s been common for some time for lawyers to have a greater voice in the commercial running of businesses.

AH: One of the complaints of the partners who retire from big law firms is that they do not pick up non-exec directorships because they are deemed not to have business acumen. From what you say, the in-house route is taking people into the boardroom where that wider skillset is appreciated.

Adrian de Souza: In private practice, the tendency is to advise on risks. In-house, the better lawyers tend to take risks. In competitive markets, opportunities are all about identifying mispriced risks – the better the risks that your business takes, the more money it is likely to make. Taking risks can be very difficult to do. If you leave private practice and go in-house, it is much harder not to just provide advice, but to say: ‘This is what we are going to do.’ People respect you for it. They stop seeing you as an adviser and see you more as a colleague. Lawyers are much better able to do that now than they have been in the past.

AH: How do you manage that transition? You have to have a personality that is willing to accept that you are putting yourself on the line.

Jamie Pearson: It is a lot more rewarding if you get over that hurdle. For me and a lot of people, it is all about establishing a relationship of trust. You have to be interested in what people are doing, what the business is doing. You have to ask questions about it and make them feel that you are there for them, trying to support what they want to do. For me, that was the first step and it always will be.

Barry Matthews: We work really hard to implore our lawyers to do two things. One is prevention rather than cure and the second is solution-based advice. I know it is a cliché, but what that really comes down to is having adequate communication and talking to people. One thing we have really worked hard on with our guys is to make sure we have relationships throughout the business at each level, so it is not simply a pyramid structure in which the senior guys know each other very well and, the further you go down the chain, this might diverge. We try to adopt a track so people are ‘man-marked’ throughout the business.

Scott Gibson: In an increasingly cost-conscious environment, demonstrating to the business why they need you, rather than simply outsourcing work, and displaying what value add you can contribute, goes towards building trust.

AH: Being sufficiently gregarious to go out and establish these contacts is clearly one attribute on which success is built. Can you think of something else that is an essential?

Scott Gibson: Being able to identify the issues. If you ask a junior lawyer in private practice what the issues are on a particular transaction, you will often get a long list, most of which are probably not that important to the senior decision-makers in the organisation. Being able to identify the relevant issues and articulate those to seniors is a crucial skill in-house.

Jamie Pearson: Look out for the opportunities that might expose you to different parts of the business or allow you to show yourself off in terms of career development or in a new area. So often, we get bogged down in just trying to get everything done that we forget to be a little strategic about the way we approach our own workload. You have to do that for your own sake, given the flat pyramid there is in most in-house departments.

AH: Jonathan, you see this from both sides. Are you conscious of personality differences, in a positive sense? Do you think it is a different kind of person who thrives in the corporate environment?

Jonathan Watmough: Not at all. The skills everyone has talked about here today that make a really good-quality in-house lawyer make a really good-quality private practice lawyer as well. Those people who leave us nearly always go in-house as opposed to another private practice firm and are invariably very successful.

Adrian de Souza: Some of the skillsets are different. To be a really good in-house lawyer, you need to understand how your business makes money. To be able to add value, you need to be able to understand the regulatory and risk environment and work out what the impact of each risk is on the bottom line and whether you are willing to take it. If you can do that – and it is likely that there will be nobody in the business that can do it better than you – you will be invaluable and, again, people will see you as a trusted colleague rather than a pain.

Jonathan Watmough: Absolutely – it’s essential, just as it is for us in private practice to understand how our clients’ businesses make money. And, when it comes to recruiting from private practice, I would say that is what general counsel are prepared to pay a premium for: those private practice lawyers who have those skills.

Adrian de Souza: It takes years before you properly understand what makes your business tick and companies realise that the first few years of your time with them are effectively an investment that only pays off much later. This is why companies tend to invest more in their people – to encourage longevity and so career development is probably much better in-house. When people understand the culture of a business, it can give them a two or three-year head start. You might be in the business for four or five years before you really understand it well enough that the business is getting some advantage. For me, the real eye-opener was that being in-house and working in private practice are completely different jobs. They require completely different skillsets. If you are a very entrepreneurial type of person, you are likely to do much better in-house and probably earn more than you would in private practice.

AH: Is that staying within the legal department, or is that taking the opportunity to broaden out into general management?

Adrian de Souza: As your career progresses in-house, it does become broader automatically and you take in other areas that are not legal at all. If you show more commercial aptitude, businesses are generally very happy for you to run the commercial side of deals, even very large transactions, by yourself. You can resolve all sorts of business issues by yourself, when other people in the business would require legal advice – this puts you at a huge advantage.

Jonathan Watmough: There is a really interesting point we see from the other side of the fence, as it were. We send young lawyers on secondment all the time, usually for six or even 12 months, and they build up fantastic commercial awareness of the client’s business, much of which is picked up from working alongside their in-house counterparts.

Barry Matthews: The world changed in 2008-09. One thing we have not really focused on is something that puts pressure on all of us: cost. We are a cost centre within a business and I have been continually tasked to reflect on my budget over the last five or six years, year-on-year, to ensure that we are as efficient as possible. The problem is that you are trying to maintain talent in an organisation where you are constantly trying to control cost. What do you give your lawyers to ensure that the talent stays? Ultimately, if you are in a situation where you cannot give more to your lawyers, the good people go. You cannot have that scenario, because it all comes crashing down eventually, so development has been a massive thing for us in terms of investing a lot of time in creating a scheme for all of our lawyers. Year-on-year, the promise to the lawyer is: ‘Each year, you will feel you have progressed as a lawyer or a commercial person. At ITV, we cannot promise you the next pay rise. We cannot promise you the next promotion. But we can promise you we will develop you. This means people progress year-on-year, something bright young people want to feel they are doing.

AH: If the City started picking up again strongly, do you think there would be more competition for your people?

Scott Gibson: I do not think you are seeing huge numbers of people going back to private practice. Maybe in specialist senior roles, but at the middle level certainly, we do not see people going back to private practice once they have moved in-house.

We receive large numbers of applications for permanent in-house roles when we advertise. You see a lot of in-house roles that are fixed term contracts, for which it is harder to get candidates of such high quality, but for permanent roles there is very strong demand.

Jamie Pearson: It goes back to what you were saying about timesheets. I hated timesheets. At six minute intervals, you had to record what you were doing, all through the day, every day.

Lesley Wan, Lloyds Banking Group [asking a question from the floor]: Can I ask the panel what their organisations are doing to promote women? We are really pro promoting our women, and diversity and inclusion. Certainly, by 2020, our chief executive, António Horta-Osório’s aim is to have 40% women at Lloyds Banking Group in senior roles. That is a significant figure to reach.

Barry Matthews: Both of my heads of legal are women. Seventy five percent of my senior legal advisers are women, but that is through no conscious quota; that is because they were the best people who had come through my team. I am really against positive discrimination, because it undermines the true quest of a meritocracy. For those who want to have a career at ITV but also have an involvement in bringing up children – and invariably that is the woman in a relationship – there is no getting away from that – there is an element of choice there. Once an individual decides they want to have that balance, it comes down to whether or not that person is a star performer. For those who are, you find flexibility.

Adrian de Souza: When recruiting for very senior roles, we tell recruiters they have to provide at least two women on each of our shortlists. It forces them to dig a bit deeper, perhaps in areas they might not have previously looked. You do have to provide that incentive. The current efforts do mask a more structural issue, in that working patterns in the City have been designed by men with non-working wives. Unless that issue is tackled, the gender pipeline that has been sucked dry by the recent push will not get replenished. Of course, a lot of the things companies try to do to get more women on board also apply to men and men in my generation too. Young people do want to spend more time with and be more actively involved in bringing up their families. I do as well. These things are much wider than just gender. These are things that, if they are not addressed now, will prevent companies from succeeding in the future.

Jamie Pearson: It is the opportunity for the parent. It is not necessarily for the mother, even though we are used to framing it in those terms. It is much more helpful to see that as equal rights for parents, not for women, because otherwise you will not move away from women being stereotyped into being the person that looks after the children or manages the childcare.

Adrian de Souza: You need companies to encourage men to take the second half of the available maternity leave. When that happens, there will be a big step forward. LB

alex.novarese@legalease.co.uk