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Transcript of LB175 p40-56
40 Legal Business June 2007
GENERAL COUNSEL
Photograph CHARLES BEST
LB175 p40-56 GC.qxp 23/5/07 15:53 Page 40
GENERAL COUNSEL
June 2007 Legal Business 41
Finding 15 minutes to talk to Barclays Bank’sgeneral counsel and company secretary MarkHarding isn’t easy. He’s a busy man, with day-to-day legal issues to attend to and externallawyers to instruct. There’s also the minormatter of Barclays’ possible union with theDutch bank ABN Amro. Should it go ahead, itwill be the largest financial institution mergerof all time, worth just under £45.6bn, goingby Barclays’ original share offer. At presstime, consortium led by The Royal Bank ofScotland was doing its very best to scupperthe deal with its own counter-offer. Few willargue when Harding says he’s got a fewthings on his plate right now.
‘It’s a very interesting job to be involved in,and boy am I involved,’ he tells LB. ‘I’ve neverbeen so busy in my life.’ It’s a sentimentechoed by several of the general counsel andin-house lawyers profiled in this feature.
Marco Pagni, company secretary and general counsel of Alliance Boots, has somesympathy for Harding. ‘He’s really in the
thick of it,’ he says. Not that Pagni has been taking it easy. Currently advising hiscompany on its £11.1bn takeover by privateequity giant Kohlberg Kravis Roberts & Co(KKR) and Alliance Boots’ deputy chairman,Stefano Pessina, he is at the business end ofEurope’s largest leveraged buyout (not tomention the first time a FTSE-100 companyhas been taken private).
‘There has never been a dull momentbetween merging with Boots and this transaction. It’s been a rollercoaster 18months,’ Pagni says. His former company,Alliance UniChem, completed its £8.1bnmerger with Boots last July, leaving himwith just a few months to draw breathbefore KKR stepped in.
‘Working in-house with a dynamic andgrowing employer is a fantastic career pathfor an ambitious lawyer,’ says Pagni. ‘I’vebeen fortunate to have been in the rightplace at the right time from that point ofview. It’s exciting and one of the reasons
why big companies are attracting the besttalent out of private practice.’
The importance of general counsel isincreasing rapidly, both internally – onmajor corporate deals, make-or-break litigations, company strategy and risk management – as well as externally – in themanagement of the law firms they use andthe influence they bring to bear. To reflectthis, LB has canvassed the opinion of theworld’s top law firms and lawyers, to assesswhich GCs have truly made an impressionon the global legal market in the past 18months, in the UK, US, Europe, the MiddleEast and Asia. From the pioneers who havebroken free from convention, to the GCswho have worked tirelessly for theiremployers on bet-the-company deals anddisputes, this global power list embracesboth the hugely influential GCs that everylawyer wants on their contacts list and therising stars who are shaping the future… LB
Pioneering spirits, influential powerbrokers, dealmakers, litigators and rising stars: Legal Businessselects the world’s top corporate counselANTHONY NOTARASAdditional material by Tom Freeman and Sam Kenworthy
global GCpower list
The Legal Business
A busy man: Mark Harding is
leading Barclays Bank through
what could be the biggest bank
merger ever seen
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42 Legal Business June 2007
GENERAL COUNSEL
KEY – POWER LIST TRAITS
Dealmaker Pioneer
Influence Rising star
Litigator
BARCLAYS BANK MARK HARDING
General counsel and company secretary
Market cap – £46.5bn
Legal department – 600
Preferred firms – Clifford Chance; Allen & Overy; DLA Piper;
Freshfields Bruckhaus Deringer; Linklaters; Lovells; Simmons & Simmons
Key quote – ‘You absolutely have to go to a firm that you are sure can deliver strength in depth.’
‘One of the things you have to do in-house is act as the conductor of the orchestra,’ explains Mark Harding, Barclays Bank’s general
counsel and company secretary. ‘It is not just the legal bits of that orchestra but the interface between that and the investment
bankers, the business guys, and the PR people. There are a vast number of angles to a deal like ours with ABN Amro. You are at the
centre of it all.’
With the possible exception of speaking to LB and posing for our photographer, the deal has taken up almost 100% of Harding’s
time. Harding’s deputy Judith Green and others within the bank have helped in picking up much of the slack elsewhere, such as on the
bank’s highly coveted panel review, which is set to be announced at the end of June.
‘It’s amazing how easy it’s been to empty the diary, but it’s been so clear that this takes precedent,’ Harding notes enthusiastically.
‘It’s a fantastic deal to be involved with. It has a huge number of legal angles, including litigation ones.’
The deal has underlined for Harding, who was formerly a partner at Clifford Chance, the huge difference in the involvement a GC
has on such a deal compared to external counsel. ‘It’s a much broader role. You can’t ever be as close to the rhythm of the transaction
as you are as GC,’ he says. And Harding has been there for every spit and cough. ‘I’m in the fortunate position that I’ve been involved
in every aspect of the bank’s strategy,’ he continues, ‘and have always been aware of what I’m trying to achieve in this area.’
In the case of the ABN Amro deal, Harding has kept his outside counsel, Clifford Chance, as close as possible. ‘Sometimes it feels
like they live around here,’ he says. Not that he has any regrets in having his former partners around to provide advice. ‘Given the
closeness of the relationship and the quality of the team and their ability in the Netherlands, they were absolutely the obvious
choice. This has chewed up vast amounts of resources at CC and you absolutely have to go to a firm that you are sure can deliver
strength in depth, and that favours the biggest firms.’
United Kingdom
GC FINDERName PageChandler, Mark (Cisco Systems) 53Diethelm, Markus (Swiss Re) 51Evans, Simon (Arcelor Mittal) 44Faure, Trevor (Tyco International) 49Hailes, Tim (JPMorgan) 47Hall, Bryan (Virgin Media) 49Harding, Mark (Barclays Bank) 42Krasik, Carl (The Bank of New York 54
Mellon Corporation)Lattal, Frank (ACE Bermuda Insurance) 52Mahy, Helen (National Grid) 48Marriner, Elaine (HMV Group) 46Mars, Tom (Wal-Mart) 56Nakamura, Yutaka (NTT DoCoMo) 56
Pagni, Marco (Alliance Boots) 44Palmore, Rick (Sara Lee) 56Pichler, Herbert (Bank Austria 51
Creditanstalt UniCredit)Ransom, Andy (ICI) 47Robinson, Paul (Warner Music) 55Sager, Tom (DuPont) 53Schlapbach, David (Western Union) 55Shoylekov, Richard (Corus) 46Smith, Brad (Microsoft) 54Van Eeckhout, Arnauld 50
(Bouygues Telecom)Wagener, Mark (Audi) 50Wood, Malcolm (Standard Life) 48Wright, Andrew (Dubai International 52
Capital)
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How can we help you? First Counsel was launched in 2003 and since that time we have established ourselves as a leading recruiter in the legal sector which includes not only private practice, but in-house positions as well. Our three dedicated in-house consultants based in London, Chris Cayley, Monique Mullins and Michelle Corneby, are all qualifi ed solicitors and have 20 years’ combined recruitment experience between them. Our colleague based in Dubai, Abby Seales, also has over six years’ recruitment experience and has recently worked on assignments throughout the Middle East.
We undertake a variety of contingent and retained assignments from junior level to General Counsel across banking & fi nancial services and commerce & industry and our clients include leading fi nancial institutions and FTSE 250 companies as well as mid-market and start-up businesses.
Since setting up the in-house function we have placed over 120 lawyers, not only in London, but also across the UK, Europe and the Middle East. Our honest and ethical approach to each assignment is fundamental to our success and we would like to thank our clients and candidates for their support during what has been our most successful year to date.
We also thought it would be a good idea to give those of you who don’t know us some examples of what we’ve been doing:
Head of Legal – FTSE 50 companyGeneral Counsel – FTSE 250 companyGeneral Counsel and Company Secretary – FTSE 250 companyEuropean Counsel – FTSE 50 companyAssistant European Counsel – Market-leading US companyInternational Counsel – Leading US insurance companyInternational Counsel – Leading reinsurance companyExecutive Counsel – High-profi le regulatory bodyDeputy General Counsel – FTSE 100 companyHead of International Legal Services – Market-leading listed IT companyFirst In-House Counsel – Two international hedge fundsSole Counsel – Subsidiary of bulge-bracket investment bankFunds Lawyers – Two US headquartered asset managersCorporate Lawyer – FTSE 100 companyFinance/Commodities Lawyer – European investment bankCommercial Lawyer – International fi lm companyCorporate Insurance Lawyer – International fi nancial services companyCommercial Lawyer – Aviation services companyCommercial Litigators – Leading professional services fi rmProcurement Lawyer – Leading US investment bank
If you are a lawyer who would like to discuss opportunities in the market in 2007, or a Head of Legal or HR Manager who would like to fi nd out more about us and the way we work, please contact one of us on the numbers below for a confi dential chat.
Chris Cayley 020 7332 6322 or chris.cayley@fi rst-counsel.co.uk
Monique Mullins 020 7332 6325 or monique.mullins@fi rst-counsel.co.uk
Michelle Corneby 020 7332 6330 or michelle.corneby@fi rst-counsel.co.uk
Abby Seales +9714 363 7244 or abby.seales@fi rst-counsel.co.uk
st.t: 020 7332 6332
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ALLIANCE BOOTS MARCO PAGNIGeneral counsel and company secretaryMarket cap – £10.8bnLegal department – 10Preferred firms – Slaughter and May; Allen & Overy; Baker & McKenzieKey quote – ‘At the top end of companies, we are seeing the growth of the lawyer as consiglieri.’
Marco Pagni, Alliance Boots’ tireless general counsel and company secretary, will no doubt be looking to 2008 and
praying for a quiet year. Formerly head of legal at Alliance UniChem, Pagni was eventually promoted to the top spot at
Alliance Boots, following Alliance’s £8.1bn merger with Boots last July. Such mergers inevitably lead to integration
issues, and Pagni was dealt the difficult task of restructuring the newly combined legal team and cutting out a quarter
of the staff. Most GCs could expect a few months for the dust to settle, but Pagni’s task was made even harder by the
looming shadow of the US private equity giant KKR, which alongside Boots’ deputy chairman Stefano Pessina, made a
public offer for the pharmaceutical giant earlier this year. £11.1bn later – having beaten off stiff competition from a
consortium of rival bidders including Terra Firma and the Wellcome Trust – KKR looks set to acquire Alliance Boots in
the UK’s largest ever leveraged buyout, and first private equity purchase of a FTSE-100 company.
‘It’s been a huge learning curve for me. Until you’ve lived through such transactions, you don’t really understand the
practicalities that get thrown up,’ says Pagni, who held the reins on all the legal aspects of the record-breaking deal,
following which there will be all manner of further issues for him to deal with. ‘KKR has announced it will invest in the
business in the next couple of years, so there will be plenty for the legal department to do,’ Pagni says.
No time for holidays just yet.
United Kingdom
ARCELOR MITTAL SIMON EVANS
Vice-president and group general counsel
Market cap – £38.4bn
Legal department – 170
Preferred firms – Cleary Gottlieb Steen & Hamilton; Shearman & Sterling; Allen & Overy;
Nauta Dutilh (in Holland)
Key quote – ‘We need answers and practical advice fast, but because we operate across so many
countries, we need firms to take a broad view.’
With 10% of the world’s steel production and some 320,000 employees across 60 countries,
Arcelor Mittal is the world’s largest steel company, formed out of the 2006 £26.9bn merger of
Luxembourg-based Arcelor and Mittal Steel, whose high-profile CEO is Lakshmi Mittal, Britain’s richest man.
Simon Evans, the newly merged company’s general counsel, has been at the legal epicentre of Mittal’s acquisitive steel empire
from the early days at Ispat International (which itself merged with LNM Holdings and International Steel Group to form Mittal
Steel in 2005).
In the case of the highly contentious Arcelor merger there were several hurdles along the way, such as the initial six-month-
long resistance from Arcelor’s management, who also considered a union with the Russian steel rival SeverStal, but eventually
relented after shareholder pressure. ‘Ultimately, Arcelor got a good deal for its shareholders,’ Evans says. ‘Obviously there
might have been some tension, but as people work together you find you are a lot more like-minded than you realise.’ Evans
will clearly have to overcome some tricky integration issues to make sure the merger runs smoothly, after which it’s likely the
company will return to its relentless acquisition drive. ‘The nature of Arcelor Mittal is that it doesn’t really stand still,’ Evans
adds. ‘From the legal point of view, there are a lot of challenges in terms of the deals.’
United Kingdom
44 Legal Business June 2007
GENERAL COUNSEL
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LB175 p40-56 GC.qxp 23/5/07 15:54 Page 45
United Kingdom
United Kingdom
CORUS RICHARD SHOYLEKOVGeneral counsel and company secretaryMarket value – £5.75bnLegal department – 15Preferred firms – Slaughter and May (key corporate); Shearman & Sterling (antitrust and US law); Norton Rose
(commercial and joint venture work); Burges Salmon (commercial and contracts); DLA Piper (environmental law); Freshfields
Bruckhaus Deringer (pensions, IP/IT)Key quote – ‘In a team like ours where there aren’t many of us, we need a true sense of partnership where the lawyers feel engaged
with us and the management, and are familiar with the business.’ ‘Richard’s often under a lot of stress but doesn’t show it; he keeps a cool head and takes the heat and emotion out of difficult
situations,’ says one Corus adviser. Such qualities were clearly required on 30 January 2007, when Shoylekov had to help steer Corus
through one of the most hotly contested takeover auctions in recent times, as the Anglo-Dutch steelmaker fielded acquisitive bids
from both India’s Tata Steel and Brazil’s CSN. ‘It started at 4.30pm, with a maximum of eight rounds, each one lasting not longer than one hour,’ Shoylekov recalls. ‘It was
designed to be completed in the course of one night, while all the main markets on which the companies were listed were closed. If
there wasn’t a clear winner by the final round, then each company had to enter a sealed bid. And that was how it was resolved at
half past midnight.’ Tata Steel eventually emerged the winner with a knockout £5.75bn bid, bringing to a close the two-month
bidding war that Shoylekov unsurprisingly refers to as ‘the most intensive period of my working career’.
Having achieved the best possible result for Corus’s shareholders, Shoylekov must now
focus on the task of integrating Corus into India’s giant Tata conglomerate.
HMV GROUP ELAINE MARRINER
Company secretary and head of legal
Market cap – £461m
Legal department – 1
Preferred firms – Freshfields Bruckhaus Deringer (corporate); Simmons & Simmons (competition);
Nabarro (IP); Reynolds Porter Chamberlain (commercial and contract work); SJ Berwin (EU competition)
Key quote – ‘The employees are very passionate here about the product and I wanted lawyers who
understand that culture.’
Every other GC on this list has a significant team of lawyers backing them up on the big-ticket work as
well as the day-to-day stuff. In the case of Elaine Marriner, head of legal at HMV Group, she has… well
actually it’s just her. Surprising for one of the country’s best-known retailers, which in 2006 had a turnover of £1.8bn. For-
tunately for HMV, Marriner is, in the words of one of her external counsel, ‘an outstanding lawyer with a firm grip on the
full and varied range of legal issues that hit her desk’.
Such qualities came to the fore last year, when the company, which also owns Waterstone’s, acquired the Ottakar’s
chain of bookstores. The deal was received with a great deal of animosity in literary circles, who regarded the acquisition
as another blow to the UK’s independent booksellers. Against a background of strong opposition from authors and pub-
lishers, Marriner and her team (which included Simmons & Simmons) successfully obtained clearance from the Competi-
tion Commission. This achievement in itself would have merited Marriner’s inclusion in the list, but she also had to deal
with an eventually aborted takeover approach from the private equity house Permira, who put in a formal offer to the
board, as well as Tim Waterstone’s high-profile bid to buy back Waterstone’s. While the latter received more press inches,
it never actually made it to the board stage. For Marriner, who prior to this had never led or defended a takeover, it was, in
her own words, ‘a rollercoaster year’.
46 Legal Business June 2007
GENERAL COUNSEL
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United Kingdom
JPMORGAN TIM HAILESManaging director and associate general counsel (UK)Market cap – $181bnLegal department – 26Preferred firms – Simmons & Simmons; Ashurst; Clifford Chance; Linklaters; Allen & OveryKey quote – ‘Perception of culture can be as inhibiting and damaging as outright homophobia.’Tim Hailes, JPMorgan’s associate general counsel, is best known for his role in pushing diversity
and inclusivity up the law firm agenda. The legal market has been notoriously slow in bringingitself up to speed with modern expectations in the diversity stakes – witness the low percentage of women being made
partner in this year’s promotion rounds (just 20% among the top 25 law firms) – so Hailes’s decision to step up and bring the
issue into the foreground is highly refreshing. ‘We see it in business terms, frankly,’ he says. ‘It’s about getting the best talent
through the door. The law firms are in the same boat. They are crying out for associates and if you have a choice of five firms
and you happen to be gay, which one are you going to pick? It’s not the one that has the perception of being homophobic.’
Working closely with the gay rights group Stonewall, Hailes asked all of JPMorgan’s key legal advisers to attend a seminar on
best practice. The initiative was taken so seriously that most relationship partners turned up for a series of open and productive
discussions. Hailes concedes that firms still have a way to go. ‘Some of it is perception of culture, which can be as inhibiting and
damaging as outright homophobia,’ Hailes explains. ‘It’s a little bit more subtle and perception is an issue. People need to see
other people who are comfortable in being out. Stonewall is a resource that can help the firms to change their culture.’
Hailes’s achievements go beyond diversity, however, and his excellent reputation within the capital markets industry was
confirmed when he was named global chairman of the joint trade association working group on retailed structured
products. Hailes is also chairman of the ISDA Fund Derivatives Committee.
ICI ANDY RANSOM
General counsel, executive vice-president of M&A, and company secretary
Market cap – £6.6bn
Legal department – 75
Preferred firms – Mayer, Brown, Rowe & Maw; Freshfields Bruckhaus
Deringer; DLA Piper (employment and general commercial); Herbert Smith (litigation)
Key quote – ‘We are interested in cost, but our main focus is on finding like-minded, excellent
individuals who practise the law in a way we appreciate. It’s much more about individuals
than firms. We wouldn’t go for a firm just because it’s got lots of offices in lots of places.’
The growing stock of heads of legal within their various companies couldn’t be better illustrated than through
the career of Andy Ransom at ICI, whose multifarious duties within the company means that, as he puts it, he has ‘a very large
business card and not enough hours in the day’. The consummate in-houser, Ransom started his career at ICI in 1987, the same
year he qualified as a solicitor. Having climbed the ladder to head the legal department in 2005, his portfolio within the
company now goes way beyond the law. As executive vice-president of M&A, he plays a pivotal role in running the group’s
corporate transactions, such as ICI’s recent £1.2bn disposal of its fragrances division, Quest, in November 2006 – a deal that
was largely handled by the in-house legal team, with some outside counsel from Freshfields Bruckhaus Deringer. Ransom
played a similarly crucial role on the sale of Uniqema, ICI’s oleochemicals and surfactants business, last year.
Ransom would prefer to see more of the legal work done in-house, but concedes that, on certain matters, outside counsel
has to be called in. ‘We’re more interested in common sense-applied guidance and judgement than we are in black-letter law,’
he says. In March 2007, Ransom’s remit was also expanded to manage ICI’s businesses in India and Pakistan, presumably
pre-empting another order of business cards.
United Kingdom
GENERAL COUNSEL
June 2007 Legal Business 47
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48 Legal Business June 2007
GENERAL COUNSEL
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NATIONAL GRID HELEN MAHY
Company secretary and group general counsel
Market cap – £20.8bn
Legal department – 75
Preferred firms – CMS Cameron McKenna, Linklaters (key corporate); Eversheds, Hammonds,
Pinsent Masons (general commercial); Denton Wilde Sapte (regulatory); Dundas & Wilson (key
real estate)
Key quote – ‘If I’m using one of our key firms and we are tendering in competition, I would expect
them to go exclusively with me. It’s quid pro quo for me giving them the work.’
As the new chair of the increasingly influential GC100, the lobbying and networking group for
general counsel at FTSE-100 companies, the legal market will be hearing a lot from National Grid’s
group company secretary and general counsel, Helen Mahy. The GC100 has had its say on an
increasing number of substantive legislative matters, most notably the recent 2006 Companies Act, and has
helped round up a previously disparate group of GCs into a substantial and unified voice.
While the group will focus more on legal issues facing their companies, it does provide a forum for GCs to share common
grievances they might have on their respective external law firms. As a result, Mahy is someone who should be listened to –
on these pages she has spoken of her growing concern at law firms becoming less willing to work exclusively with clients on
tenders. Beyond her GC100 duties, Mahy has also been highly active on the transactional front, such as National Grid’s
$11.8bn acquisition of the US gas distribution company KeySpan, and the recent £2.5bn sale of its mobile masts business.
STANDARD LIFE MALCOLM WOODGeneral counsel and company secretaryMarket cap – £7bnLegal department – 100Preferred firms – Slaughter and May; Dundas & Wilson; BurnessKey quote – ‘In the time since I joined Standard Life, recognition of the importance of thein-house function has gone up considerably. That is a sign of the times we live in.’From April 2004 to 10 July 2006, one overwhelmingly huge task dominated Malcolm Wood’s working life, namely the
demutualisation and subsequent £4.6bn IPO of the insurance giant Standard Life, where he is general counsel and
company secretary. Over two years in the making, the job was beset with regulatory and political hurdles from day one.
Policyholders – of which there were 2.4 million – had to approve the process, which, had it gone wrong, could have
become a magnet for lawsuits, while regulators also scrutinised every step. The scale of the undertaking was reflected in
the number of advisers required, with at least six firms directly or indirectly involved (Slaughter and May and Dundas &
Wilson spearheaded the work in London and Edinburgh respectively). Given the legal ramifications and challenges of such a large demutualisation, Wood’s management skills and legal
mind were absolutely crucial, and those involved attest to the fact that he handled the job with aplomb, without losing
sight of his day-to-day role as general counsel. The successful IPO in July granted the insurer with an immediate place in
the FTSE 100, providing Wood with another challenge: adapting to life as head of legal at one of the UK’s largest plcs.
Wood’s achievement was recognised in February, when his department was named in-house team of the year at the Legal
Business awards.
United Kingdom
United Kingdom
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June 2007 Legal Business 49
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TYCO INTERNATIONAL TREVOR FAUREGeneral counsel EMEAMarket cap – $64bnLegal department – 50Preferred firm – EvershedsKey quote – ‘It’s the job of the general counsel to be the sword and the shield of the business.’
When it comes to the way clients manage their external law firms, if UK private practice lawyers are
looking out for a sign of things to come, then they should look no further than at what Trevor Faure,
Tyco International’s EMEA general counsel, has done. When he joined the company in 2004, Faure
had a hefty roster of 250 external law firms on his books. After a lengthy review process, Faure finally
narrowed the 250 down to just one law firm, Eversheds, for the entire EMEA region. This unique two-
year deal with the UK national firm includes a £10m flat fee for legal support across 33 jurisdictions.
This covers day-to-day legal matters – although extra transactional work will be done at pre-agreed hourly rates – and includes a
24-hour legal helpline and a £300,000 extranet system for online reporting and invoicing.
The figures were arrived at after a rigorous analysis of the company’s legal expenditure in the past, and Faure is adamant that
Tyco will be making significant savings. ‘That is part of the deal, it’s not me just hoping,’ he told Legal Business in February. Faure
follows in the footsteps of US counterparts Mark Chandler at Cisco Systems and Tom Sager at DuPont, who have instigated similar
models. He is unlikely to be the last.
VIRGIN MEDIA BRYAN HALL
General counsel
Market cap – $8.8bn
Legal department – 40
Preferred firms – Ashurst; Fried, Frank, Harris, Shriver & Jacobson
Key quote – ‘The legal team, under Bryan Hall’s outstanding leadership, has been integral
during this exciting and challenging period.’
Mergers, front-page legal disputes and failed takeovers – some in-house lawyers can spend
their entire careers sheltered from such headaches, whilst others, such as Virgin Media’s
general counsel Bryan Hall, experience the full gamut in just 18 months. His company’s high-
profile spat with BSkyB – over channel-pricing agreements and the ownership of ITV – has caught the media’s
attention in a way that most corporate dust-ups could never dream of. To most onlookers, Sir Richard Branson and his Virgin brand
may be the public face of Virgin Media, but in reality his company, Virgin Group, has just a 10% share in the upstart cable,
broadband and telecoms business, which is trying to muscle its way into Sky’s domain.
The dispute has inevitably been branded as Murdoch v Branson, but such hyperbole won’t distract Hall from the job at hand, and
if his diligence on the litigation side matches his achievements on the transactional, then Sky could be in for a tough time. Hall has
already overseen the $7.7bn merger of ntl (where he originally worked) and Telewest, which closed in March 2006, as well as the
subsequent acquisition of Virgin Mobile just four months later in July. The Virgin Media rebranding and proposed bid for ITV (even-
tually aborted when Sky bought a 17% stake in the channel – now under investigation following Virgin Media’s complaint to the
regulatory authorities), ran almost concurrently. As one partner says: ‘The legal team, under Bryan Hall’s outstanding leadership,
has been integral during this exciting and challenging period.’
United Kingdom
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50 Legal Business June 2007
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BOUYGUES TELECOM ARNAULD VAN EECKHOUT
General counsel
Market cap – €21.5bn (for parent company Bouygues)
Legal department – 60
Preferred firm – Proskauer Rose
Key quote – ‘The pressure of the law in general is much more than it was ten years ago. People
realise the business can be damaged by bad regulation.’
‘Very smart fish thrive in any pond,’ says one US partner, reflecting on Arnauld Van Eeckhout,
general counsel at France’s third-largest mobile phone company Bouygues Telecom, which is part of the French con-
glomerate Bouygues. Van Eeckhout certainly thrived when faced with the sternest test of his career so far, when he took a $140m
damages claim to the US courts against Tekelec, a US manufacturer of servers, whose malfunctioning product Bouygues claimed
was responsible for the major network shutdown it suffered in November 2004. Given the nature of the US and French relations
at the time, taking on such a case on American soil was never going to be easy, especially against a tight limitation-of-liability
deadline, but Van Eeckhout knew that because the US court system was the only place that would allow him to access Tekelec’s
documents, he had to go there to back up Bouygues’ claim. ‘We knew it would be difficult, but we also knew the American system
could demonstrate its neutrality,’ recalls Van Eeckhout. ‘We were involved on the French legal stuff and technical stuff, while all
the American procedure was in the hands of the US lawyers.’ Two years, four million pages of documentation and 50 witness
depositions later, Van Eeckhout’s strategy, which required him to spend a good portion of his time in the US, proved correct and
Bouygues achieved a favourable settlement.
AUDI DR MARK WAGENERGeneral counselMarket cap – €10.2bnLegal department – 50Preferred firms – Freshfields Bruckhaus Deringer; Clifford Chance; Nörr Stiefenhofer Lutz;
Gleiss Lutz; Amarchand Mangaldas (India); Clayton Utz (Australia)Key quote – ‘Usually the in-house lawyer was at the end of the line and they came to you when
everything had happened, but now they come to us at the beginning, which also shows how our
position has changed.’
For truly out-of-the-box thinking, few GCs have gone quite as far or been quite as innovative as Dr Mark Wagener at Audi.
When it comes to the external management of one’s law firms, it’s one thing to set up a panel review, but another thing
entirely to start your own law firm, which is exactly what Wagener helped Audi do in January, through the formation of the
two-lawyer Anwalte Am Forum (Attorneys at Forum). ‘A company cannot run a law firm, but it is very closely connected to us,’
says Wagener. ‘We have a contract with them so that, on the one hand, we guarantee they get enough of a caseload, but if
they get more profits we get a share.’ Wagener adds: ‘We thought it was a smart idea to give two lawyers a chance to start their own business, but we also get an
understanding of how a law firm works. It really is a good experience.’ Wagener has also been at the forefront of pushing the
GC agenda in Germany with a series of seminars tackling the issues facing the market. ‘He is somebody who is actively
working on improving the level of expertise in the GC’s world in Germany,’ says one German partner.
Nevertheless, it’s the new law firm that really enthuses Wagener, as well as the development of forward thinking within
his legal department. ‘We asked our young lawyers, of between one and five years of experience, to give us their thoughts on
what the Audi legal department would look like in 2015 and they came up with a whole bunch of interesting ideas,’ he says.
‘We call them the young and the wild. The spin-off of the law firms was one of their recommendations.’
Vorsprung durch Rechtsabteilung, as the Germans would say.
France
Germany
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SWISS RE MARKUS DIETHELMGroup chief legal officer, member of the executive boardMarket cap – CHF42.9bn (€25.9bn)Legal department – 154Preferred firms – Freshfields Bruckhaus Deringer; Wilkie Farr & Gallagher; Skadden, Arps,Slate, Meagher & Flom; Paul, Weiss, Rifkind, Wharton & Garrison; Simpson Thacher & Bartlett Key quote – ‘To proactively support the corporate idea is what distinguishes an in-house lawyer from an equal-level
external lawyer.’
When Markus Diethelm, group chief legal officer of Swiss Re, was appointed to the reinsurance giant’s executive board
at the start of the year, it starkly illustrated the growing importance of the legal function within the insurance industry.
‘Elevating the GC to an executive board member was sending out the message that the GC was at the same level as the
chief financial officer and other members,’ Diethelm reflects. Diethelm has played a key role on milestone litigations, such as the highly emotive dispute with Larry Silverstein,
the developer of the World Trade Centre, who argued he should receive two payments in the wake of 9/11 up to the
policy’s $3.54bn limit, because the twin towers were attacked by two planes in two separate events. Diethelm under-
standably took a hands-on role in the massive litigation in which the jury eventually sided with Swiss Re in May 2004,
limiting the reinsurer’s payment to a single one, a decision that was upheld in the Court of Appeal last year. ‘As a Swiss
company in a highly emotional litigation in New York City, it was going to be highly critical to separate the tragedy from
the insurance issue,’ says Diethelm. ‘We had to show that even in the most severe of circumstances we fight for the
sanctity of the wording in our contracts.’ Since then, Diethelm has focused more on the transactional side, overseeing
Swiss Re’s $7.8bn acquisition of GE Insurance Solutions in June 2006.
Austria
Switzerland
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BANK AUSTRIA CREDITANSTALT UNICREDIT HERBERT PICHLER
General counsel
Market cap – €20.3bn
Legal department – 50
Preferred firms – DLA Piper; Grohs Hofer & Partners; Lansky, Ganzger + partner
Key quote – ‘External lawyers should solve my problems, not generate new ones. I don’t need lawyers
who explain the total legal problem to me; they should only give answers to my questions and come to
the point quickly.’
For those firms with an interest in tapping the burgeoning markets of central and eastern Europe, they
would do well to make Herbert Pichler one of their first ports of call. As general counsel of Bank Austria
Creditanstalt UniCredit, which is not only the largest bank in Austria but also one of the largest in the wider
CEE, he is a unique gateway into a highly active part of the new EU. As one Austrian partner puts it: ‘He’s a
very important person to know.’
Throughout his career, Pichler has successfully consolidated his position through a succession of bank mergers,
first when Bank Austria merged with local rival Creditanstalt, and then through its subsequent takeover by
Germany’s HypoVereinsbank in the early 1990s and the more recent acquisition by Italy’s UniCredit Group in
November 2005. Since then Pichler has helped integrate his legal team within the wider group as well as maintain Bank Austria
Creditanstalt’s brand and autonomy in the CEE. ‘The legal department has a very important role because it’s more or less an
insurance for the board,’ Pichler says. ‘You have to keep everything and ensure they don’t run into any problems.’ More work could
lie ahead, as UniCredit is rumoured to be looking at a possible takeover of France’s Société Générale, which in a year of giant
banking mergers would only be exceeded in size by the increasingly likely union of Barclays and ABN Amro.
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DUBAI INTERNATIONAL CAPITAL ANDREW WRIGHT
Head of legal
Market cap – Not publicly listed
Legal department – 3
Preferred firms – Freshfields Bruckhaus Deringer; Ashurst; Morrison & Foerster; Akin Gump Strauss
Hauer & Feld; Vinson & Elkins
Key quote – ‘We always look first to instruct law firms that have a presence here in Dubai.’
With Dubai now the destination of choice for most international law firms, and with Middle Eastern
funds and companies increasingly looking to spend their money outside of the region, there couldn’t be a more
interesting time for Andrew Wright to helm Dubai International Capital’s (DIC) in-house legal function. DIC – an investment arm of
Dubai Holding, itself ultimately owned by Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum – has been one of the most active
Arab funds in the European market. Recently it came to prominence with its ultimately aborted bid for Liverpool Football Club, and
its 2005 acquisition and subsequent £1bn sale this year of The Tussauds Group, which netted DIC a tidy £200m profit. Activity in
Germany has also increased, with the fund recently instructing Ashurst on its €850m acquisition of the manufacturer Mauser. Having
joined the fund in 2005 from Vinson & Elkins, Wright has become a crucial contact for corporate lawyers in the region.
‘It’s been very challenging, but challenging in a positive way,’ Wright says. ‘It’s a very demanding role to play, forming that
bridge between external counsel and the investment team.’ For now, at least, there is no formal panel, but Wright has good
access to information on all the law firms used by Dubai Holding and its subsidiaries. ‘I meet with the general counsel at Dubai
Holding along with the other general counsel within the group on a regular basis, so we get the chance to informally discuss and
compare the relative performance of law firms and their fees,’ Wright reveals.
ACE BERMUDA INSURANCE FRANK LATTALChief claims officerMarket cap – $20.2bnLegal department – 1,000 claims officersPreferred firms – Clyde & Co; Hill Dickinson; Kendall Freeman; Barlow Lyde & Gilbert; Berrymans Lace Mawer; Davis LaveryKey quote – ‘We’re a great client. We take risk and embrace risk, and that’s a place where law firmswant to play.’
Based in the ACE Group’s headquarters in Bermuda, chief claims officer Frank Lattal oversees all thelegal claims that come through the doors of one of the world’s largest insurance and reinsurancecompanies. He is by anyone’s standards a very busy man. And as client contacts go, he’s a very attrac-tive one, with a lot of legal work at his fingertips at both the high-volume and high-value ends of thespectrum. At the latter end, according to one UK senior partner, Lattal ‘really cares and follows everytwist and turn’.
Given the size of the claims department, a good portion of the ‘discretionary’ claims are handled in-house, but that still
leaves a vast array of ‘non-discretionary’ claims where ACE is contractually obliged to defend the insured. Given the amount of
legal work, Lattal is always looking for ways to rationalise his legal spend and external law firms. ‘We try to adjudicate as many
claims as we can in-house, but invariably, because of our obligation to defend the insured, we will retain lawyers,’ Lattal says.
‘In a perfect world I’d have fewer law firms handling more of our outside assignments. We are continually trying to refine our
use of outside counsel to fewer firms.’
Dubai
Bermuda
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DUPONT TOM SAGER
Vice-president and assistant general counsel
Market cap – $48bn
Legal department – 150
Preferred firms – 40 mid-size US law firms, and Eversheds in the UK
Key quote – ‘I have an inherent bias against large law firms in the US.’
Tom Sager is one of America’s most prominent in-house counsel. It’s not overdoing it to say that
he has transformed the way law firms interact with their clients. DuPont worked out what it
was spending too much on, in terms of legal spend, and decided to proactively collect together
a group of ‘partner’ law firms to work in tandem on ways to cut costs, but increase work flow,
with the theory that each party, ultimately, would benefit.
With a legal spend of $200m last year – 95% of that in the US, and often in the products
liability field – the imperative of such actions becomes clear. The performance-metric driven relationship with outside
lawyers ‘has led to a 40% reduction in the average cost of a case filed against DuPont,’ Sager says, ‘because of the alliance between
our in-house staff and the primary law firms to meet targets.’ Eversheds retrained its entire litigation staff to work with Sager’s
‘DuPont legal model’, and it has never looked back.
Despite DuPont’s status as a vast global chemicals-based conglomerate, Sager is a vehement sceptic of the growth-for-growth’s
sake that he sees in the legal market. ‘My concerns centre around costs, culture, and conflicts,’ he says. ‘As the US firms grow, you
lose your leverage as a client. There becomes an indifference to the ways you work with them. There’s not the level of client focus
that we require. Medium-sized and smaller firms are more flexible, more nimble, and ready to adjust. In the US now, there’s a high
level of defensiveness with respect to shortcomings on work done by private practice firms. It is unfortunate. You need candour.’
CISCO SYSTEMS MARK CHANDLERSenior vice-president and general counselMarket cap – $160.5bnLegal department – 154Preferred firms – Baker Botts; Fenwick & West; Morgan, Lewis & Bockius; WilmerHale; Eversheds
Key quote –‘Successful outside counsel is an integral part of Cisco’s success.’ True to the founding spirit of the company for which he works, Mark Chandler has made waves in the US for his straight-talking
approach to modernising the lawyer-client relationship. Forget the way things used to be done – if you want to keep up, use
technology, and use it well. ‘It’s simple. As Cisco gets bigger, the share of revenue devoted to legal expense needs to get smaller,’
Chandler says. ‘I don’t care what billing rates are. I care about productivity and outputs.’
Chandler, like Tom Sager at DuPont, who also features in this line-up of stars, believes that the ‘most fundamental misalignment
of interests is between clients who are driven to manage expenses, and law firms that are compensated by the hour’. Chandler has
some solutions. ‘The winners will be those who are able to standardise services to meet clients’ cost-management and predictability
needs, where good is good enough,’ he predicts. He believes that top-quality boutique law firms will thrive, while the cost structures
of larger centralised firms will put them at risk. In short, information is being standardised, so the focus should be on customer
service and cutting costs. ‘We have a fixed fee with Morgan Lewis for our US commercial litigation,’ Chandler points out. ‘Not surprisingly, this has made
Cisco litigation avoidance a key goal of Morgan Lewis.’Chandler concludes: ‘Business realities will be driven by new technology. We can seize the chance to offer more value to clients.
Successful outside counsel is an integral part of Cisco’s success.’
United States
United States
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MICROSOFT BRAD SMITHSenior vice-president, general counsel, corporate secretary, legal & corporate affairs
Market cap – $297bnLegal department – 350Preferred firms – K&L Gates; Covington & Burling; Sullivan & Cromwell; White & Case; Linklaters; Freshfields Bruckhaus Deringer
Key quote – ‘We prefer a more flexible approach; we don’t tend to go with global one-stop shops. We
select the right lawyers for the right assignment.’‘Brad Smith has the rare but vital strategic talent to simplify things in court,’ says one Brussels-based partner who has worked
closely with Microsoft’s general counsel on the software giant’s massive competition disputes with the European Commission.
Beyond his day job in overseeing the legal department of one of the world’s largest companies, Smith should certainly be well-
versed in court procedure, having been involved in major antitrust and patent disputes on both sides of the Atlantic. ‘I may get
involved in the high-level negotiations that take place, but I’m also able to delegate and hopefully empower the people who do
the work,’ Smith explains. In the case of the EU, the Commission imposed a €500m fine for allegedly abusing its dominant position, a ruling that
Microsoft appealed in the European Court of First Instance last year. The decision on that appeal is still pending. Whichever way
it goes, few will dispute Smith’s handling of the case and his management of the vast armies of lawyers that were required in
Brussels and elsewhere. ‘He is remarkable in that he is both charismatic and commercially aware, and has a view of the broader
picture,’ says another partner, who also notes Smith’s ability ‘to praise and to criticise with courteous clarity’. Not a quality
all GCs share.
THE BANK OF NEW YORK MELLON CORPORATION
CARL KRASIK
General counsel
Market cap – $49bn
Legal department – 140 (post-merger size not yet confirmed)
Preferred firms – Reed Smith; Sullivan & Cromwell
Key quote – ‘The critical quality is for the outside law firm to buy into the “ownership” of the
issue. If they care as much about it as you do, then you really have a partner.’
Despite hailing from the smaller party in the stunning December 2006 merger announcement
between Mellon Financial Corporation and the Bank of New York, Mellon general counsel Carl Krasik will take the top
spot as general counsel of the new entity. Mellon, which was bought by Bank of New York for just over $16bn, has come a long way
since its days as a local Pittsburgh entity set up to support the area’s industrial titans, who included Henry Clay Frick and Andrew
Mellon. Even before the merger, Krasik’s company had become one of the world’s largest asset managers. The combined company
has operations in 100 markets across 37 countries.
Krasik, a former Reed Smith lawyer, has indeed demonstrated his commitment to his old firm – but as in so many cases of the
deep-seated firm-client institutional relationships that the best companies often enjoy – the process has been a symbiotic affair.
Not least because Reed Smith’s recent global expansion – including the takeover of Richards Butler – has been driven by the need to
reflect the activities of such a key client on the global platform. Krasik, 62, is aware of the risks that involves. ‘The more places and
time zones you’re in, the greater pressure on management to create a firm,’ he explains.
Despite the immense clout Krasik now wields in terms of legal spend, his priority is familiarity and commitment to his bank.
‘I want loyalty to be shown,’ he says.
United States
United States
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WESTERN UNION DAVID SCHLAPBACHGeneral counselMarket cap – $16.4bnLegal department – 67Preferred firms – Sidley Austin; Davis Polk & WardwellKey quote – ‘Given all the new emphasis on corporate governance in the US, such as stock-optiongrants and insider trading, law departments are expected to exercise a lot more oversight over thewhole business operation.’
If ever there was a time that the world of international money transfers needed a strong head for legal and regulatory
issues, it is now. Since 9/11 the movement of money between countries, especially those with links to terrorism, has been
heavily monitored. It is an environment that David Schlapbach, general counsel at Western Union, one of the global leaders
in money transfers, has become acutely accustomed to. ‘The legal role requires a technical legal lawyer but also a critical
lynchpin to the commercial success, so Schlapbach is vital to that strategy,’ says one US partner who works closely with him.
‘One of the challenges is making sure the regulators understand who we are, how we do business and how we differ from the
banks,’ Schlapbach explains. In the past 12 months, Schlapbach’s role has gone beyond just dealing with regulatory hurdles and difficult central banks.
Originally owned by First Data, Western Union was spun off in October 2006, a deal in which Schlapbach played a critical
role. When Western Union was still part of First Data, Schlapbach’s position was more or less autonomous, although he still
had to report to another GC. Now he answers only to Western Union’s CEO, with an extensive and globally diverse legal
department under his remit.
WARNER MUSIC PAUL ROBINSON
General counsel
Market cap – $2.58bn
Legal department – 60
Preferred firms – Paul, Weiss, Rifkind, Wharton & Garrison (corporate); Simpson Thacher & Bartlett
(securities and regulatory); Olswang, Herbert Smith, Sidley Austin (EU competition)
Key quote – ‘We go to the same group of firms with our most important deals. It has so much to do with the
individual lawyer.’
Paul Robinson readily admits that his working life at the moment is a bit like Groundhog Day, but with fewer
Bill Murray gags and more EU competition law. The repetitive matter in question is Warner Music’s will-
they-won’t-they courtship of the UK’s EMI. The two record labels have stepped up to the alter three times
already, only for someone to object at the last minute. At time of going to press, Warner Music and EMI were rumoured to be in
talks for a fourth time. ‘It’s always been something different,’ Robinson tells LB, on the very day he was officially appointed
general counsel at Warner Music (having been acting GC since 1 January). ‘In 2000, it was competition. In 2003, Time Warner sold
to somebody else. Last year, it was the European Court of First Instance decision.’
Naturally, Robinson won’t comment on any ongoing negotiations that might be taking place, but suffice to say, the company’s
European lawyers, Herbert Smith and Sidley Austin, are being kept busy. Should any EMI talks be thwarted, Warner Music still
plans to diversify into new areas as CD sales start to dwindle, and much of this will be through acquisitions. ‘We make investments
in artists and hopefully make them so popular that they get to benefit in areas like touring and merchandise,’ says Robinson. ‘We
are interested in getting involved in those revenue streams.’ For now, however, all eyes seem to be on EMI.
Robinson can at least take heart from the fact that in most romantic comedies the lead eventually gets the girl. Even in
Groundhog Day.
United States
United States
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Pushing the diversity envelopeSARA LEE RICK PALMOREExecutive vice-president, general counsel and company secretaryMarket cap – $12.9bnLegal department – 70Preferred firms – SonnenscheinNath & Rosenthal; Reed Smith
WAL-MART TOM MARSExecutive vice-president and general counselMarket cap – $194.5bnLegal department – 156Preferred firms – Gibson, Dunn &Crutcher; Slaughter and May
NTT DOCOMO YUTAKA NAKAMURAGeneral counsel and managing directorMarket cap – $76.6bnLegal department – 40Preferred firm – Herbert SmithKey quote – The responsibility placed on Mr Nakamura speaks volumes for the estimation in which
he is held.
Whereas some heads of legal perform roles that are exactly what they say on the business card – leading the company’s in-
house legal capability as a support function – others take a more proactive, executive role. Yutaka Nakamura is head of legal at
NTT DoCoMo, one of Japan’s most progressive mobile communications companies, but he also sits on the company’s executive
committee. As the company embarks on a roll-out of its pioneering products across the globe, it looks to Mr Nakamura for commercial
as well as legal input. His skills and knowledge on both sides were visible in NTT DoCoMo’s withdrawal from Hutchison 3G UK
and Hutchison 3G HK Ltd, incorporating both contentious and non-contentious issues, with two disputes worth US$1bn each.
Furthermore, 2006 also saw the company involved in trademark and patent disputes in relation to its ‘i-mode’ technology with
KPN Mobile, E-Plus and mm02, with litigation in Germany and the potential of parallel litigation in Belgium, Holland and
England. Success in this is essential to NTT DoCoMo’s international ambitions – and the dual responsibility placed on Mr
Nakamura speaks volumes for the estimation in which he is held.
In the ever-increasing push to bring diversity up the agenda in the US legalmarket, one could argue that it was Sara Lee’s Rick Palmore who set thefuse, while Wal-Mart’s Tom Mars brought the heavy artillery. Palmoreprovided the inspiration in early 2004 through a letter he wrote to his counterparts in other corporate legal departments, suggesting they make a concerted push to limit relationships with law firms who don’t show anycommitment to diversity. Through his time in private practice, Palmore hadwitnessed the lack of diversity first hand, having been the first black partnerat two of his firms: Sonnenschein Nath & Rosenthal and Wildman, Harrold,Allen & Dixon. Palmore has remained committed to his diversity initiative,and on 27 March this year he designated Sonnenschein and Reed Smith ‘SaraLee preferred partners’ based on their diversity performance and quality oflegal services. The preferred-partner status is something that Palmore andthe food and household goods giant, Sara Lee, review every year.
It wasn’t until Mars at Wal-Mart waded in, however, that the legal market was picked up by its lapels and given a truly thorough
shaking. Having already been inspired by Palmore’s actions, Mars’s eyes were opened after noticing that 82 of his 100 top relationshippartners were white men. As the US’s largest company, with an annual legal spend in the region of $200m, when Mars issues a decree his law firms sit up and listen. This is what happened in June 2005 when he wrote a letter to his top 100 law firms stating that ‘Wal-Mart will end or limit our relationships with law firms who fail to demonstratea meaningful interest in the importance of diversity’. Mars went a stepfurther and demanded that at least one woman and one person of colourmust be among the firm’s five relationship lawyers. The fallout resultedin Wal-Mart changing 40 of its law firms and moving some $60m ofbusiness. Suddenly, US firms were forced to pay attention, so much so that in August 2005 one firm, Womble Carlyle Sandridge & Rice, was motivated into a strategic alliance with Molden Holley Fergusson & Thompson, a boutique which at the time consisted of eight African-American lawyers.
Mars: gave market thorough shaking Palmore: witnessed lack of diversity
Japan
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