24 April 2000
When company secretary and solicitor Stephen Charnock joined Hays in 1991, it was at just the right time.
The distribution and support services group floated in 1989. But on the launch day of the initial public offering, the Chancellor of the Exchequer resigned, causing the markets to oscillate wildly.
Three years after the flotation, Hays put its initial experience of the stock markets behind it and started on a period of growth and its purchase of French food and wine distributor Fril sparked the need for an in-house lawyer in the region.
In 1993 Hays acquired recruitment agency Modus, in 1995 it bought French distributor Jarlaud and in 1997 it purchased French-based Mayne Nickless.
The company remains acquisitive resulting in a surge in employees, rising from 6,000 in 1991 to the current level of 25,000.
The group now operates 70 international businesses, all trading under the Hays brand name, delivering a range of products including business-to-business services for industrial, commercial and professional customers.
The company's three core focuses are distribution, commercial and personnel, which Hays is continuing to bolster through organic growth and acquisition.
But while the planned development of the business was a daunting prospect for Charnock in 1991, he says it is one he has relished.
He says: "It was a very different organisation at that time. Hays was young, newly listed and very much embarking on growth. You just got your head down and got on with it."
Despite this expansionist strategy, Charnock, who was the company's first in-house lawyer, has deliberately kept the in-house provision to a minimum. The team has only gained four solicitors under his tenure.
Charnock says: "We have deliberately kept our corporate head office small. As the group has developed and people have left, we have tried to replace them with professionals. We do not try and provide a legal service across the board."
Instead, Charnock and his team draw on their expertise to select external firms, which they are "very reliant on".
He says: "We are very cost conscious but we do not perceive beauty parades or tendering as appropriate for our particular type of work.
"At the end of the year, we focus on what we have had for what we have paid. Between us we like to think we have a pretty good working knowledge of the firms and know the people in them."
The main firms the company uses are Freshfields and Stevens & Bolton, which is based near Hays' corporate head office in Guildford.
The group has been using Stevens & Bolton's 17-partner practice for a range of corporate work for the last five years.
Charnock says that the firm and company have developed together. "It is not so much just a local firm. Its particular experience has grown with the expansion of the group," he says.
On a larger scale, City giant Freshfields handles the bulk of the group's work both in the domestic and international markets.
Charnock says that Freshfields' ability to provide this dual service makes it a firm he is happy to keep working with.
Hays forged its relationship with Freshfields in 1989 when it advised on the flotation.
Charnock says: "For the biggest transactions, the sheer weight of expertise that Freshfields can provide on a project far outweighs anything another firm can offer.
"We use Freshfields' overseas offices in a number of countries, certainly in France and Germany. It has the advantage that when we do a multi-national project the London office's scale enables the co-ordination of the whole.
"We have distribution projects that run right across Europe and Freshfields is able to deliver the service and pull it all together."
But while Freshfields is contracted in a number of jurisdictions, this does not mean that Charnock will always use it.
In The Netherlands Charnock prefers to use Dutch firm Nauta Dutilh.
He says: "We do not go to [Freshfields' international operations] just because they are Freshfields, we go to them because we consider the individual offices we deal with to be good. If we did not, we would do the other thing."
For example, in Belgium Hays uses Freshfields' office, but not as a matter of course. It also uses local firms in smaller regions such as Austria.
The group has to be particularly aware of the problems involved in organising and running a cross-border operation.
Charnock says: "We try to make sure that we are culturally sensitive because there are some areas of the law that really do not translate well."
Charnock also has a policy of not forcing the business groups within the company to use his preferred firms.
He says: "Each business group would use a variety of firms. We do not impress on our businesses how they buy their legal services but we help them find firms of the right fit."
The group often uses McGrigor Donald, which Charnock says looks after Hays in both the UK and Scotland.
Although Charnock intends to keep his in-house team tight, if the group's growth over the last decade continues at its current pace, more and more firms could well be cashing in on their success.
Company secretary and solicitor
|Sector||Business support servies|
|FTSE 100 ranking||46|
|Head of legal||Stephen Charnock, company secretary and solicitor|
|Reporting to||Ronnie Frost, chairman|
|Legal function||Four lawyers in the UK, one in France|
|Main location for lawyers||Guildford|
|Main law firms||Freshfields and Stevens & Bolton|
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