Leaving a law firm to take up a plum in-house role is always a difficult decision. Even more so if you run a fast-growing practice at a magic circle firm.
But as Novartis general counsel Thomas Werlen explains, some jobs are too good to turn down.
Back in 2005, the Swiss-trained lawyer was a partner at Allen & Overy (A&O) in the UK, brought in by corporate rainmaker Dan Cunningham to help build the US practice from London. The pair had worked together before – Werlen describes Cunningham as his mentor from their time together at Cravath Swaine & Moore – and it was an exciting period for A&O’s stateside ambitions.
By 2005, Werlen had gained some high-profile clients, including UBS, Swiss Re and Credit Suisse. “I like building a business, and A&O was a great platform to do that,” he recalls.
But then he got the call that would change the course of his career. When Werlen was first contacted by a headhunter about the Novartis post, he was more interested in gaining the Swiss pharmaceutical giant as a client. But after a series of meetings he began to change his mind, despite how well things were going at A&O.
“I was worried about leaving my people and my clients,” he says. “But this would be a place where I could bring all my experiences together. It was a perfect fit.”
Werlen confided in A&O senior partner Guy Beringer, who recognised that in spite of the loss of a promising young partner, it could be an opportunity for the firm to gain a big-spending international client.
So in early 2006, Werlen took the plunge. “I left on the best terms. It was a big change and it could easily have gone wrong,” he admits.
Four years on and the move has worked out pretty well, both for Werlen and for A&O. Cunningham has since left A&O for US litigation powerhouse Quinn Emanuel earlier this year. But A&O has, as Beringer predicted, forged closer links with Novartis since Werlen’s appointment.
A&O is one of three magic circle firms, along with Freshfields Bruckhaus Deringer and Linklaters, to win a place on the new global panel (The Lawyer, 28 September).
As for Werlen, he has overseen a root-and-branch review of legal services at Novartis, with his work recognised at The Lawyer Awards 2009, where he was runner-up in the In-House Lawyer of the Year category. One judge described him as a “transformative individual”.
Novartis is one of the world’s largest pharmaceutical companies, with annual sales of around $40bn (£25.2bn). It has a vast legal function, with 250 lawyers in Europe, the US, South American and Asia.
But when Werlen started, the company had no idea how much it was spending on external law firms. There was also little cooperation between the overseas offices. Werlen even encountered his lawyers instructing a firm that was suing Novartis in another jurisdiction. Clearly change was needed. “I wasn’t brought in to transform legal but it was my aspiration to bring the legal function to the next level,” he says.
Werlen instigated a five-year plan to overhaul the in-house team. It was divided into three key areas: organisation, people and culture.
In terms of organisation, he installed a new leadership structure with more central control, and set up global practice groups. Using the expertise in these global departments, he has brought more work in-house, saving $60m in legal bills. He hired global heads of practice to run the teams and appointed new country heads where necessary.
The new global panel is magic circle-heavy – Werlen says he wants firms that can advise on every area of law in every jurisdiction he needs – although Morrison & Foerster and White & Case also made the list.
There are now also country panels in each jurisdiction: the UK roster includes A&O, Arnold & Porter, Freshfields, Covington & Burling, Linklaters and SJ Berwin.
The final part of the jigsaw is culture. “We need to get a common culture, similar to Goldman Sachs or Cravath,” says Werlen. For Novartis lawyers that means going beyond the role of legal adviser and becoming an “accountable business partner”.
Werlen has established a host of measures by which individual lawyers and practice groups are measured, including accountability, business acumen, ownership, solution orientation and self discipline.
It is, Werlen admits, similar to the kind of management strategy used by law firms. But considering his background, this is no surprise.
“The A&O experience helped me a lot,” he admits. “There are similarities between building a practice and building a global legal function.”
However hard the decision was to leave the magic circle firm, it looks like Werlen made the right one.
Name: Thomas Werlen
Position: General counsel
Reporting to: Chief executive Dan Vasella
Company turnover: $40bn
Total legal capacity: 250
Main external law firms: Allen & Overy, Freshfields Bruckhaus Deringer, Linklaters, Morrison & Foerster, White & Case
Annual legal spend: $100m-$400m
Thomas Werlen’s CV
1995-99: Associate, Cravath Swaine & Moore, New York
1999-2000: Associate, Cravath Swaine & Moore, London
2000: Associate, David Polk & Wardwell, London
2000-06: Partner, Allen & Overy, London
2006-present: General counsel, Novartis