Imperial Chemical Industries Plc (ICI)
26 July 1999
27 March 2014
25 July 2014
16 January 2014
14 April 2014
8 July 2014
Last week ICI announced it would axe 600 jobs in the next 18 months,which should seem like a drop in the ocean for a company that boasts 50,000 employees.
But the redundancies are a natural development for a company which was lumbered with a debt worth millions when it bought a £4.9bn stake in Unilever’s speciality chemical businesses in 1997.
Since then, ICI has been restructuring furiously by selling off its businesses in a “transformation programme” aimed at converting the company from a commodity chemicals business into a specialist chemicals entity.
This recently resulted in the sale of its titanium dioxide, polyurethane and petrochemicals units to US firm Huntsman for £1.7bn.
The sell-offs have meant an increase of work for ICI’s legal team. And ithas also meant a decrease in in-house numbers as lawyers at the sold-off assets move with their division when the sale is completed.
Michael Herlihy, general counsel at ICI, says the company’s legal team is still fairly substantial.
The majority of its lawyers are concentrated in its UK and US offices,with smaller groups in Asia and South America.
According to Herlihy, the legal team has been involved in more than 45 deals since ICI’s restructure began in 1997. “We have been moderately busy,” he says.
Until recently, the in-house team has handled the majority of legal advice on the deals.
But Herlihy says: “It varies. On small and medium size deals we would expect to do it entirely in-house.
“But when you are as busy as we have been you become more dependent on outside resources as you don’t have as many bodies to go round.”
However, Herlihy says he always makes certain that a senior in-house lawyer is leading a deal with an internal and external team.
Freshfields was an adviser on both the Unilever deal and the recent Huntsman deal along with Allen & Overy.
But Herlihy is at pains to point out that ICI does not have a panel. “One thing that is probably not that common is that we have a number of ex-ICI colleagues who are now partners in firms.
“If you take the Allen & Overy example, [corporate finance partner] Ian Elder at the firm was at ICI.
“We have gone back to him on those transactions.”
He says the reason for this is the business structure of ICI and itsvarious units is highly complex: “Breaking these things up and parcelling them up into discreet pieces is really quite challenging,” he explains.
But Herlihy says that the company still has a heavy reliance on the in-house team.
“If you ask the board who are the critical players in delivering this transformation programme on the legal side, we would all say we have had excellent support from the outside firms.
“But at the end of the day, the people who have actually made the criticalcalls and got the thing done has been the in-house team.”
In terms of environmental issues, ICI does not a have a full-time lawyer working on the issue, despite various surveys which have pointed at the company as a heavy polluter.
Herlihy says: “The environmental performance has been improving dramatically and the company is spending very large amounts of money to make sure it improves - they have to.”
But because prosecutions for environmental infringement are uncommon, with just one outstanding in ICI Argentina this year, Herlihy says it does not merit a significant part of the in-house legal team.
He says this is due to the level of litigation and regulatory compliance work in the US.
But Herlihy is reluctant to discuss the issue: “I don’t think I’ve got an example I want to offer on that - it has slipped my mind.”
Head of legal
Imperial Chemical Industries Plc (ICI)
|Organisation||Imperial Chemical Industries (ICI)|
|FTSE 100 ranking||67|
|Legal function||Eight lawyers at head office, 80 worldwide|
|Head of legal||Michael Herlihy|
|Reporting to||Brendan O’Neill|
|Main location for lawyers||Millbank, London|
|Main law firms||Freshfields, Allen & Overy, Rowe & Maw|