Survey tracks big in-house spenders
The survey of 98 in-house legal departments, conducted jointly by legal recruitment agency Laurence Simons International and management consultancy Hilde-brandt International, found that pharmaceutical and technology companies spend as much as €2.6m (£1.75m) per annum on legal services.
This figure compares with the €1m (£673,000) spent on legal services by the manufacturing sector and the €700,000 (£471,000) in the transportation industry.
Technology and pharmaceutical companies spend more per member on their in-house legal departments than any other industry, with as much as €1.7m (£1.1m) spent per lawyer per annum in comparison to an average figure of €377,000 (£254,000) across a range of other industries.
In terms of spend per in-house lawyer on external legal advice, Laurence Simons’ Naveen Tuli says companies across Europe are spending an average of €333,000 (£224,000).
“Interestingly, the great majority of in-house legal departments are still paying outside counsel on an hourly basis – possibly the least efficient way of managing costs,” says Tuli.
The survey uncovered a huge disparity in the amount that organisations spend on their in-house legal departments – from €100,000 (£67,000) per annum per lawyer to €1.7m (£1.1m) per annum in one pharmaceutical company.
On average, around three-quarters of expenditure on in-house legal departments is taken up by salaries and bonuses.
Motorola slashes legal spend
As first revealed in The Lawyer (31 October), the Chicago-based company halved its total legal spend since 2000 from almost $400m (£230.6m) to just $200m and has also halved the amount it spent on external counsel to $110m (£63.4m). It also cut its in-house legal department from 400 staff to 200.
The overhaul of the legal department has been part of a company-wide restructure, which has contributed to Motorola posting a record third-quarter profit for 2005.
In an exclusive interview with The Lawyer, Motorola global general counsel Peter Lawson said the legal department had been under pressure from management to cut costs.
“Motorola went through some difficult times about five years ago. We’ve taken a very sharp pencil to our patent-generation costs and developed a number of low-cost sources for our legal work.”
As part of the shake-up, Motorola’s UK head of legal Palwinder Hare was recently promoted to head the Europe, Middle East and Africa department.
Nestlé’s UK head of legal Isabelle Deschamps has obviously been taking a tough line. She told The Lawyer: “There’s been quite a big push to reduce Nestlé’s legal spend. We also wanted to reduce the number of legal firms on the panel to allow us to build a stronger relationship with a few firms.”
Gate Gourmet legal chief hits out at T&G
In an exclusive interview with The Lawyer (3 October), Yazhari defended the actions taken by Gate Gourmet during the high-profile striking saga and hit out at the T&G.
Yazhari told The Lawyer: “Had the union intervened to renounce the strike when it first occurred and encouraged the employees back to work, then apart from the real possibility that this would have ended the strike before anyone was dismissed, the company could also have considered whether to treat the strike as unofficial.”
Since he joined Gate Gourmet in September 2004 from US firm Chadbourne & Parke, Yazhari has played an integral role in the turnaround strategy drawn up by the company’s new management last November to stave off Chapter 11 bankruptcy proceedings.
The strategy includes the renegotiation of Gate Gourmet’s contract with BA and reforming the company’s outdated work practices to increase productivity.
In June, Gate Gourmet reached an agreement on working practices and a voluntary redundancy package with the T&G following several months of negotiations, but the deal was overwhelmingly rejected by staff.
Yazhari also defended Gate Gourmet’s decision to sack the striking staff. “Strikes like this can do significant damage,” he said. “For every minute our deliveries are delayed to our customers, we lose significant sums of money.”
Gate Gourmet has since agreed to selectively reinstate dismissed staff on the proviso they enter into agreements waiving future rights to bring unfair dismissal claims.
A month of moves
Former First Choice Holidays general counsel Andrew Garner has moved to take the helm of Associated British Ports’ (APB) legal functions, as first revealed in The Lawyer on 26 October.
Garner had been with First Choice for four years before joining ABP earlier this month. He succeeded Stephen Walsh, who served as the group’s general counsel for three-and-a-half years. Walsh left to join Global Aerospace Underwriting Managers as global general counsel. Garner qualified at Linklaters and moved in-house to Unigate before joining First Choice in 2001.
Meanwhile, property investment company Map-eley has recruited ex-Clifford Chance associate Ann Hodgetts for its ex-panding in-house legal team.
Hodgetts is expected to join the company later this month and will work alongside general counsel Michael Wilson.
At the same time, outsourcing and consulting company Xafinity has appointed Peter Stahelin as its first-ever head of legal.
Stahelin has joined the company from the Assoc-iation of Train Operating Companies (ATOC), where he oversaw legal and procurement advice for four years. Stahelin also spent nine years as a corporate lawyer with Fladgate Fielder.
With an annual turnover of £75m, Xafinity launched earlier this year and is a division of Duke Street Capital.