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In-house boosts aim to tighten purse strings
The past month has seen a host of new strategies from the top, resulting in a surge of work for in-house headhunters as companies look to bolster their legal teams.
Leading the way is US-based technology company NetApp, which is boosting its legal team by a massive 40 per cent.
Part of the plan includes increasing the 10-lawyer team, with a particular focus on appointing new blood in Amsterdam, Israel, Italy and Spain.
Last year the company hiked its turnover by $500m (£254.72m) to $2bn (£1.02bn). Europe, the Middle East and Africa (Emea) director of legal affairs Volker Weisshaar spends around e1m (£670,000) a year on external legal advice, but with the in-house capability expanded, that figure could drop significantly.
AstraZeneca company secretary and solicitor Graeme Musker has also set out plans to beef up his in-house transactional capability. The increase to the 25-strong legal team was prompted by a sharp increase in M&A work.
As reported by The Lawyer (26 February), Musker is also boosting the number of licensing lawyers as the pharmaceuticals company focuses on M&A rather than R&D.
Over at John Lewis, Margaret Casely-Hayford has made her mark since becoming director of legal services last year. Casely-Hayford is responsible for John Lewis's panel shake-up earlier this month, which saw Beachcroft appointed for the first time. The firm won a spot advising on property issues as the company launches a massive expansion programme. The company will create 35,000 new jobs by opening 10 new John Lewis stores and a string of Waitrose supermarkets over a 10-year period. Casely-Hayford also selected Eversheds, Pinsent Masons, Travers Smith and Wragge & Co for the panel, replacing Dechert and Freeman Box, which were dumped.
Solomon Osagie, the new group legal chief and general counsel at Global Switch, has not wasted any time with the announcement that he is launching a mid-year panel review of external legal firms. Osagie, who was headhunted to join the facilities management provider from Interoute, says that expanding the in-house capability and reviewing the external panel will help to reduce the company's legal spend.
Big moves afoot for BAE, EADS general counsel
February also gave rise to a number of departures, demotions and appointments.
On the demotion front, general counsel at BEA Systems Bob Donohue stepped aside following an investigation by Simpson Thacher & Bartlett into stock options backdating (the process by which stock options are selected using an earlier date to benefit from a lower price).
Donohue will move into the lesser role of vice-president of the legal department as a voluntary measure to boost investor confidence, and the new general counsel will report directly to the chief executive officer and to the board's governance committee.
Meanwhile, the European Aeronautic Defence and Space Company (EADS) has appointed Peter Kleinschmidt to succeed general counsel Diane de Saint Victor. Kleinschmidt was promoted after De Saint Victor quit for Switzerland-based power and automation technologies company ABB last year. Kleinschmidt was previously EADS senior vice-president for the office of the chief operating officer for finance.
Barclays and ABN differ on bill management
As companies scrutinise their bills ever more closely, two major banks have taken different paths.
Barclays has picked US supplier DataCert to implement the most rigorous management of legal spend ever seen by any UK institution by capturing information on how law firms staff their deals (The Lawyer, 19 February).
Taking a different tack, ABN Amro group deputy general counsel John Collins has decided against any immediate plans to introduce e-billing following a review of the cost to benefit ratio. The Dutch bank had been investigating ways to make savings on its external legal spend, with alternative billing methods posted as one of the options.
In-house groups' initiatives set out the way forward
The Commerce & Industry (C&I) Group has put forward several initiatives as part of a new two-year plan.
Part of the plan includes setting up several focus groups to concentrate on topical issues, including corporate social responsibility.
It is also planning to roll out a mentoring scheme for smaller companies' junior lawyers. Next month's roll-out follows a successful six-month pilot programme between general counsel and junior lawyers from companies with fewer than five in the legal team. Also high on the agenda for the C&I Group is best practice and firms' fee arrangements, which was discussed at a recent meeting of core members.
The C&I Group was not the only in-house organisation to make the headlines last month. The General Counsel 100 (GC100) published guidelines to ensure boards do not breach the new directors' duties in the Companies Act. Under the new law directors still owe their duties to members as a whole and not to stakeholders. To fulfil this role directors must take six factors into account: the interests of employees; the long-term consequences of the decision; the community and environmental impact; fairness between members; relationships with others; and reputation.
Emap general counsel and GC100 board member Nick Folland says: "We're not differentiating in our analysis of the law, but we are saying that it's up to the directors to do what they feel is appropriate and respond accordingly."