Misys GC: Profit for purpose
14 October 2013 | By Jonathan Ames
27 January 2014
27 January 2014
16 October 2013
28 October 2013
27 January 2014
Under GC Simon Dowler the legal team at software house Misys is expected to be as business-focused as anyone else in the company
Simon Dowler is the very picture of a modern general counsel. The head of legal at London-based banking software multinational Misys unhesitatingly describes himself as a businessman as much as he is a lawyer – if not more – and he strives to instil that attitude in his legal team.
“We’re not the sort of lawyers that sit at the end of a dusty corridor, with people occasionally visiting to ask if we can look at sub-clause 3 of sub-section 8,” Dowler says, explaining the front and centre approach he insists on for his lawyers. “We’re the people who will approve the pricing on deals before they go anywhere near the customer. My lawyers are multi-dimensional – they write the contracts, negotiate the contracts, agree the pricing both externally and internally alongside the sales team. They have a deep understanding of the products and the marketplace. And if that’s not unique in business, it is certainly unusual.”
It is an approach borne out of Dowler’s own career, which kicked off conventionally enough as an articled clerk at City shipping and aviation specialist Watson Farley Williams in 1989. After qualifying, he spent five years working on ship and aircraft financing “without ever actually seeing a ship or aircraft”.
That detachment encouraged a move in-house to BAe Systems in 1993. With an office overlooking the factory and the constant banging and clanking of metal arriving at one end and completed shiny planes leaving at the other, Dowler was very much at the sharp end.
“As a lawyer there, you were asked every question under the sun,” he recalls, “from people dealing with health and safety issues after bits of machinery had been dropped on them, to a senior executive’s divorce – and everything in between.”
The BAe position took Dowler round the world cutting high-value aircraft leasing deals. But ultimately he’d seen enough of the inside, outside and contract side of aeroplanes, although he retains a personal passion, being a qualified
pilot and having a share in a Piper Archer plane.
He moved to the defence side of the business at an opportune moment, as BAe was repositioning from being a metal-bashing business to a systems, services and software technology company. Dowler oversaw the legal elements as BAe bought several software businesses and senior management asked him to take over the reigns of one joint venture in South Africa. He spent six years as managing director.
“It was an unusual move. I had no particular experience of running a business or of software, but someone somewhere at BAe saw something in me – and I’m a quick learner,” he says.
Dowler eventually left BAe in 2005 to join a US data management company that was subsequently bought by Sun Microsystems. He took a commercial director role, responsible for all of the business’s non-North America operations, valued at some $1bn.
Two years later he joined German software multinational SAP to head its UK, Southern Africa and Nordic commercial operations, running both commercial and legal teams. In 2008 – in the heart of the global financial crisis – he jumped to Misys, but still in a commercial function, as director for global operations.
It was only at the end of July last year that Dowler slipped full-time back into a legal function, succeeding former general counsel Tom Kilroy, who had himself mixed commercial with legal, having been Misys’ interim chief executive for much of 2012.
Dowler says he fits in well at the organisation because it has been open to his desire to blend legal and business knowledge.
“As you move in-house you can build your business experience,” he says. “Today I regard myself as a businessman who happens to have a law degree and qualification, and some legal knowledge. But first and foremost, I’m a businessman.
The Misys legal team of around 30 lawyers is spread across London, New York, Singapore, Hong Kong and Australia. And the general counsel is unapologetic in his aim to recruit lawyers to the team that look a lot like Simon Dowler. “Misys is a sales organisation – we have to sell to survive and thrive. I don’t want to be the GC of the most risk-managed business that ever went bust. There is a balance that needs to be struck – and that is what I’ve been doing throughout my career.”
“You need to get people with the basic underlying legal knowledge, but who are a bit frustrated in the usual parameters given to use that knowledge.
“I come up against lawyers all the time in contract negotiations – both internal and external counsel – and it’s clear there are delineations within their roles and remits that we don’t have. You’ll often hear a lawyer say, ‘I’m sorry but that’s a commercial issue’ and then turn to someone else. But here you’re talking to the same people.”
However, as integral as Misys lawyers are to cutting deals, Dowler points to a difference between his staff and conventional sales personnel – his legal team members aren’t rewarded through commission.
“We are remunerated on the overall performance of the business,” he says. “For us, individual deals have got to make sense, not only in terms of the revenue number, – we’ve got to make a profit. And that’s over more than a one-year horizon.”
Dowler’s adopts a clinical approach to instructing external counsel – law firms are rarely used for customer transactions apart from in “exotic territories” where the company lacks internal knowledge, or when a deal goes wrong and he needs specialist expertise. Corporate work used to be different, with external advice frequently sought on structural deals because the firm was a listed company. But when US private equity house Vista Equity Partners bought Misys a little more than a year ago in a deal worth some £1.3bn, much of that work disappeared.
“Being in private equity hands has for me been something of a revelation,” comments Dowler. “I thought we ran a pretty tight ship before, but they have a laser focus on things that need to be done really well and that will drive the outcomes they want to see.”
Predictably, Misys’ private equity masters are keen to see legal spend slashed. That has forced even greater innovation at Dowler’s team, which has moved to electronic contracting, including a mechanism for scoring that assesses how quickly a contract can go through a process. The legal team gets its hands dirty by taking data out of contracts and plugging it into management systems.
“So when I look for support from an external lawyer, I’m most emphatically not looking for somebody to try to do the role of a commercial manager or commercial lawyer,” explains Dowler. “We want them to do specific things. And the other thing that is useful from outside counsel is an understanding of the market. Those lawyers allow us to benchmark some of our commercial and legal practices. For example, they can help us take a view on whether we are up to standard in areas such as IP indemnities. Are we requiring our customers to do more or less than other vendors?”
But the big message to lawyers externally and internally from Dowler is that traditional definitions of legal team responsibilities have been wiped away at Misys. “The legal team here is asked to make decisions, which we will be held accountable for at a business level as well as a legal level. We will share in the success of the business and we will participate in the risk.”
Simon Dowler, Misys
Position: General counsel Reporting to: Chief executive
Revenue: £370m (2011)
Main external law firms: Allen & Overy is regularly instructed
Pavel Klimov, general counsel for Emea, Unisys
Pavel Klimov joined Pennsylvania-based global technology giant Unisys nearly two decades ago, coming on board initially in an IT role, but joining the Moscow legal department when he finished his Russian law degree in 1994.
Two years later he transferred to the business’s UK offices and requalified as an English solicitor before doing stints with the company in the US and Australia. By 2006 he was back in Britain as general counsel for Emea.
Since then he has brought big smiles to the faces of the Unisys top brass, having slashed legal spend by more than 30 per cent in six years by renegotiating law firm deals and sending instructions direct to the English bar.
Klimov overseas a team of 11 lawyers, four in London, with the rest dotted around Europe.
“We have to cover a large geographic area and provide advice to a business facing a variety of legal problems in various jurisdictions,” says Klimov. “We do as much general commercial work in house as we can – negotiating contracts mainly.
“It can be a stretch when we only have a single lawyer in a country where there’s more than one deal on the go. So our lawyer has to be in two places at once. And, more often than not, the other party will come to the table with a team of external lawyers, so ours is a lone fighter.”
Unisys eschews a formal panel
in favour of a best friends approach. In England, Travers Smith generally gets the nod for corporate and employment matters. Klimov is also an advocate of directly instructing the bar, often bringing on board Littleton Chambers for employment and commercial matters.