In-house interview: Network solution
7 October 2013 | By Joanne Harris
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A panel review resulting in a network of advisers rather than a formal roster, plus a client-serving ABS to nurture, shows BT group GC Dan Fitz is ready to push boundaries
When you think of BT, what comes to mind? Chances are, you think of it as the company that provides you or your firm with broadband or phone services. But as BT’s general counsel Dan Fitz reveals, there is an awful lot more to the company than telecoms these days.
There is also an awful lot more to BT’s legal team than providing legal services to the corporate client. Earlier this year the company registered its own ABS, BT Law, and Fitz is determined to ensure BT is up-to-speed with all the changes in the legal market.
Fitz is in charge of a global legal team of around 400 lawyers and other staff, plus 100 people on the compliance side.
He took over as BT company secretary late last year following the decision of incumbent Andrew Parker to leave the business.
Under Fitz, lawyers and staff are split into teams according to what they do. Each business unit also has a dedicated legal team with its own general counsel, taking day-to-day responsibility for legal needs.
Although the team is big, the number of legal staff has decreased significantly in the past five years as BT overall has downsized its payroll. The company has lost close to 50,000 staff worldwide in that time, and its legal capability has shrunk by about 20 per cent.
“The cliché of doing more with less is absolutely true,” says Fitz. “That’s why we had to step back and analyse what we were doing.”
In early 2012 BT extended the term of its panel by a year to give it time to carry out a full review of its external advisers. The process resulted in a ‘network’ of advisers rather than a formal panel, with existing external counsel keeping their places. In addition, BT added a range of other firms – such as media specialists Carter-Ruck, Olswang, Sheridans and Wiggin, and regional firms – to its regular roster.
Fitz says he began the review process by looking closely at what the in-house team was doing. Unusually, BT asks its own lawyers to keep a record of what they are doing to make sure the right people are doing the right work. Fitz and the procurement team tried to put the work in the context of the new legal environment, looking at what BT could do in-house and what needed to be outsourced, and to what type of firm.
Moving beyond that, Fitz examined the wider market.
“We’ve been playing in the alternative legal provider space for five years,” he says. “What’s surprising is that a number of alternative legal service providers have moved up the value stack.”
As an example, he praises those firms and other providers that are seeking to give clients information on the way they are accessing legal services.
During the process, BT recognised that its original small-panel approach was no longer practical. It also changed the procedure for the review, relying less on the classic beauty parade approach and looking far more at commercial issues.
“Last time we went for a full-blown panel pitch with heavy involvement from procurement – it didn’t add much value,” admits Fitz. “This time we wanted to really focus on commercial discussions as well as skills, and we wanted to make sure we had a good match for BT’s projected legal needs.”
The network of law firms is complemented by a legal process outsourcing provider, currently United Lex, which carries out around 30 per cent of BT’s UK commercial work. The company is in the process of reviewing this relationship as well.
Separate from the classic legal services delivered by the in-house team, BT is exploring the possibilities of its ABS. BT Law grew out of a service provided by the company’s lawyers handling claims arising from issues with its fleet of vehicles, engineers on home visits and so on.
When BT began getting queries from third parties about claims it seemed natural to extend the service. Gaining an ABS licence means BT can take any such issues for third-party clients all the way to court if need be. Employment advice is also being offered. In both cases, Fitz expects clients to be companies of a similar profile to BT with a fleet of vehicles and a large workforce, but with much smaller in-house teams. The initiative is targeted at corporates and not the consumer market.
“It takes the legal function from something viewed as a cost to something that creates revenue,” Fitz explains. The ABS could also have a positive knock-on effect on the legal function. “Some deals that will get done down the line that will mean we’ll have to hire people.”
BT Law is staffed by the team that deals with BT’s own claims, but the ABS has separate record-keeping and books, and staff are effectively seconded to BT Law clients as and when they are needed.
BT is looking at other ways to combine its services – for example, through offering technology systems via the IT provider Tikit, which it acquired last year, or combining pitches for fleet services with BT Law.
Fitz is confident that pushing the boundaries of what legal teams do is the way ahead. He is embracing changes in the legal market and believes the UK is leading the way on this front.
“The UK is more open to innovation than just about any other market I’m aware of,” he notes. “It’s remarkable how much change there has been already.”
In BT it is clear that Fitz and his team will stay very much on top of any changes that lie ahead.
Dan Fitz, BT
Position: Group general counsel and company secretary
Reporting to: chief executive Gavin Patterson and chairman Sir Mike Rake
Legal capability: 400 (worldwide)
Legal spend: £30m (UK)
Main external law firms: (UK and Ireland) Bird & Bird, Carter-Ruck, Cleaver Fulton, CMS, Crosse & Crosse, Doogans, Freshfields Bruckhaus Deringer, HBJ Gateley, HBM, Matheson, Napier, Olswang, Proskauer Rose, Reed Smith, Sheridans, Trowers & Hamlins, Tughans, Wiggin, Wright Hassall
Christina Blacklaws, director of policy, The Co-operative Legal Services
The Co-operative Legal Services has much in common with an in-house ABS such as BT Law.
We share a corporate approach, the backing of a household brand and, no doubt, a determination to provide excellent, consistent and national legal services.
Our focus, in line with our brand values, is firmly on the consumer; helping and supporting ordinary people in resolving their legal problems.
We, like other large ABSs, will be engaged in developing new methods of service delivery using the wealth of technology that is now available. We will be reaching out to the public, raising their awareness of our services and how we might be able to help them and their families. We will partner with like-minded organisations to ensure we cover all our customers’ needs in a way that works for them. This consumer focus will be relentless and we plan to pursue it with passion and commitment.
There is room in the market for many types of legal businesses, but the ABS structure, which enables lawyers to work in partnership with other professionals and provides significant flexibility in terms of investment, is particularly well-placed to succeed in the present turbulent environment.