Cable & Wireless’ head of legal Dan Fitz is most definitely still a hands-on lawyer.
He has spent the last six weeks in Hong Kong “intimately involved” in trying to get the necessary approvals from various regulatory authorities for the sale of the company’s Hong Kong division to Pacific Century Cyber Works.
He says that this approach is characteristic of a company which does not regard its heads of legal merely as managers.
“We don’t adhere to the idea that the more senior you are the less legal work you do,” he explains.
Fitz leads a team of 12 lawyers at Cable & Wireless’ headquarters that advises the company on “strategic” issues.
This includes major deals such as the Hong Kong sell-off. The day-to-day legal work such as grappling with the legal issues surrounding product development, is handled by another team of around 40 lawyers.
However, Fitz stresses how important it is that there is cross-fertilisation between the two teams and that the dividing lines are not fixed.
The teams do work for both Cable & Wireless and Cable & Wireless Communications, the company that was formed three years ago from the UK subsidiaries of Cable & Wireless, NYNEX Corporation and Bell Canada International.
The relationship between the “strategic” legal team and the “day-to-day” lawyers is a co-operative one that all falls under the guidance of the “law council”.
The council consists of Cable & Wireless’ most senior lawyers, who get together twice a year to discuss common issues such as staff development.
Fitz says: “We like to swap people around in jobs. Keeping people is one of the most important things you can do in a company.
“And when you are giving people an incentive to stay then quite a powerful incentive is to offer them the chance to spend six months in Sydney or New York. Knowledge about the group is vital and changing people’s jobs periodically helps this.”
However, Fitz does not apply the same logic to his chosen law firms.
When Fitz took over the head of legal job in March 1999 from Elizabeth Wall, who has now taken up a position at Equant, he carried on her policy of not having a set panel.
He says: “Cleary Gottlieb has worked with us for years and years and has delivered excellent service.
“Allen & Overy worked for us on a major transaction around four or five years ago and we were very impressed with the quality of work, so we kept on instructing them.”
As for the in-house team, there are five mergers and acquisitions specialists, one IP lawyer and paralegal, some employment lawyers and the rest are generalists.
Fitz says that it would be impossible to give an overall figure for how much work the team tackles in-house as it depends on the practice area.
He explains: “If it is competition or employment work then we handle nearly 100 per cent. For M&A work, if the deal is worth under £50m, then we can do it.”
For any deal worth over £50m, outside counsel is brought in but Fitz does not expect merely to send the work out and wait for the bill.
“We get outside lawyers in as part of our team and involve them here.
“In the legal department we expect to act as an interface between our commercial people, in-house people and the outside law firms. We will manage the legal relationships.”
Fitz’s remit includes overseeing the company’s global legal work, which also tends to be outsourced to the international offices of both Allen & Overy and Cleary Gottlieb.
He says: “In continental Europe it makes more sense for us to use Allen & Overy and Cleary Gottlieb.
“Allen & Overy is buying up offices in continental Europe and the London-based partners will ensure for us that we get the service that we need.”
He adds: “They will not want us to get bad service for fear of damaging their relationship with us.”
According to Fitz, there are also financial benefits in staying with the same law firms for international work.
“Sometimes we will negotiate a discount of legal fees for a particular transaction.
“Also, we have a relationship with our law firms that the more we spend with them the greater the discount we get on hourly rates.”
Outside Europe, whether the company uses a local firm or the office of an international one depends on existing relationships.
“If there is a well developed relationship with a local firm then we will use a local firm and if it’s a new geographical area then we will find out who is well regarded in the market.”
In the future, Fitz believes that the type of work that the department undertakes will change, as Cable & Wireless’ business develops into the internet.
So much so that in order to cope with the expansion, Fitz is currently looking for two more lawyers to bring into the team.
Last year, the company bought 12 internet service providers across Europe which Fitz describes as a big strategic step for the company.
“The internet is fast becoming our core business and we are doing so many transactions in that area. We have the second biggest internet backbone in the UK and we are looking to roll this out across Europe and the Far East.”
Head of legal
Cable & Wireless
|Organisation||Cable & Wireless|
|FTSE 100 ranking||11|
|Head of legal||Dan Fitz|
|Reporting to||Stephen Pettit, executive director, corporate department|
|Main law firms||Cleary Gottlieb Steen & Hamilton, Allen & Overy|