Gawie Nienaber: CSC

IT outsourcing giant CSC’s Gawie Nienaber is happy with Europe’s progress, but eager law firms will have a hard time prising work from his department. By Steve Hoare

I’ve done this job, as European general counsel for CSC’s EMEA [Europe, Middle East and Africa] operations, since 1993. The analogy I use is that it’s a bit like sitting on top of a balloon. The organisation’s grown under me. When I started there were just three lawyers. Now in Europe we have 25. It’s grown commensurately with the way CSC’s business has grown,” says CSC deputy general counsel Gawie Nienaber.

When Nienaber joined US outsourcing giant CSC, European revenues were around $300m (£164.7m). Now the European operations turn over $3.7bn (£2.03bn), with 25 per cent of CSC’s global revenues derived from the EMEA region.

CSC was created in 1959, but the European operation has only begun to take off over the last few years as a result of the vogue for large outsourcing projects. It really kicked off around 10 years ago, when the company won its flagship contract with BAE Systems.

South African Nienaber was initially based in Brussels, but moved to London in 1998. Prior to that he was in private practice, spending periods in London and Luxembourg (with Maitland & Co), and New York and Washington DC (with Hunton & Williams).

The lawyers at CSC sit within the different business divisions. The European operation has five regions. The biggest unit is the northern region, which comprises the UK, Ireland and the Netherlands. The second-largest unit is the central region of Germany and German-speaking Europe. There is a Nordic region, a western region, which comprises France and Belgium, and the southern region consists of Spain, Portugal and Italy.

Nienaber has lawyers based in each of these regions. Each has a very close working relationship with their respective management team. Similarly, Nienaber has a very close working relationship with the chief executive of EMEA, George Bell. “I’m a great believer in a fairly collegial, collaborative working style. I’m a great believer in delegation and getting people to get on with their jobs,” says Nienaber.

All the lawyers are focused on IT transactions. In the UK, Nienaber has three lawyers who look after new business, with one of those responsible for the financial services products business. In addition, there is a lawyer who looks after property and human resources and another who looks after procurement and supports the contract managers, who are assigned to each major customer. Nienaber stresses that the roles are to some extent interchangeable, with each lawyer helping out in different areas.

In Germany there is a split between the lawyers who look after IT law and those who look after HR and corporate law issues. “That’s partly driven by the idiosyncrasies of the German legal system,” says Nienaber. “This is where UK adaptation of EU social policy and social chapter is going to be interesting, because we’re going to see more and more of that.

“Germany has a fairly legalistic view of HR because so much of it is rule-driven. Companies over a certain size have so-called co-determination rights, so that the supervisory board, which I sit on, has an equal number of employer and employee representatives. So, by virtue of that dialectic, by definition there’s more focus on rule compliance. It’s just a more legalistic way of looking at the world and our lawyers are responsive to that.”

Ironically, although CSC is an outsourcing company, Nienaber tries to outsource as little work as possible. It is only on the very biggest transactions that CSC uses outside assistance, but there are certain areas where the team simply lacks the expertise. One area of work that is outsourced regularly is the pensions aspects of an outsourcing transaction.

Nienaber explains: “The one issue with being engaged in outsourcing is that you take people on under Tupe [the Transfer of Undertakings (Protection of Employment) Regulations], or its equivalent in Europe, with their pre-existing terms and conditions. Although it’s not a legal requirement in the UK – at least not yet – invariably proposals are requiring the suppliers to take on the pension regulation as it is structured.”

Baker & McKenzie partners Robert West and Chantal Thompson are called upon regularly to advise on pensions issues. The other area that is outsourced as a matter of course is litigation, but CSC does not have many disputes and Nienaber has no regular litigators.

“We don’t see the need for a formal panel. It’s apparently flavour of the month, but I’ve never really seen the logic in it. I really go with individuals, not with firms. When we outsource, it’s typically fairly high volume because we’re truly out of resources. If we’re buying a company and there’s a due diligence that covers 25 countries, you need to use a firm or firms that can cover those bases. But those transactions don’t come along every other day,” says Nienaber.

For IT law matters, Nienaber believes that there are plenty of good lawyers outside London. “The one extraordinary thing, which is often difficult for non-UK lawyers to understand, is that you have this rather strange split between London and the provinces. From my perspective, where I’m trying to manage my cost, it makes sense for me to look carefully at people outside London. The downside of those firms is that they don’t have the resources to support you on large transactions,” he says.

As such, Nienaber uses John Yates at IT boutique V-lex. Yates is a former IBM in-houser who runs his 10-lawyer firm out of Worksop, Nottinghamshire. He assisted CSC on its successful bid for the North
West region of the NHS IT project. But it is not all boutiques. Baker & McKenzie gets a share of IT work and corporate matters, and Nienaber rates Lovells’ competition group.

“The problem that we have is that the good lawyers are often representing our competitors or our clients. One can typically find a way around that because counsel are very sensible about dealing with conflicts or potential conflicts,” says Nienaber.

Despite this liberal attitude, Nienaber warns: “I’d think that the lawyers who work a lot with us would put sufficient value on our relationship to apply their good judgement to decide whether it would be something I would have a problem with.”

During the last year CSC finally closed a complex transaction with Marconi with no assistance from outside counsel. The CSC team did work with a subcontractor in the form of BT’s lawyers Bird & Bird, though. The team also acted alone on the Royal Mail Group outsourcing. While Nienaber does not talk much about the firms he uses, he is quick to praise those working for customers.

“The deals that run efficiently are the ones that have expert support on the other side, says Nienaber. “The ones that don’t are typically the ones that haven’t been well thought through in terms of process and deliverables. Those deals are often the ones where the advisers aren’t as experienced as they might be.”

The one that got away was Aspire, the outsourcing of the Inland Revenue’s IT systems. CSC, together with Accenture, was the incumbent, but lost out to Capgemini and Fujitsu Services.
“The second generation transfers are going to be difficult, because clearly the customer is taking on a certain amount of risk by replacing the supplier after the 10-year term. The industry is pretty much 10 years old. The contracts signed then either have or will be running out soon. We’re going to be struggling with these issues more and more… The contracts need to, and generally do, contain proper regulation to protect the client and the supplier as well,” explains Nienaber.

Nienaber himself takes a fairly hands-on role in transactions. He obviously has a supervisory role, but also works closely with each lawyer designated to a job, which in some cases is him. “I work with them to try and shape solutions or to consider risk or problem-solving. I’m involved in just about every major new piece of business,” says Nienaber, before emphasising the amount of autonomy his local lawyers have.

It was the Danish division that brought in the business that really fires Nienaber’s imagination and his admiration.

In 2001, Team CSC was launched, the company’s cycling team. Bjarne Riis, the 1986 Tour de France winner and the “Danish Beckham”, according to Nienaber, approached CSC with a view to sponsoring the team that he coached. A keen triathlete, Nienaber was delighted to sign a four-year sponsorship deal. While the team has yet to repeat Riis’s triumph, it has won stages of the Tour and continues to inspire Nienaber as he attempts to shrewdly manoeuvre his team into a winning position.
Gawie Nienaber
Deputy general counsel
CSC

Statistics
Organisation CSC
Sector IT
Turnover $3.7bn (£2.03bn) in Europe, Middle East and Africa (EMEA), $14.8bn (£8.13bn) globally
Annual legal spend $1.5m (£823,500)-$2m (£1.1m)
Employees 23,000 in EMEA, 92,000 globally
Legal capability 25 in EMEA, 80 globally
Deputy general counsel Gawie Nienaber
Reporting to General counsel Dan Fisk
Main law firms Baker & McKenzie and V-lex