Sector: IT and telecoms
FTSE 100 ranking: 49
Market capitalisation: £7.47bn
Legal function: Two lawyers
Head of legal: Company solicitor Richard Francis
Reporting to: David Bailey, national director
Main location for lawyers: London
Being at the helm of one of Europe’s leading IT services companies is no easy job for CMG company solicitor Richard Francis.
Keeping on top of developments in the business – which provides clients with information and communications advice and develops systems and software – requires the two in-house lawyers working for the company to take a very hands-on approach.
“I think lawyers need to be more involved in the day-to-day running of the business,” says Francis. “We have gone into the business and we go to the meetings, which is probably a little unusual in terms of an in-house department.
“Some companies try to keep their legal teams separate, but we took the view that that was not the best way forward. You get a better feel for the business by rolling your sleeves up and getting involved yourself.”
Francis set up the company’s legal capability five years ago, and two years ago recruited the second member of the team. He says that there is now room for a third lawyer, and he already has an assistant.
The team in London deals with all the business’s European in-house work. CMG is active in 40 countries worldwide, and its European offices are located in The Netherlands, Germany, France and Belgium.
But Francis says that he has very little involvement with those countries as they outsource nearly all their legal work to private practice.
“I do provide some advice and assistance to the other offices, but it is general commercial advice. The UK market is very competitive so there tends to be a lot more contract negotiation here than elsewhere.”
The fast-moving nature of the business means that Francis prefers to use big law firms when he needs external advice. The in-house team does all the company’s IT-related matters, but it outsources company and commercial work.
CMG acquires a lot of small companies, and uses Linklaters & Alliance for the majority of that work. Last month the firm acted for them on the £7m purchase of UK specialist IT solutions company Software Resolution, which was CMG’s second such transaction in March.
Francis says: “The company tends to grow through small acquisitions in niche areas, and we wouldn’t do those in-house, they would be done by our outside firms.”
He says that when he uses outside lawyers he likes a firm that can react quickly and put a lot of people on a job.
“It is really the range of expertise that we want from firms, which is why we keep going back to Linklaters or Baker & McKenzie. They have lots of people who know lots of things and are able to react quickly,” he says.
“We want to be able to get on the phone and say we have a problem and we need to talk to someone now. The big firms can put someone on it immediately – although you pay for it, of course.”
Francis says that the niche firms which are emerging as strong players in IT and telecoms are attractive because they are cheaper, but he prefers having a strong name behind him.
“There is always a certain amount of comfort if you get a report from a big name firm which you don’t necessarily get if you use a smaller firm which no one has heard of.”
Francis says that because the IT industry is developing so quickly he needs to use larger firms which are up-to-date with developments across the board.
“It is all about quickly, quickly – and you don’t tend to get that in industries like manufacturing. The bigger law firms tend to have more libraries and more researchers, and they have more people who can afford to specialise in niche areas.
“Whatever the problem is, the big firms have probably got some bright young spark who is up to speed on it. If I worked in manufacturing I don’t know if I would use all these highfalutin firms.”
CMG tries to keep its firms under constant review and always has an eye on new opportunities. The company has used Nabarro Nathanson in the past for a specialist piece of IT work and Francis would not rule out using it again for a similar job.
He says: “I don’t go in for beauty parades – I have given them in the past but I think it’s almost impossible to assess them because you just get lots of people giving you great presentations and any of them I’m sure would be quite capable.
“I respond to things like leaflets that firms send through saying ‘do you know about this?’ If it’s something I don’t know about I will read it and I think that’s cost effective marketing.”
Apart from being on the lookout for another lawyer to join the in-house team Francis also plans to improve the legal department’s involvement in the business, which he sees as a top priority.
CMG has just taken on two commercial managers to get involved in negotiations on behalf of the company, and they will work much more closely with the in-house team.
He says: “By the time most things get to the lawyers the deals have been struck and it’s too late to change things.
“We need to get prominence and get involved earlier on, and that is what we are seeking to achieve through these two new commercial managers. We are sort of instructing them on what to say from the start.”
In an industry as progressive as IT and telecoms it is perhaps not surprising that both CMG and its legal capability look set to expand further in the next few years.