The arrival of Mark Chambers at American Express (Amex) as managing counsel for Europe, the Middle East and Africa in February this year heralded a significant reduction in the number of firms it instructs and one of its largest M&A deals ever outside North America.
Last week Amex completed the acquisition of London-based Threadneedle Asset Management from Zurich Financial Services, with Zurich being advised by Freshfields Bruckhaus Deringer. The £340m deal was a key step in Amex’s strategy to expand its financial services business globally. It was the company’s first major corporate transaction since 1984.
Slaughter and May displaced Linklaters and won the work to advise Amex on the high-profile deal. This was the firm’s first corporate deal for Amex after years of advising the company on regulatory matters.
Slaughters’ relationship with Amex was strengthened after Chambers, a former Slaughters corporate lawyer, joined the company from GE Insurance Holdings. Slaughters had been the company’s principal corporate adviser while Chambers was there. Indeed, Slaughters lead partner Paul Olney was instructed by Amex’s US legal team after it was rubber-stamped by Chambers. “I was asked by a colleague in the US whether I felt Slaughters would be a good choice for the Threadneedle deal. It was one of the easiest questions I’ve ever been asked,” says Chambers.
As part of the deal, Threadneedle will continue to manage certain assets for Zurich in the UK. That includes a substantial portion of Threadneedle’s assets under management for an initial term of up to eight years. It will also maintain its close working relationship with Zurich’s UK distribution network, which will continue to have access to Threadneedle’s products and services. Consequently, the acquisition will not affect the structure of the companies’ legal departments.
Away from deals, Chambers is working towards aligning Amex’s legal function to reflect changes to the company’s business units. Traditionally, for example, there was a distinction between the banking and travel-related sides of the business. As Chambers says, the alignment will “make sure that we support the businesses effectively with the inevitably limited resources we have at our disposal”. He adds that this will be achieved by increasing the legal team’s flexibility. “Pigeonholing people too narrowly into supporting one line of business or a particular product is neither effective nor efficient,” says Chambers.
Amex’s business, still best known for credit cards and traveller’s cheques, extends far beyond this, says Chambers. “We have a mix of heavily regulated and less heavily regulated activities in the group,” he adds.
For instance, Amex is also a major player in the travel sector. Indeed, it is one of the world’s largest travel agencies, operating over 1,700 travel agencies open to the public and a further 2,000 additional locations booking travel for corporate clients. Additionally, Amex operates international banking and insurance businesses.
Chambers’ other main focus is on growing the 12-strong legal team. “The priority is to fill a couple of open positions we have in the team in the consumer card business and supporting general contracts. I don’t think anyone has any doubts that these positions are most definitely needed and we need to fill them with the best quality people,” says Chambers.
Recently, Chambers hired German-qualified Doris Hektor from the asset management side at Axa. Prior to that she worked at JPMorgan. Commenting on Hektor’s appointment, Chambers says: “The complexity of activity in Germany had reached a stage where, certainly on a cost basis, it made sense to add a lawyer.”
Additionally, next month GE Capital regional counsel for Europe Tim Ehinger is joining Amex’s legal team in London. He will be the lead lawyer managing Amex’s relationships with all the businesses that accept its cards.
In addition to Slaughters, Amex has relationships with CMS Cameron Mc-Kenna, which advises on insurance matters and antitrust work. It outsources mainstream employment work to West End firm Glovers. Outside the UK, Amex has between two and three firms in each of the jurisdictions in which it operates. In Germany, for instance, the company outsources regulatory work to Hengeller Mueller and instructs Schulte Rechtsanwalte to advise on day-to-day corporate and commercial matters.
As for the law firm rationalisation, before Chambers joined Amex the company had relationships with a plethora of firms and Chambers was tasked with reducing Amex’s relationship with external lawyers. “There’s a long list of firms that we’ve historically used around the world,” he says, refusing to name names.
“We’ve now narrowed the range we have relationships with. But that’s not to say we’ve closed the door on those firms – we’ve just focused on the firms we had proper, meaningful relationships with.”
Chambers’ philosophy is to handle most legal work in-house. He achieves this by having an experienced team of senior lawyers in the department. Illustrating this, Chambers reveals that he has already handed out 25 and 15-year service awards to two lawyers at Amex. The lion’s share of the work, he says, is undertaken internally.
“With a small team, where you’re concentrating on trying to add value on the most significant projects, it’s inevitable that you’ll have a high proportion of senior lawyers in your team,” says Chambers. “You need senior people who won’t get distracted by the person who shouts the loudest and will actually find out what needs to get done.”
With such a hectic workload it is surprising that Chambers has time to fit in much else. However, last summer he organised a work experience programme in conjunction with Business in the Community and Fullemploy, a UK voluntary sector organisation which aims to combat problems of unemployment and the associated disadvantages faced by ethnic minorities.
As part of the scheme, two ethnic minority final year law students from the University of Westminster gained first-hand experience of a solicitor’s responsibilities by spending time with Chambers’ team at Amex. “For us the experiment was an enormous success, and one we’re keen to repeat as soon as possible. The team’s taken time to learn from the students to try to make next year’s scheme even better,” says Chambers.
“In addition, we’ll be encouraging greater participation from our relationship law firms,” he continues. “Shook Hardy [& Bacon] has been a very active driver and supporter of this initiative, and Nabarro Nathanson and others were keen participants. It had great support in-house, but more firms need to show the vision and flexibility necessary to embrace programmes like this.” Chambers will be encouraging greater participation from his relationship firms for next year’s programme.
Managing counsel for Europe, the Middle East and Africa (EMEA)
American Express Services Europe
|Organisation||American Express Services Europe|
|Sector||Financial services and travel|
|Employees||Approximately 86,000 worldwide|
|Legal capability||12 lawyers and five support staff|
|Managing counsel for Europe, the Middle East and Africa (EMEA)||Mark Chambers|
|Reporting to||New York-based managing counsel Nick Kourides|
|Main law firms||CMS Cameron McKenna, Glovers and Slaughter and May|