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17 December 2012
Lawrence Guedes is so buoyant when we talk that you would think he wants to be described as 'buoyant' in this article. There are few other words to describe his energy, although one could also include 'upbeat' or 'bubbly'. It happens to be a few days after Logica has received a drubbing in the financial press after the FTSE 100 considered shuffling it out, but it was saved by a few hastily turned-around transactions that lifted its share value.
Judging by the press coverage of recent years, it would seem that Guedes' five and a half years at Logica have been somewhat turbulent, with its share price going up and down like crazy. Its recently reported share value is on par with its summer 1999 level, when technology stocks and the internet boom were just starting. However, as Guedes points out, Logica is under the same pressures as its commercial rivals in the current e-commerce and IT depression.
However, the company appears to be riding high in some areas, in particular in mobile phone text messaging, which keeps Guedes' hands full.
The really interesting side of Guedes' work over the last half-decade is seeing him cope with Logica's considerable expansion on top of a flurry of transactional work. The size of the in-house legal department capacity has remained at four lawyers in Guedes' time at the company, it used to be larger, but was scaled down by Martin Read, a former chief executive officer who joined Logica in 1993. But since 1997, Logica has purchased, among others, Irish mobile phone services firm Aldiscon, Dutch telecommunications group DDV-Group and US telecommunications software company Aethos.
This means Guedes' team members have to be jacks-of-all-trades, able to learn sufficiently quickly to be able to cope with work that they currently outsource. It is also worth remembering that Logica, for all the criticism it has received, has a presence in an impressive 34 countries and that its wide-ranging interests include mobile phone text messaging and payments, global solutions, IT consultancy and system integration.
To illustrate his team's flexibility, Guedes gives the example of doing a Dutch contract inquiry. "We have experience of this jurisdiction," says Guedes. "We take a common law approach even though Holland isn't a common law system and we seek advice on Dutch law in terms of limit of liabilities and standard of warranties. Getting external experience is something we only need to do once or twice, then we've accumulated the knowledge required. There are also local commercial managers who can assist."
Such managers, who are placed throughout the company, are able to deal with basic legal functions such as contract drafting and deal bidding. They enable Logica to keep its number of lawyers low.
The Dutch example is pertinent. Some 40 per cent of Guedes' workload is not UK-related, so the four lawyers have to be able to effectively navigate local laws and systems in many jurisdictions. The emphasis is on Guedes' lawyers not shirking the chance to do the work themselves. "The legal team is very efficient in that we're good at covering all the basics and rarely do we need external expertise," says Guedes.
Logica recently acted for the Reserve Bank of India on an £11m deal in which Logica provided the bank with the capacity to carry out realtime balances and transactions for regional banks. Guedes emphasised that the work was a collaborative project with local Indian lawyers. Another example is Guedes' and his junior team member Nick Wells's involvement in a large-scale competitive tender and ongoing legal support for Logica's 10-year IT contract for the Crown Prosecution Service.
Despite the philosophy of maximising the amount of work done in-house, Guedes' team obviously does not have the capacity to do everything. M&A work goes mostly the way of Freshfields Bruckhaus Deringer, but when that firm is conflicted out it tends to go to Linklaters. "We start with Freshfields and work up or down. When we do M&A work with a US emphasis it's not sensible to use Freshfields, so on this occasion we tend to use Goodwin Proctor in Boston a lot, but we do look around," explains Guedes.
The team receives a lot of litigation work, of which a fair proportion is outsourced to Eversheds and Wragge & Co, although other firms do get involved depending on the location of the work. Transactional work is carried out in the main by Eversheds, Pinsent Curtis Biddle, Tarlo Lyons and Wragges. Guedes laughs when questioned about foreign firms. "Some are good and some are bad," he says.
But despite the array of firms, they are used as the exception rather than the rule and are almost always called in for their volume-handling capability. Guedes adds: "It's not so much expertise, but more the fact that a single M&A deal will swamp the whole department. We're very knowledgeable." Guedes' two senior lawyers are 7 and 10 years qualified and the junior two years.
Guedes, who took over the role a year ago from David Walker, who had five lawyers abroad on top of the four in London, is unfazed by recent speculation that Logica faced being thrown out of the FTSE 100. "The FTSE was reassessing and there were rumours that we'd be outside it rather than in," he says. "We're the sort of company where we're always under a tight schedule, which is obviously a concern, but no more so than other businesses [in our sector]."
He also brushes off claims that Logica is on the verge of being taken over, arguing that such rumours are omnipresent but have never come to anything. Similarly, concerning drops in Logica's share price, he says: "We're the same company in terms of performance that we were six months ago."
Guedes says he frequently becomes involved in the sort of strategic deals that take place to fend off the threats of Logica being thrown out of the FTSE 100. He points out that in-house lawyers are used to having to advise on non-legal issues such as strategy. "We're frequently updated on the business side of the firm. The managers are very good at managing the process and provide numerous educational guides for our lawyers. We meet formally with executives on a quarterly basis and informally almost every day," he says.
The multifarious roles for Guedes' team makes for interesting lawyering. There are no immediate thoughts about expanding the department, which in 2000 totalled nine lawyers and had about 300 fewer staff than at present. However, with the press awash with Logica deals, perhaps now is the time for expansion.
Group legal adviser
|Sector||IT, system integration, mobile phones|
|Group legal adviser||Lawrence Guedes|
|Reporting to||Chief financial officer Andrew Gibbon|
|Main location for lawyers||Euston, London|
|Main law firms||Eversheds, Freshfields Bruckhaus Deringer, Linklaters, Tarlo Lyons and Wragge & Co|