Reed Elsevier

1999 is a year Reed Elsevier must be wishing would end quickly. So far a fruitless 10-month search for a chief executive has only served to amplify huge rifts in the management board, culminating in the resignation of two directors.

Speculation has also flared over the possibility that Reed Elsevier could be back in talks with Dutch rival Wolters Kluwer after a £5.5bn buy-out proposition fell through last year.

However, all the boardroom shenanigans have left the legal department untouched. In fact, the department went through its own metamorphosis in 1992 when the then 8-strong legal team was disbanded.

UK legal director Anne Joseph, who was brought on board as part of this change, says: “It was before my time, but I believe it was due to cost. When they disbanded, they cut too much, so a couple of the subsidiaries had to recruit their own lawyers. The previous lawyers were, for all intents and purposes, like a private practice within Reed.”

The department would also provide advice to the US which then much smaller. The honed down set-up is now very different. The current legal running order has two lawyers in France, three in the UK and four in Holland.

The US, however, towers over the other regions with 16 lawyers, eight of them stationed in Dayton, Ohio, to handle Reed’s on-line service Lexis Nexus, which it bought in 1994 for $1.5bn.

Although the publishing giant’s overall management set-up is a unitary structure, the legal department is split into three main jurisdictions – the UK, Holland and the US.

Joseph says: “Although unusual, we have found that the system works extremely well for our business. The legal directors work as part of a team and policy is determined jointly.”

Joseph also adds that each of the three legal directors have an impressive history of M&A work.

Which is just as well since Reed has been involved in 60 transactions over the past four years. Joseph says: “This work is virtually all done through external advisors.We project manage it and instruct them.”

She explains that external legal advisors are appointed on a “horses for courses basis”.

But Joseph adds: “The smaller titles and smaller exhibitions we do ourselves, but because we are thin on the ground we have limited resources.”

Therefore Freshfields and Linklaters tend to handle the company’s corporate work. But much of the legal department’s work is consumed by contractual issues, with Joseph’s main areas of expertise intellectual property, competition and data protection issues.

Competition is particularly important to the legal department. In 1998 when the company sold IPC Magazines to Cinven for £860m, Reed was also involved in a major merger clearance filing at the Directorate General for competition (DGIV) investigation. This was due to competition queries arising from the potential purchase of Wolters Kluwer.

Joseph admits: “This was an interesting time. The complex second-stage merger clearance process through the European Commission was not one we had been through before.”

She adds: “We had to produce, at very short notice, voluminous statistical information, much of which is not routinely kept in the industry.”

Surprisingly, one area the department does not handle is property. Joseph says this is looked after by a separate division which appoints its own external advisors, including Manches.

Joseph concedes that the UK legal department is very small, but is adamant that it will not be expanding back to the level it was before her arrival.
Anne Joseph
Head of legal
Reed Elsevier

Statistics
Organisation Reed Elsevier
Sector Media
FTSE 100 ranking 58
Market capitalisation £5.6bn
Employees 26,500
Legal function 5 UK, 25 international
Head of legal Anne Joseph
Reporting to Nigel Stapleton, co-chief executive officer
Main location for lawyers London
Main law firms Freshfields/Linklaters (corporate and competition), DJ Freeman (commercial contracts and litigation) Fox Williams (employment and IT) Manches (employment, property and IT)