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29 January 2014
Since its humble beginnings 151 years ago, newswire and financial information provider Reuters has come a long way.
Set up by news correspondent Paul Julius Reuter, its original communication network was based on carrier pigeons. Reuter used the feathered messengers to bridge the telegraph gap between Aachen in Germany and London so that he was able to scoop his competitors.
Two years later, Reuter moved to London and began telegraphing market information between London and Paris.
Reuters now covers a range of information services and markets, from medical news to software innovations, but its main emphasis is on providing market-related updates.
The structure of its in-house legal department reflects the global reach of its news service. Deputy general counsel Andrew Garard says: "Lawyers are based in New York, London [the corporate HQ], Bombay, Tokyo, Hong Kong, Sydney, Palo Alto, Geneva and Singapore, which makes us look more like a law firm. They all have a number of specialities, such as employment or M&A."
Earlier this year, Garard decided to bring in an in-house employment expert for the first time (The Lawyer, 31 July). Jo-Ann Semple will join from DJ Freeman next week (2 October).
At the time of the announcement, Garard said that increasing amounts of European legislation and the forthcoming Human Rights Act mean that employment law now requires the presence of an in-house expert.
"We only have [lawyers] that can add value to the business," he says. "Within the world of European legislation we needed to have someone on the ground here, and in value terms, that's a plus."
By contrast, there are no property specialists within the 70-strong global team, as the company does not view them as adding value to the in-house department, which includes specialists in intellectual property (IP), M&A, competition, litigation, IT and technology.
While the in-house department is obviously well staffed, Reuters does not attempt to keep all of its legal work internal.
"We work very much hand in glove with external counsel. We are of the philosophy that a relationship is a two-way affair - if we get good service we will be loyal," Garard explains.
"There is a lot of work generating from Reuters, from contracts through to complex acquisitions. On M&A we must have lawyers who understand the corporate structure, and it's just not economical to do it all in-house."
His loyalties are based on personal relationships. In London these cover a variety of firms, although Clifford Chance and Freshfields Bruckhaus Deringer cream off the majority of the big deals, the former with competition and IP work, while Freshfields concentrates on corporate and European-based instructions.
Reuters' London panel was established in 1993. Its members are: Allen & Overy and Ashurst Morris Crisp (property and litigation); Linklaters (litigation); Lovells, Rowe & Maw and Slaughter and May (corporate); and Shaw Pittman (IP).
Garard says: "We don't go for brand names, these are evolved relationships. We have regular review meetings with our relationship partners to make sure things are ticking along on both sides. But it is quite rare for someone to be dropped, because loyalty is a big thing."
In New York, Reuters uses all of the big Wall Street firms: Wachtell Lipton Rosen & Katz; Davis Polk & Wardwell; Weil Gotshal & Manges; Sullivan & Cromwell; Cravath Swaine & Moore; and Simpson Thacher & Bartlett, along with some smaller M&A specialists in New York.
For European work, Garard uses the local offices of multinational firms Freshfields and Clifford Chance. The company has a very strong relationship with Freshfields in Asia. "We will use Freshfields where they can practise local law, and where they can't we'll use one of the local firms," says Garard. The company finds fill-in firms by asking advice from banks and other institutions acting in the markets.
But in his dealings with the firms, Garard prefers to build up a relationship with individual lawyers. "[If a relationship partner left] then we would look again," he says. "This may become an increasing problem, although to date it has not been a problem for us."
Most of the recruits for the in-house team come from private practice and have been recruited since 1993, when Simon Yencken took over as general counsel.
"There was pretty much a clean sheet in 1993 when Simon took over as general counsel, and there was a concerted effort to recruit talent. Now the department is much more mature and we look at where the gaps are as the needs of the business develop," says Garard.
He explains that the team rarely takes on former partners from private practice for fear of creating a bottleneck within the department. He is aware of the need to create a career path for young lawyers coming in and is wary of blocking the ladder by recruiting senior specialists.
But, for the time being, the department looks set to grow alongside Reuters' expansion.
Garard says: "We have a budget for external advisers, but that depends on what's going on with the business. It is dependent on any ongoing litigation, recent M&A and so on.
"The [in-house team] will increase as long as the business continues to prosper, and there's no reason why it shouldn't. One obviously reaches the level where you have to look at economics. We're not doing our jobs if all we're doing is sitting around recruiting lawyers."
Deputy general counsel
|Sector||Publishing and printing|
|FTSE 100 ranking||17|
|Legal capability||21 in London, 70 worldwide|
|Heads of legal||Deputy general counsel Andrew Garard and general counsel Steven Mitchell|
|Reporting to||Chief executive Peter Job|
|Main location for lawyers||London, New York and Germany|
|Main law firms||Allen & Overy, Ashurst Morris Crisp, Clifford Chance, Freshfields, Linklaters & Alliance, Lovells, Rowe & Maw, Shaw Pittman and Slaughter and May|