31 July 2000
A full three months after BMW sold off its Rover car division to the Phoenix consortium for a nominal fee of £10, Midlands-based Rover is just beginning to draw breath.
As a result of one the most high profile deals of the year, the newly formed Rover Group has finally put in place its new management board, led by Kevin Howe, the former managing director of fan engine systems at Rolls Royce Aerospace.
The structural realignment of the company has been mirrored by a major restructuring of the legal departments of Rover Group and BMW.
BMW has retained two lawyers from the original department at Rover, including head of legal Andrew Armitage, who is housed at BMW Services, a UK subsidiary of its German parent (The Lawyer, 24 July).
The newly formed Rover Group has been left with just three in-house lawyers to manage an escalating workload.
Jane Ruston, company secretary and legal director at Rover Group, says: "The way the work is going, it's looking like we may have to consider our resource level."
At the moment Ruston's department keeps as much work as it can in-house, including employment work for the group's 6,000 staff.
But she says: "We may struggle to do that in the future now that we are down from five to three."
While it may be expected that Rover will add more lawyers to its department, Ruston says expansion is not inevitable - the company may simply consider outsourcing more work in the future.
In preparation for the heightened reliance on external advisers, Ruston says the legal department is planning to undertake an overall review of its panel of firms.
She says: "There is no reason not to continue with the same firms, but now that we are a smaller company we are looking at our panel of lawyers and asking whether they are offering us the right service."
Ruston says the experience, knowledge and resources offered by Eversheds were key to making the change from Wragges, which the company has used for more than 10 years.
"Eversheds was chosen because it was involved in the acquisition, as were myself and my colleagues, therefore it was in the best position to be able to advise us on the restructuring and the consequences.
"It has a good understanding of what happened in that time and how to implement the terms of the share sale agreement."
She adds: "The restructuring is so complex, with parts of the business being hived out and sold. It's taking up an enormous amount of time and I can see it taking up the biggest chunk of our time up to Christmas."
For example, the transfer of production of the Rover 75 from BMW's plant in Cowley to Long-bridge is creating more work for the legal team.
But in terms of coping with these changes, Ruston says: "That's where Eversheds has been great. It has the resources and the knowledge to take the burden off our department, to try to allow us to do what we should be doing, which is looking forward."
Other areas under review include intellectual property. Rover's trademark department was closed down in November 1999, when all the work went to BMW's own unit in Munich.
Trademark and patents work will now be managed by one of Ruston's deputies, Natalie Atkins, a five year qualified solicitor who joined the company from Freshfields three years ago.
Ruston says: "She's doing beauty parades at the moment to find agents and advisers. It's a very new area for us."
For other areas of advice, Ruston uses Norton Rose for competition work while Wragges is used for litigation and property.
Local firm Brindley Twist Tafft & James is used for customer service litigation and AJ Salisbury & Co is used for small value property work.
Ruston says she tries to outsource as much work as possible to lawyers in Birmingham.
She says: "Large firms in Birmingham have the resources we need. Unless we feel we can get something else or something better in London we don't go outside Birmingham.
"This is such an important industry in Birmingham, so many people have some interest in the car industry. They have some understanding of our business and what we are trying to achieve, it's such a major part of life here. It's in people's blood really."
But as the legal department works hard to implement the changes which inevitably follow such upheaval, it also has to cope with the everyday issues that affect the company.
Ruston is assessing the impact of a Competition Commission report which, in April, concluded that car prices in the UK were on average 10 per cent higher than in comparable continental markets.
Stephen Byers, the trade and industry secretary, is due to make recommendations based on the report.
Rover has already taken a step in the right direction by cutting prices across its product range in an attempt to boost sales. Commenting on the report, Ruston says: "We're looking very closely at how we're trying to implement that. It's going to affect us very profoundly."
Head of legal
|Legal function||Three lawyers|
|Head of legal||Jane Ruston|
|Reporting to||John Millet, finance and strategy diretor|
|Main law firms||AJ Salisbury & Co, Brindley Twist Tafft & James, Eversheds, Norton Rose and Wragge & Co|