Safety first for Barclays' quest
11 February 2013 | By Joshua Freedman
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The quest to find a new general counsel (GC) at Lloyds Banking Group sums up pretty well the challenge Barclays has in the coming months. Lloyds is understood to have scoured City law firms for potential replacements for retiring Harry Baines last year, only to find there were no suitable candidates. Instead, it plumped for an in-house lawyer at a regulator, FSA GC Andrew Whittaker.
Barclays’ announcement last week that Mark Harding was standing down as group GC after 10 years has landed another big bank’s recruitment team with a major task, with the process already under way. The lender said it would “take a considerable time to complete”.
No doubt Barclays and its headhunters will look to private practice among other sources for potential recruits, but the strong indication is that an internal promotion is more likely.
The first obstacle to a recruit from a law firm is money.
The calibre of candidates on Barclays’ radar will mean most under contention will be plateau partners at magic circle firms, where top of equity is between £1.3m and £1.6m. Exactly how much Barclays pays Harding in total is unclear but a shareholder filing from March 2012 shows he received £1.14m in shares that year.
Pay aside, the lender is unlikely to go fishing in the hearts of top firms’ banking departments, for the simple reason that it has minimal interest in taking on leading deal lawyers who have no management experience or the personal clout to deal with the politically tricky role.
Neither do very many of the obvious City banking partners have much experience in new Barclays CEO Antony Jenkins’ specialist subject, retail banking. Jenkins, the bank’s former retail chief, replaced Bob Diamond last summer and could choose another retail expert as in-house counsel - a trail that leads to current deputy GC Michael Shaw, who had a spell as interim general counsel of the retail banking arm.
Barclays is widely expected to go for a safe option and promote an in-house lawyer, given the pressure the bank has been under following the Libor scandal. Shaw, a former Herbert Smith partner, is a leading candidate alongside Judith Shepherd, global GC for corporate and investment banking. Shepherd was previously a partner at Stephenson Harwood and later Gibson Dunn & Crutcher.
Some sources have pointed to former Ashurst partner Erica Handling, GC at Barclays Capital, the lender’s investment bank. But Handling’s expertise in private practice was in structured products, not necessarily the most important focus for a general counsel. Plus the bank is more likely to choose someone with Plc experience.
“Barclays would go for as vanilla or non-controversial a candidate as possible,” says a City corporate partner.
This leaves Shaw and Shepherd as the standout candidates, but if Barclays does go to private practice for its new GC, it probably need not look much further than Clifford Chance, Harding’s old stomping ground.
Clifford Chance has the reputation of being a firm of highly mature banking partners, with finance experts right through the ranks up to senior partner Malcolm Sweeting. Indeed, Sweeting is seen as an outsider, as is one of the previous generation of top Canary Wharf figures, former senior partner Stuart Popham QC, now vice-chairman of Emea banking at Citigroup.
Others there tipped to be candidates are banking head Mark Campbell and banking partner Alan Inglis, with Campbell probably more likely. Sweeting’s term as senior partner ends at the close of 2014, so he might be reluctant to leave.
As far as younger Clifford Chance partners are concerned, Dubai-based Guy Norman is the firm’s top corporate contact, but he is a more deal-doer than grey-haired figure.
At Freshfields Bruckhaus Deringer, relationship partner Simon Hall is perceived to be an outsider but confirmed that he was “not interested in running”.
The core of Linklaters’ banking practice is made up of young and enthusiastic dealmakers; of the more senior figures, David Ereira is tied up with the Lehman Brothers case (he declined to comment) and Robert Elliott’s senior partner term runs until 2016.
Allen & Overy senior partner David Morley and banking co-head Stephen Kensell are slight possibilties, as is banking partner George Link, who has advised Barclays previously.
Barclays is unlikely to take someone from another in-house position, although this is not out of the question. Alternatively it could turn to a regulator. Indeed, Kate Cheetham, Lloyds’ GC for group legal, was widely tipped for the top position last year before the bank chose the FSA’s Whittaker.
With Barclays in its current position, a regulatory or even litigation expert is certainly a strong option. Whatever happens, the money is on a safe pair of hands.
Rated: the runners and riders
The strong candidates
Michael Shaw, deputy GC, Barclays
Judith Shepherd, global GC for corporate and investment banking, Barclays
Mark Campbell, head of banking, Clifford Chance
Erica Handling, GC, Barclays Capital
Stuart Popham, vice-chairman of EMEA banking, Citigroup
Malcolm Sweeting, senior partner, Clifford Chance
Guy Norman, corporate partner, Clifford Chance
Robert Elliott, senior partner, Linklaters
David Ereira, banking partner, Linklaters
David Morley, senior partner, Allen & Overy
George Link, banking partner, Allen & Overy
Stephen Kensell, co-head of banking, Allen & Overy
Jonathan Peddie, managing director, litigation and investigations, Barclays
David Greenwald, deputy GC and international GC, Goldman Sachs
William Elliott, GC, Goldman Sachs
Simon Dodds, global head of compliance, Deutsche Bank
Alan Inglis, banking partner, Clifford Chance
Rushad Abadan, GC for corporate and M&A, RBS
John Collins, deputy GC, RBS