Show me the savings: Ben Scott, HomeServe

There’s little doubt about the fashion among the in-house counsel who talked to The Lawyer in 2010 – getting maximum value for money remains the name of their game.


Orijit Das
Orijit Das

There may be strong indicators that the UK economy is recovering, but there are few signs of ­general counsel ­cooling their tough stance on costs.

The Lawyer profiled almost 50 leading in-house lawyers in 2010 and it was the pressure to cut costs that emerged as probably the biggest theme. Where the lawyers varied was in how toachieve that aim.

One solution has been to take a short-term hit by investing in internal legal teams to secure longer-term ­savings. That was the route taken by HomeServe legal director Ben Scott. Alarmed at the amount the company was spending on external lawyers when he arrived from Marks & Spencer, Scott recruited six lawyers in just one year. It allowed him to handle all legal matters in-house aside from major acquisitions and litigation.

Others looked to rejig their legal panels. This was how Joanna Day, head of commercial law at Santander UK, managed to slash legal spend by a massive 77 per cent in a year. Following the acquisition of Alliance & Leicester, Day merged the panels and cut the number of firms it works with to 16. She also increased the amount of work kept in-house. Not one commercial contract has been handled by outside counsel since 2005.

Stephanie Fuller, head of legal and compliance at MetLife, took a similar approach. She has managed to save around £1m in legal bills by ­streamlining the insurance giant’s panel and introducing fixed rates.

Instead of reviewing panel arrangements Aegis media general counsel Simon Zinger began using firms ­outside London and New York, such as DLA Piper’s Leeds office.

“I’d rather work with a big fish in a small pond than a big fish in an ocean,” he said. “Often at those firms you’ll be forgotten or passed on to a team of associates who don’t think about your best interests.”

As well as monitoring costs, in-house counsel continue to push for ’value-adds’. One of the most extreme examples isJonathan Peddie, director of global litigation and special ­investigations at Barclays’ global retail and banking division. He took the use of secondments to a new level when Simmons & Simmons partner Colin Passmore arrived at the bank.

Simon MacDonald, group legal affairs manager at MotorSport Vision Group, took a more novel approach to cutting fees, telling The Lawyer how he encouraged the use of contra deals, whereby he offered law firms access to corporate hospitality events via its PalmerSports activities in return for unbilled legal advice.

Alongside costs, another headache has been the increasing volume of regulation across almost all ­industries. As David Frolio, general counsel at mobile communication body the GSM Association, put it: “We live in a regulated world.”

Nowhere is this truer than in the financial services sector, although an interview with the head of legal at fund manager Man Group highlighted how this is not always a bad thing. Jasveer Singh told The Lawyer how the EU’s Alternative Investment Fund Managers Directive was an example of regulation that should be seen as an opportunity.

“Responsible and pragmatic ­regulation’s a good thing for the industry and will give us a competitive advantage,” he said. “It creates a barrier to entry for firms that haven’t made the appropriate investment.”

WorldSpreads general counsel Dominic Bacon was another who welcomed the influx of regulation in the sector, but for different reasons.

“Being a geek, I like the regulatory stuff because it’s so fast-moving,” he said. “The FSA says something new every day, so trying to keep up can be difficult. It’s fun but challenging.”

Not all agreed. Kirsty Cooper, ­general counsel at insurance giant Aviva, described how the company was being hit by a wave of ­regulation: the Walker review, the EU’s Solvency II initiative and the Bribery Act 2010 to name but a few.

General counsel were again keen to discuss the changing nature of their roles in recent years. But while many were keen to boast about their influence on senior management, a controversial study published by Nabarro in June found lawyers’involvement in strategic decisions remains limited. It found that only 3 per cent of in-house lawyers are involved at the highest echelons of decision-making.

The study did, however, acknowledge that the role of general counsel was evolving and stated that they are now expected to be more than just legal advisers.

This conclusion was shared by another in-house counsel profiled by The Lawyer, GenPact senior legal counsel Orijit Das.

“It’s no longer just about being a lawyer in a company,” he said. “In the past it was sometimes seen as a place where lawyers who couldn’t hack it at a private firm ended up, or where mothers went for a cushy life. That’s no longer the case and there’s been a huge shift in prestige.”