The recipe for in-house legal success?

The retirement of BP’s legal chief Peter Bevan highlights a generational shift taking place behind coveted corporate legal budgets.

Careers are finite and everyone has a last day.

The imminent retirement of BP’s long-serving legal chief Peter Bevan, and his shock replacement with GlaxoSmithKline general counsel Rupert Bondy, highlights a slow but sure generational shift taking place behind some of the world’s most coveted corporate legal budgets.

It also highlights a trend of big companies now preferring to hire externally to replace a retiring general counsel rather than promoting internally.

Last year saw the retirement of Michael Lester at BAE Systems, Geoffrey Johnson at Lloyds TSB and Jan Eijsbouts at Akzo Nobel.

Like Bevan at BP, they were replaced by newcomers. Philip Bramwell from O2 replaced Lester at BAE, Lloyds TSB appointed Norton Rose partner Margaret Coltman and Jan Karel van der Staay, general counsel at Dutch energy company NUON, stepped in for Eijsbouts at Akzo.

While lawyers in those companies adapt to their new legal chiefs, some will begin to wonder about their own futures. As one source puts it: “The role of general counsel should include succession planning.”

Nestlé’s respected group general counsel Hans Peter Frick is 62 this year and has held the top job for more than 15 years. Rio Tinto’s highly esteemed Charles Lawton is entering his 38th year as a qualified lawyer and nearing completion on an overhaul of the company’s legal structure.

Elsewhere, Royal Dutch Shell group general counsel Beat Hess, who did so much to modernise the legal department after the reserves reporting scandal in 2004, will turn 60 next year.

So assuming then that Shell, Nestlé and Rio Tinto will make big hires in the next few years, who are the leading candidates?

With his energy and projects background, perhaps Graham Vinter at BG Group would make a good fit at Shell or Rio Tinto.

Mark Elborne could also be a contender for one of the two, accustomed as he is to handling a big in-house team and armies of external lawyers as General Electric’s European general counsel.

Meanwhile, Nestlé would be hard-pressed to overlook its highly rated European chief Trevor Brown, but could pick out someone like Bernd Dreymueller, chief European counsel at Kraft Foods.

External hires often bring in new ideas, and there seems to be a growing desire on the part of board members and CEOs to bring in fresh pairs of eyes to look at the legal function and to make changes.

Drinks company InBev’s general counsel Deepak Malhotra points out: “Any general counsel will want to impose their own footprint to a certain extent.”

Certainly Bramwell has made an impact since his arrival, putting in place a three-year scheme to revolutionise BAE’s legal function and increase the number of lawyers by 20 per cent.

Meanwhile, Lloyds TSB has killed two birds with one stone, merging the general counsel and company secretary roles following the arrival of Coltman to replace legal chief Johnson and company secretary Alastair Michie.

Despite the benefits of bringing new talent to the business, an external hire could be a dangerous move for a company that wants to keep the talent it already has in the legal team.

Malhotra says: “It could be an issue. First and foremost it’s a question of the talent pool within the company.

“The board might look for a fresh perspective externally, but my question is, ‘Why do that if there’s a number two who’s extremely good?’ You’d probably lose them. Would a fresh pair of eyes outweigh that?”

He adds: “The new general counsel could be a superstar with one organisation but not with another. The other important thing is cultural fit, not just track record.”

It may be fun to look into the crystal ball once in a while, but one thing is certain: those companies that do hire will have to tread carefully not to upset their own senior legal figures.