Carphone Warehouse has its sights set on toppling BT and breaking into the FTSE100. Donna Sawyer talks to counsel Tim Morris about his team’s role in the expansion drive
Carphone Warehouse group corporate counsel Tim Morris is not afraid to go it alone when he is in the driving seat. The trailblazing lawyer has built the company’s in-house legal team from scratch and considers ’outsourcing’ a dirty word. His next major challenge is to drive the rapidly expanding business into the FTSE100, but Morris is unlikely to stop there.
Ten years ago, Carphone Warehouse was a successful phone retailer preparing to open its first stores outside the UK in Paris and Dublin. These days, it is a fully fledged telecoms business complete with a solid footing in the UK and European fixed-line industry, with more than 1,500 stores across 10 European countries.
From humble beginnings, Carphone Warehouse has been on an acquisition rampage during the past six years, purchasing the UK Tandy business in 1999, Spanish mobile phone retailer ACJM in 2000, French telecoms services business CMC in 2001, UK network operator Opal Telecom in 2002 and German service provider Hutchison Telecommunications in 2003.
In February 2003 the company launched its residential fixed-line service Talktalk as a direct rival to BT. In the same year it also reached an agreement with Sainsbury’s to provide mobile and fixed-line services to the supermarket’s customers.
The transformation from retailer to telecoms giant can be attributed, at least in part, to Morris and his relatively small legal team.
“The growth of the business has been phenomenal,” Morris says. “We’ve gone from being a retailer to a telecoms business. It makes for a very busy legal department.
“Ideally, we want the business to grow so that it’s the number one competitor to BT.”
Morris measures his achievements by the success of Carphone Warehouse, and harbours ambitions of eventually taking an active involvement in decisions that affect the direction of the business.
“My desire to be involved with the running of the business has always been a strong one,” he admits.
More immediately, the next goal on Morris’s hitlist is to secure the company’s position on the FTSE100 list.
“We currently sit just outside the top 100, so it’s definitely within our reach,” Morris says.
In addition to the UK, Morris also has his sights set on Europe. Most recently Morris worked on forming a joint venture between Carphone Warehouse and Virgin in France.
“It’s a significant transaction,” Morris enthuses. “We’ve always had a good relationship with Virgin, but never anything like this. It’s a 50-50 joint venture.”
Since Morris’s arrival at Carphone Warehouse, he has taken the in-house legal function from one extreme to the other. Carphone Warehouse used to outsource 99 per cent of its legal work but now outsources just 1 per cent.
“We’ve brought most of the legal work in-house,” Morris says. “A lot of the work is corporate and it was work that I knew we could do in-house.”
Morris joined Carphone Warehouse from DLA Piper Rudnick Gray Cary, where he practised as a corporate partner.
Carphone Warehouse now has 10 in-house lawyers in the UK and five internationally. During the past two years the company has added to its in-house legal team, snaring United Utilities lawyer Rikard Granberg and telecoms company Level 2 lawyer Mark Courtney. The legal department has a flat structure, providing each lawyer with a variety of work.
“It’s like a cab rank in a way,” Morris explains. “On any given day we might be working on anything from an acquisition to a commercial agreement. That way it keeps everyone interested and it’s a good way of keeping high-quality lawyers.”
Morris doesn’t deal with law firms so much as he deals with people. He has maintained close working relationships with Ashurst corporate partner Stephen Fox and Olswang corporate head Adrian Bott since they were drafted in to advise on Carphone Warehouse’s flotation on the London Stock Exchange in 2000.
He also uses David Wyatt of Clyde & Co for property work. Indeed, it is the only work that is outsourced on a regular basis, as the in-house team does not have a real estate law capability.
Morris also rates DLA Piper corporate partner James Kerrigan.
“I think any lawyer that has a commercially friendly approach to their work is a good lawyer,” he says.
While some of its competitors have been forced to slow down, Carphone Warehouse has been in the fast lane to rapid expansion.
Morris has a big task ahead of him if the company is going to achieve its goals of becoming BT’s key rival and entering the FTSE100 list. After that, the sky is the limit for Carphone Warehouse.
“The future is the finish line,” Morris concludes. n
Group general counsel
|Legal capability||UK – 10 lawyers; international – five lawyers|
|Group general counsel||Tim Morris|
|Reporting to||Chairman John Gildersleeve|
|Main advisers||Brick Court Chambers, Clyde & Co, DLA Piper Rudnick Gray Cary, Olswang, Osborne Clarke|