Tyco followed up its groundbreaking £10m agreement with Eversheds by recruiting a team of senior in-house lawyers to bolster the Europe, Middle East and Africa (Emea) team that has been revolutionised by general counsel Trevor Faure.
Since joining from Dell in the autumn of 2004, Faure has restructured the legal team of some 50 lawyers and is now putting the finishing touches on its senior management team, with a number of hires from some of the region’s most high-profile companies.
At the beginning of March 2007, Faure and his deputy general counsel and chief compliance officer Enrique Aznar will be reunited with French lawyer Paul Dan, who Faure describes as “the most senior IT lawyer in France”. All three worked together at Dell.
Three other senior counsel rejuvenated Tyco’s team in October 2006: Czech Hana Ferklova joined from Vodafone with responsibility for Eastern Europe; Maria Hernandez, who joined from Nortel, where she was senior counsel for Southern Europe, has control of the regional team for Southern Europe and the Middle East; and Gerd Hagena joined from TRW Automotive, with responsibility for Austria, Germany and Switzerland.
“I’ve done this at Apple and Dell,” says Faure. “This is my third time around, developing a legal department. In addition to industry models and the six-sigma method, we do have experience. The companies couldn’t be more different, but you learn something about developing legal departments for multibillion-dollar companies.”
The company is still looking for senior hires to head its Benelux, Nordic and South African legal teams.
The revolution is all part of a model that Faure calls “Smarter”, which stands for segment and subject management, regional teams and external resources.
The department will be managed by the new team of lawyers, each of whom will have responsibility for a specific business segment in the region. They will have regional lawyers who report to them and who provide local law expertise, with external assistance from Eversheds.
Eversheds will provide services equivalent to at least one full-time lawyer in the UK, France, Germany, Italy, the Middle East, Poland, Benelux and South Africa.
In the 27 jurisdictions where Eversheds does not have a presence, the firm has hooked up with its best friends, all of which have signed the Tyco contract. These jurisdictions include such far-flung places as Algeria, Iran, Iraq, Libya, the Netherlands, Romania and South Africa, where the firm has a long-established relationship with local firm Routledge Modise Moss Morris.
This sort of agreement would not suit all firms, as Eversheds is embarking upon a major commitment. The firm’s Tyco relationship partner Paul Smith explains: “Eversheds has invested a huge amount of time and money into investing in this and the technology which will enable this to happen.”
The contract with Eversheds is expected to add up to around £10m over a two-year period. There are flat-fee, discounted per hour, per project and risk-sharing elements.
“There’s an element of commoditisation – for example, we have software that automates some contracts. That investment in project management products has given us an advantage,” says Smith.
Those project management products include ‘Rapid’, an early-stage case assessment programme for litigation, and ‘Dealtrack’, a similar tool that is used for corporate work.
Eversheds has used similar tools during its longstanding relationship with other clients, such as DuPont, for which Smith is also the relationship partner. The Tyco agreement is similar to the DuPont Legal Model, but both Faure and Smith claim that this contract takes it to a new level.
Faure says: “We’ve had the privilege of being able to look at all existing industry practices. To the extent that any existing model has been useful, we’ve been able to use it. In-housers and law firms have said they’ve never seen anything of this complexity and scale.”
Smith agrees. “The DuPont Model was the genesis of the convergence and partnering models with law firms,” he says. “They reduced their panel from 340 law firms to 30. Tyco has reduced it to one, which is obviously more radical… The use of one firm will make it easier to monitor compliance. The DuPont Model was developed 10 years ago and the key issue facing general counsel now is compliance.”
The key factors in choosing Eversheds were increased coverage, increased quality, increased control and reduced costs.
“We set about setting a world-class standard in terms of those four factors and therefore increasing shareholder value and boosting corporate governance,” says Faure. “A legal service should be the shield and the sword of the business. It should be the shield, defending shareholder value, and it should be the sword, aggressively cutting deals at the sharp end of the business.”