As head of dispute resolution at BAE Systems, Joanna Talbot is faced with finding strategic ways to manage disputes at a company that comes under close scrutiny from the authorities. By Andrew Pugh
When Joanna Talbot took up her post at BAE Systems in 2008, she faced the novel challenge of having to decide exactly what her job was.
Talbot joined the defence giant following a major shake-up of its in-house legal team by group general counsel Philip Bramwell. He was appointed in January 2007 after a Serious Fraud Office investigation, which was later dropped, into allegations of bribery relating to the company’s activities in Saudi Arabia.
Bramwell soon set about introducing a three-year plan to reorganise the Farnborough-headquartered company’s legal team. A key part of the restructuring was to assign a senior lawyer to each part of the business, including M&A, capital markets, employment and property.
BAE, the world’s second biggest defence company behind Lockheed Martin, with a turnover of £22.4bn, earlier this year agreed to pay a $400m (£255.5m) fine in the US and plead guilty to a charge of conspiracy to make false statements to the government, following an investigation into alleged corruption in arms deals. In the UK it was fined £30m after pleading guilty to failing to keep reasonably accurate accounting records.
The fallout from the investigations, along with the potential impact of the upcoming Bribery Act, do not come under Talbot’s remit, and are instead handled by Bramwell and compliance and regulation chief Mark Serfozo.
But the negative publicity means Talbot is understandably reluctant to discuss any details of cases with which she is currently involved.
“This was a new role when I joined, so the first 100 days or so was about planning what exactly the job should involve,” says Talbot. “I found that what we didn’t need was a huge team of in-house litigators – it’s more about finding a way to work with the other legal heads and make sure we share information.”
At the start of her tenure, Talbot’s official title was head of litigation. But after reviewing what the role entailed, she decided to change that to head of dispute resolution.
“Litigation was really only one aspect of the role,” she explains. “There are other ways of resolving disputes. My remit is really about how we strategically manage disputes and resources properly, though it can be difficult to be systematic because resolution is done on a case-by-case by basis.”
She adds: “It’s about examining the disputes we have and looking for central themes such as what gives rise to the disputes in the first place, and what you can do to mitigate risk in the future.”
Last year the company’s UK operation carried out a review of its preferred list of external advisers, settling on 16 firms including Allen & Overy, Eversheds, Freshfields Bruckhaus Deringer, Pinsent Masons and Slaughter and May.
Talbot has also introduced an initiative that has seen the legal team increasingly advising the bar directly, cutting out the ’middle man’ of external firms.
“The bar has a tremendous amount to add and I often encourage people to call a barrister early on in a case,” she says. “They can make a call on what they think about your position, based on the strengths and weaknesses of your case. I’ve had situations where I’ve instructed a junior counsel, then a barrister and then a solicitor.”
The trend began after the company held an ’Understanding BAE’ event. Alongside law firms, three sets were also present: Matrix Chambers, Atkin Chambers and Henderson Chambers. Talbot now regularly instructs barristers at all three chambers.
“Some people think you have to type up letters on vellum before you go to a barrister, but that really isn’t the case,” adds Talbot. “It’s also very economical.”
Talbot joined BAE from Clyde & Co, where she focused on commercial litigation and insurance law.
“It’s a very different role when you move in-house,” she says. “There are a lot more factors to take into account and a much larger variety of disputes. One thing I love about this job is working for a company that actually makes things. Private practice can be quite an esoteric world, but here you can put on your hard hat and visit different parts of the business. You get to see things like a nuclear submarine being made.”
She adds: “I was speaking with a witness in a case in Farnborough recently and they kept looking out of the window, which was a little annoying. Then I realised they were staring at a Vulcan bomber going past. There aren’t many jobs where that happens.”
Name: Joanna Talbot
Company: BAE Systems
Position: Head of dispute resolution
Industry: Defence, security and aerospace
Annual turnover: £22.4bn
Total number of employees: 107,000
Total legal capacity: 160