Helping with the evolution of Marsh & Mc-Lennan into one ;of ;the world’s largest insurance brokers has become an addiction for the company’s head of legal for Europe, the Middle East and Africa (Emea).
“One of the reasons I’ve stayed here for so long is because there’s always something on the horizon,” says Michele Pullan, now in her tenth year at the broker.
Pullan previously worked for the UK’s largest broker Sedgewick. When Sedgewick was acquired by Marsh in 1998 for £1.25bn she helped see through the merger.
Historically, Marsh had two legal streams working in parallel: litigation and corporate.
“I headed up the litigation team,” Pullan explains. “More recently both streams have come together. It has changed a lot. There’s a lot more cooperation between the two practices, which allows us to be much more flexible and cooperative in response to the company’s needs.”
Pullan reports to Marsh’s global general counsel Peter Beshar, via general counsel Jim McNasby. Beshar joined Marsh in 2004 and introduced a legal hierarchy aimed at reflecting the company’s international standing.
Each of the broker’s operating companies has its own general counsel. Pullan is responsible for overseeing all legal operations across Emea and keeping Beshar abreast of the issues.
“Over the past two or three years our general counsel has been keen on having a global legal department, although this produces organisational challenges,” says Pullan.
Beshar joined Marsh before its fallout with former New York attorney general Eliot Spitzer. In October 2004 Spitzer accused Marsh, American International Group and Ace of colluding to fix insurance prices and accepting contingent commissions, known in the UK as ‘overriders’.
Contingent commissions paid by insurers to brokers are typically contingent on the broker steering business towards the insurance company, rather than being contingent on a particular buyer’s behaviour. The investigation sent shockwaves around the insurance world.
In the UK Marsh called in Freshfields Bruckhaus Deringer to carry out a health check. “It found no evidence of any such activity here in the UK,” Pullan says.
Spitzer’s investigation has had wider implications for how the Financial Services Authority (FSA) regulates the broking sector. It is looking at whether commission arrangements between brokers and underwriters should be transparent so the buyer knows how much they are paying for the service.
“Creating a level playing field is a challenge,” Pullan admits, acknowledging the high-street brokers’ resistance to commission transparency.
FSA regulation of the insurance industry came into force in January 2005 and Marsh is leading the fight for greater transparency. The company has become an essential point of contact for the financial watchdog.
“The industry had never been regulated. The FSA was used to regulating banks and, as a broker, we don’t carry financial risks,” says Pullan. “The FSA has had a learning curve and so have we. Part of being regulated means you have to do things more efficiently. After what we’ve been through [the Spitzer investigation], we have a better relationship with the FSA.”
As well as regulation the legal team deals with issues including M&A, licensing for new jurisdictions, contract negotiations and disputes and internal business advice.
“We try to minimise legal spend,” says Pullan. “We have a very experienced department. Everybody in it has worked in a City firm. We’ll resource up on the big cases where we need to increase our intellectual capital.”
Marsh has three ‘preferred’ firms: Herbert Smith for litigation; Mayer Brown for employment; and Slaughter and May for corporate. “Although we will hold beauty parades for certain projects,” adds Pullan.
The legal team brings in trainees on a seconded basis and currently has one from Herbert Smith and another from Mayer Brown. The smaller Emea offices also have an in-house lawyer with local understanding, who reports to Pullan.
It is clear that Pullan enjoys her position. “Every situation calls for a different solution,” she says. “It helps that I’ve been here for so long and have ;developed ;an ;in-depth understanding of the company.”
With the insurance world entering a new phase of regulatory change Marsh will benefit from its strong legal hierarchy. “We’re a stable department with a group of lawyers who’ve all been here for a number of years. Going forward we want to keep hold of that,” says Pullan. nName: Michele PullanCompany: Marsh & McLennanPosition: Head of legal, Europe, the Middle East and Africa (Emea)Industry: Insurance broking and risk advisoryReporting to: Global general counsel Peter Beshar (via general counsel Jim McNasby)Revenue: $11.4bn (£5.76bn) globally in 2007Employees: 55,000Emea legal spend: £3m-£4m (The Lawyer estimate)Emea legal capability: 24Main law firms: Herbert Smith, Mayer Brown, Slaughter and MayMichele Pullan’s CVEducation:University of Bristol; CPE course at theCollege of Law, Chancery LaneEmployment:1977-80: Graduate trainee, Shipping Dept, British Steel1983-85: Trainee, Norton Rose1985-88: Assistant, Marine Litigation Dept, Norton Rose1989-91: Associate, Litigation Dept, Baker & Mackenzie, London1991-98: In-house counsel, Sedgwick Group1998-2006: In-houselitigation counsel, Marsh & McLennan2006-present: Head of legal, Emea, Marsh & McLennan