Richard Reade: ISS UK

ISS does more than just clean – it manages whole buildings. And its expansionist attitude has driven general counsel Richard Reade to employ some help.

Cleaning may not generally be associated with greatness, but for international facilities company ISS it is the stuff empires are made of.

ISS UK’s general counsel Richard Reade, who joined from Pinsent Masons last year, explains that the company would not be where it is today if it was not for the dedication of a group of Danish cleaning ladies.

“ISS started out as a Danish security company in 1901,” he says. “The security guards brought in their wives to do the cleaning while they were on duty. The wives were doing such a good job, the company felt it had to start paying them – it was making more money from the cleaners.”

From those humble beginnings, ISS expanded into the rest of Europe in 1965, with the 1970s seeing international expansion as well as a listing on the Copenhagen Stock Exchange.

According to Reade, ISS – which was taken private by Scandinavian private equity house EQT in 2005 – is the world’s leading cleaning company. Yet in the UK at least the legal function remains small. Reade has been the sole in-houser, but he will be joined by legal counsel Elena Zachariou, formerly a solicitor in Total UK’s legal team, this month (The Lawyer, 17 December 2007).

“The UK business has not traditionally had a lot of lawyers,” Reade explains. “France, by comparison, has 11. I want to grow the team.”

Quite how and when the team will grow has yet to be decided, although Reade points out that due to the acquisitive nature of the business, it is within the realms of possibility that he could acquire additional lawyers.

“We have two other lawyers in our subsidiary Mediclean,” he says. “We also acquired school meals company Caterhouse, which has two lawyers and a paralegal.”

The mix of companies that now comes under the ISS banner demonstrates how the company has diversified its portfolio in recent years. It manages army barracks, runs restaurants and provides cleaning and security services to a range of different companies. This means that Reade’s workload is varied too.

“In a lot of sectors companies are converging, with catering people going into cleaning and security people going into cleaning,” says Reade. “We like to think that we are ahead of that curve and we don’t think cleaning will be the core of the business by the end of the year. We increasingly do everything to do with running buildings, inside and out.”

From a work perspective Reade, who handles matters for the company’s board in addition to his legal duties, spends the bulk of his time working on commercial contracts, although he admits to having to deal with pieces of litigation from time to time. Unusually for an in-houser, Reade was a litigation lawyer while in private practice, which means he is well placed to handle these issues when they come up.

Reade outlines one particular piece of litigation. “We had one potentially high-profile case with a company that was very acrimonious,” he recalls. “We thought we had entered an agreement to make a joint bid to a customer and the other company would subcontract work to us. We thought there was an exclusive relationship but the company self-provided and didn’t use us. It put in a variant bid and won the work. We took it to mediation and had an excellent settlement. There was a cash payment and we were put in contact with one of the competitor’s customers and got a £10m contract out of it. That was four times bigger than the contract we lost.”

In terms of external counsel, Reade instructs partner Joanne Ellis at Pinsent Masons on corporate work and Mary Chant at Blake Lapthorn Tarlo Lyons on commercial contract work.

“I try to keep the external advisers as tight as possible,” explains Reade. “We need people to understand the business. We do a lot of different things so it’s not easy.

“The relationship with Pinsents goes back 30 years and Blake Lapthorn came about through my predecessor – I’ve inherited it but it’s a very good relationship,” he adds.

Due to the fact the ISS UK legal team is so small, Reade has regular contact with Pinsents and Blake Lapthorn, contacting each around twice a week. He also turns to LG from time to time and will use Clifford Chance for big-ticket corporate work and Baker & McKenzie for banking and refinancing.

“The legal spend last year was £1m and will probably be the same this year,” he says. “It was high because of the growth of the business – when the business grows the legal team has to outsource.”

With the company’s private equity backers looking into the possibility of a flotation in the near future, the workload for Reade and his external advisers is almost certain to increase.

UK general counsel: Richard Reade
Organisation: ISS UK
Sector: Facility services
Reporting to: Chief finance officer Henrik Andersen
Turnover: £715m
Employees: 42,000
Annual legal spend: £1m
Global legal capacity: 50 (two in UK)
Main law firms: Blake Lapthorn Tarlo Lyons, Clifford Chance, LG, Pinsent Masons
Richard Reade’s CV
Education: 1994-96: Cardiff University (CPE and LPC)
Work history:1996-98: Trainee, Eversheds, Birmingham
1998-99: Associate, Eversheds, Birmingham
1999-2006: Associate, Pinsent Masons, Birmingham and London
2007-present: UK group general counsel, ISS UK, Woking