Stayin’ loose

A fundamental shift from hardware to IT services by Fujitsu means general counsel Richard Allnutt has had to revolutionise the legal department and keep his options open. Emma Vere-Jones reports

The first thing that strikes you on entering the office of Richard Allnutt, group counsel at Fujitsu Services, is the quantity of paper spread about the room – albeit in a very ordered manner. Maybe that is why one job for Allnutt and his team over the next couple of years is a move towards a paperless office.

“My challenge personally is to work out how to gravitate to some form of document management which enables me largely to dispense with paper files,” he says. “Not least because the actual business of creating a paper file takes up way more time.”

It should not be too difficult for those working in the IT sector, but then Allnutt is the first to admit that he has never been a real techie. “The important thing is not to be too ambitious. Anything you introduce has to be used by the least techie person you’ve got,” he says.

With an in-house team of 21 lawyers in the UK alone, spread over five different locations, Allnutt’s job is less techie, more managing partner. “My job’s a bit of a mixture,” he admits. “I’m the senior partner of this practice, the managing partner and a practising partner. I deal with a lot of the issues which come up around corporates and policy issues which need to be addressed. I get involved in M&A activity. It’s a case of trying to ensure there are enough hours in the day to keep on top of various issues.”

The size of the in-house team means that a large proportion of the work can be handled internally. This year, for example, the team managed the transition of the company from ICL to Fujitsu Services, a project led by Allnutt’s deputy Jonathan Smith.

But first a bit of history. When Allnutt joined from Simmons & Simmons as group counsel in 1999, the company, although a subsidiary of Fujitsu, was known as ICL. After 20 years in private practice at Herbert Smith and then Simmons, where he made partner in 1988, Allnutt decided on an in-house position. “The role seemed to fit very well, because at the time I took the job, the company – at that time ICL – was planning a flotation and I’d spent quite a bit of the ’90s engaged in a number of major reconstructions or new flotations.”

Ultimately, however, ICL made the decision not to float, and instead decided to look more closely at its relationship with parent company Fujitsu. The parent company took a decision that this year resulted in most of ICL becoming Fujitsu Services, and another subsidiary DMR acquiring part of ICL’s consulting business and relaunching under the name Fujitsu Consulting.

“It was an extremely important move, carried out with a great deal of care to ensure that the maximum advantage, to our clients and to the group as a whole, was derived from the adoption of this prestigious mark,” Allnutt adds.

As well as a change of name, the last decade has also seen a change of direction for the company – and consequently a change in focus for the legal department. A reshaping of ICL throughout the 1990s has seen a move away from selling computer hardware and towards providing IT services. “The nature of that change in terms of business was reflected in the nature of the contracts the company made,” explains Allnutt. “On the whole, selling kit is fairly straightforward in legal terms. Service contracts run for many years, and the nature of what has to be done is extremely complex. So the legal department has had to change to reflect that type of activity.

“We [the legal team] found ourselves adopting a number of measures to change the way in which the legal department related to the business, and that’s been an ongoing change management process. The business has been changing and inevitably the legal department has changed to reflect that.”

When it comes to dealing with external lawyers, Allnutt has what he describes as a very loose panel. “I personally believe that you obtain considerable advantages from having an established relationship with a smallish number of external law firms. I inherited a number of relationships with law firms and those relationships have continued,” he says. “For example, we do a lot with Masons, who have themselves evolved their traditional construction practice and have added strength in IT.”

However, there is certainly no hard and fast rule. At the end of the day, it comes down to finding the best person for the job. “I like to ensure, in these very competitive days, that we send the work to the right firm,” states Allnut. “You’re not doing any firm a favour by giving it the work because you happen to use them most of the time, if the firm isn’t necessarily going to shine.”

Although he inherited most of the panel firms, Baker & McKenzie and Barlow Lyde & Gilbert have been introduced since Allnutt’s arrival. “Bakers and Barlows both have a good IT practice, so they were logical firms to try out,” he says. Mayer Brown & Platt’s merger with Rowe & Maw, creating Mayer Brown Rowe & Maw (MBR&M), has also generated more work for the firm. “Mayer Brown was a firm we consulted on American issues, and now we use MBR&M when appropriate on non-American things as well,” he notes.

Although the team does not want an unmanageable panel, Allnutt stresses that it is still important to have a range of different lawyers for a range of different situations.

“There isn’t a very large number of commercial lawyers with good IT experience,” he says. “At any given time there might be only one or two such people in a given firm; and if they’re busy with something for some other client, it may not be practical to use that person even if they might have been the first point of call. So what we’ve been trying to do is get a clear idea of who has good experience, and we tend to think therefore in terms of individual lawyers rather than in terms of firms.”

Like any legal department, cost is an issue. Although the company from time to time uses Linklaters or Slaughter and May on large transactions, work is often sent out to medium-sized firms as it proves to be more economic. Likewise, the team also has relationships with a number of regional players.

“In Manchester, for example, we use Halliwell Landau for employment,” Allnutt says. “They’re the kind of firm that’s a good, solid regional firm, which has some interesting capabilities outside that particular one, which is where we met them. I can envisage that kind of firm on other things.”

But the best form of economy is for the team to do as much work as possible in-house. Consequently, like any good managing partner, Allnutt is always on the lookout for potential talent. The latest recruit is Mark Jolly, who joins the Birmingham office from Marconi in November. In fact, you get the feeling that if Allnutt had it his way, outsourcing legal services would be a thing of the past.
Richard Allnutt
Group Counsel and Company Secretary
Fujitsu Services

Organisation Fujitsu Services
Sector IT services
Employees Appoximately 16,000 (including 1,500 temps and contract workers)
Legal capability 21 in UK
Annual Turnover £2bn (to 31 March 2001)
Annual legal spend Undisclosed
Group Counsel and Company Secretary Richard Allnutt
Reporting to Director of commercial and legal Paul Lush
Main law firms Baker & Mackenzie, Barlow Lyde & Gilbert, Linklaters, Lovells, Masons, Mayer Brown Rowe & Maw, Rouse & Co and Slaughter and May, plus a number of regional firms