It has not taken long for Richard Tapp to make his mark on the legal department at Carillion. After joining at the beginning of December last year as director of legal services and company secretary, Tapp has wasted no time in giving the department a complete makeover. Changes include restructuring the legal department internally, introducing a new panel and reviewing the relationship the company has with its external advisers. And, as revealed in The Lawyer last week, he aims to cut the company’s legal spend by more than 25 per cent.
“I came with a desire to review the use of internal and external lawyers, in line with a review of all our external services and re-engineering the business process,” Tapp says.
On his arrival, Tapp realised that the 40 firms used by Carillion on a rather ad hoc basis could be slashed to a panel of just 11. This was a decision aimed at not just reducing legal spend but also developing closer working relationships with the firms.
Around 50 firms pitched for the work, and The Lawyer understands that the tender document asked firms to suggest proposals that would offer Carillion the best value for money, looking particularly for innovation and risk-sharing on the part of the firms.
“We were looking for something that differentiated them from others in terms of the way that they proposed to do things – if they could do the job in a way which reduced the cost,” Tapp says. He stresses, however, that this was not the sole reason for selecting the firms on the panel.
Tapp is big on improving communication with external advisers and he obviously expects a lot from his firms. There will be regular meetings of all panel firms, starting with a launch at the end of this month. All the firms will be expected to present ways in which they can benefit Carillion by cost-cutting and other benefits.
Tapp plans to keep the panel firms on their toes. “We’ll keep the panel under regular review,” he says, adding that it was a deliberate move to ensure the company had more than one firm that could advise on each particular type of work; and while one of the aims of the panel is to develop closer ties with firms, it offers no guarantees of a particular amount of work or a set time period on the panel.
Internally, the lawyers were divided into teams to reflect the six core areas of the business: PFI/public-private partnerships (PPP), building, facilities management services and rail and infrastructure contractors. Individual lawyers have also been appointed to head up particular projects, rather than five or six of the team working on the same job.
As well as the restructuring, Tapp has had a number of other projects on his mind. In September the company completed its acquisition of Citex Management Services. It was one of the first pieces of work to fall to Slaughter and May, a firm that is new to Carillion but not to Tapp, who used the firm regularly during his time as head of legal at Blue Circle. He is quick to point out, though, that Slaughters was subjected to the same two-stage tender process as all other firms involved.
The purchase of Citex is in keeping with the company’s decision to grow the facilities management services side of the business. This is good news for both Altheimer & Gray and Reynolds Porter Chamberlain, the two firms advising on this type of work. Altheimer, which may seem something of a surprising choice, won the work because of the experience of Anthony Fine, who joined the US firm from niche City practice Orchard in 2000.
Internally, the team is also working on the recently won contract to provide up to £90m worth of building work and services to the Scottish Prison Service. It has also just picked up its second contract on the Channel Tunnel Rail Link – a job worth £92m. Both jobs will be managed in-house, which is a sign that Tapp plans to keep as much work within Carillion’s legal department as possible. It is a theory that fits with a man who likes to roll up his sleeves and get his hands dirty. “I don’t like to be sitting on the sidelines,” he says.
Indeed, Tapp is familiar with a busy legal department, having spent his last six years as head of legal at Blue Circle. It was a role that ultimately culminated in the hostile takeover by French company Lafarge, although the hostile bid did not come as a surprise to Tapp. “The company had taken a strategic decision to get out of non-cement,” he says. “We sold everything that wasn’t cement, but during the course of that process we had turned Blue Circle into a very attractive company.”
Lafarge, the world’s second-largest cement company, saw the opportunity and took it. The ultimately successful hostile takeover was the trigger for Tapp’s move to Carillion. Offered a similar role in the new company, albeit based in Paris, Tapp decided that it was time to move on to fresh pastures.
Carillion seemed to provide the challenge he was looking for. After spending a total of 15 years at Blue Circle in various roles, he was looking for a new challenge. “From a legal point of view, we’re doing a lot of non-standard things,” he explains. “Lawyers are central to the business. I like the culture, the values and the people.”
Tapp also enjoys the benefits of being an in-house lawyer – although he does admit it is the only side of the fence that he has been on. He trained at the National Coal Board, before moving to the Imperial Group and then on to Blue Circle. “As an in-house lawyer, you’re privileged to see so much of how a business works. No two days are ever the same – I don’t think you often get that,” he says.
Company Secretary and Director of Legal Services
|Legal capability||No lawyers, two company secretarial staff and three administrators|
|Company secretary and director of legal services||Richard Tapp|
|Reporting to||Chief executive John McDonough|
|Main law firms||Altheimer & Gray (facilities management), Ashurst Morris Crisp (pfi/PPP), Clarks (employment and environment), CMS Cameron McKenna (pfi/PPP), DJ Freeman (property development), fbc (minor litigation and property), Linklaters (pfi/PPP), Masons (construction), McRoberts (Scotland), Reynolds Porter Chamberlain (construction and facilities management) and Slaughter and May (public company, corporate and competition)|