Mark Harding: Barclays

In just two years, Mark Harding has dramatically reorganised Barclays’ legal function and instituted a full-scale review of its legal panel. Husnara Begum reports

Barclays group general counsel Mark Harding landed one of the most high-profile in-house jobs in June 2003 after a year-long headhunting exercise by the banking giant. Harding, formerly a senior partner at Clifford Chance, rejoined the magic circle firm in 2000 after a stint at UBS Warburg. He took over the reins from Howard Trust, who quit Barclays in August 2002 and later joined Schroders.

“When I rejoined Clifford Chance I hadn’t intended to go back to an in-house role and was thoroughly convinced that I was going to be there for the rest of my career. But the role at Barclays was too interesting a job to turn down,” explains Harding.

When Harding started at Barclays he hit the ground running. After joining he overhauled the bank’s legal team and concluded a major panel review. Harding has also provided legal input for a number of transactions, including advising the bank on the acquisition of South African bank Absa for £2.9bn – the biggest M&A deal Barclays has been involved in since Harding’s arrival.

Harding assessed Barclays’ in-house function and examined its structure, capabilities and role. This process resulted in a wholesale change in the deployment of the bank’s in-house lawyers, from a model based on generic legal advisers to a structure that combines two distinct but complementary roles.

These consist of business partners (lawyers working within each specific business) and those lawyers providing specialist expertise to the entire group, including commercial banking products, corporate, HR and litigation.

“One thing I decided to do early was to cement the legal team globally to create what felt more like a single function. We’ve made huge strides in that over the past couple of years and are adding more and more value to the business,” says Harding.

“We’re now on a voyage of continually upgrading the quality of the people in the team and refining the way we interact with the businesspeople and the way we manage legal risk,” he adds.

Barclays’ executive has recognised the key role the legal function has to play in the management of risk. Consequently, the bank has taken major steps to align its functional responsibilities and reporting lines. This resulted in the regulatory compliance and financial crime functions being brought within Harding’s remit.

Barclays’ use of external lawyers is policed rigorously by the bank’s in-house legal team. If staff stray from the policy, the consequences are serious, and in a worst-case scenario may lead to disciplinary proceedings being launched.

“We have a very clear policy on the use of law firms. Work can only be done by outside lawyers with the agreement of the general counsel in that particular business,” explains Harding. “Although there are occasional lapses there’s huge support for this policy from the business.”

As first revealed on (10 June), Barclays concluded a comprehensive review of its legal panel last month, adding Freshfields Bruckhaus Deringer to its general advisory panel alongside Allen & Overy, Clifford Chance, DLA Piper Rudnick Gray Cary, Linklaters, Lovells and Simmons & Simmons.

The appointment was a coup for Freshfields, as it narrowly missed out on winning a place on the coveted panel when it was last reviewed in 2003.

Harding says Freshfields was added to the general advisory panel because a number of the businesspeople said they would like to use the magic circle firm for particular types of work.

“During the past couple of years, Freshfields has been trying to build its relationship with us and was already doing a good job for parts of the bank. So we thought it was the right time to consider adding it to the panel,” says Harding.

Meanwhile, the private equity panel, which is split into sub-panels for infrastructure and management buyout work, was expanded, with Addleshaw Goddard, Clifford Chance and Freshfields winning places on the former and Travers Smith on the latter for the first time.

As well as the general advisory and private equity panels, Barclays has 10 other specialist panels, including corporate recovery, litigation, securitisation and structured capital markets (see for the full panel).

Harding denies that Barclays’ decision to operate such a huge panel system is part of a secret agenda to make it more difficult for firms to act for clients wanting to sue the bank. He claims that this issue has been blown out of all proportion.

Harding says Barclays simply expects its panel firms to comply with the Law Society conflict rules and does not impose additional obligations on its external lawyers.

“The conflict rules are there for a reason,” says Harding. “We have to take account of conflict principles, so they [law firms] should be too. I would therefore be very upset if we suddenly found one of our law firms on the other side of a piece of litigation.”

His proactive approach to raising the profile of Barclays’ in-house legal team has resulted in a much closer alignment between the development of the bank’s strategy and the identification of legal risks and opportunities. It may have taken Barclays almost a year to find Trust’s successor, but Harding has so far proved he was worth the wait.
Mark Harding
Group general counsel

Organisation Barclays
Sector Banking and financial services
Profits before tax £4.6bn
Employees worldwide 70,000
Legal spend £100m
Legal capability 250 lawyers worldwide
Group general counsel Mark Harding
Reporting to Chief financial officer Naguib Kheraj
Main law firms Allen & Overy, Clifford Chance, DLA Piper Rudnick Gray Cary, Freshfields Bruckhaus Deringer, Linklaters, Lovells and Simmons & Simmons