Agenda | Winter 2016/17
Energy giant pushes through alt billing
The march away from hourly billing continues as Royal Dutch Shell, one of the world’s largest consumers of legal services, confirmed that all its work must be priced under ‘appropriate’ fee arrangements (AFAs), following its 2016 panel review. AFAs, which include capped, fixed and contingency fees, had been in place for all litigation work since June 2014, but now apply to all legal matters. In addition, every piece of work will be put out to tender to three or more panel firms. The shake-up was overseen by associate general counsel for global litigation, strategy and co-ordination Gordon McCue, who led Shell’s overall panel review.
Regulator: legal market failing clients
Following its year-long review into the legal services industry, the Competition and Markets Authority (CMA) has said clients are struggling to find legal services at the right value. In its report published in December last year, the CMA said the current regulatory framework for legal services ‘may not be sustainable in the long term’ and recommended the Ministry of Justice review the system. One key recommendation was for better disclosure of pricing information, with the CMA finding only 17% of firms publish prices online. The report called for ‘a step change in standards of transparency’ on pricing and the regulatory status of providers.
Bluechip appoints New Law leader
Consumer and pharmaceutical goods giant Johnson & Johnson has entered into a five-year deal with Axiom to support the company’s global procurement contracting function, further proof of the inroads New Law providers are making into institutional legal services. In a deal announced in December, Axiom will be responsible for thousands of procurement agreements in more than ten different languages, across a dozen contract types for Johnson, through a team of negotiators and subject matter experts, as well as a team of lawyers who will provide a ‘white glove service’ for more complex agreements.
Corporate risk on the rise
Cyber incidents, data privacy, rising regulation, litigation funding, and shareholder activism are putting corporate leaders under more pressure than ever to fall foul of investigations and prosecutions over alleged wrongdoing, according to a report released in December. Analysis published by Allianz Global Corporate & Specialty claimed that directors and officers are ‘walking a managerial tightrope’ as executive liability increases annually.
BAT brings in Slaughters for bribery probe
British American Tobacco (BAT) has picked Slaughter and May as its sole legal provider for its investigation into allegations of bribery and corruption, in place of Linklaters. A BAT spokesperson said: ‘We have decided as a matter of efficiency to consolidate the work in one firm, Slaughter and May.’ The tobacco company historically often instructs Herbert Smith Freehills, turning to the firm in October last year on its offer to acquire the remaining 57.8% stake in Reynolds American for $47bn.
Departures at Rio Tinto
Rio Tinto legal executive Debra Valentine has stepped down from her role, after having previously notified the company of her intention to retire in May 2017. The mining firm has been caught up in a scandal that saw senior executive Alan Davies suspended with immediate effect in November after an investigation found a $10.5m payment was paid to a consultant related to an African iron ore project in Guinea. Valentine became group executive of legal and regulatory affairs in 2009, after having joined Rio Tinto as head of legal in 2008. She was previously deputy GC and vice-president of United Technologies Corporation. Before that she was a partner with O’Melveny & Myers in Washington DC.
Diageo panel refresh
Despite the general trend for smaller panels, Diageo expanded its UK roster in the last quarter of 2016, with Slaughter and May, Pinsent Masons and Addleshaw Goddard reappointed, while Bond Dickinson has made the panel for the first time. The review began in June and the current panel has been appointed for a three-year term. CMS Cameron McKenna has been Diageo’s preferred supplier in Europe since 2009, but is not on the UK roster. In addition the legal team, led by GC Siobhan Moriarty, retains some specialist approved suppliers for intellectual property, and some commercial and contentious work.
Moves that matter
- BP’s former group GC Rupert Bondy has joined Reckitt Benckiser as senior vice-president, GC and company secretary. BP has appointed Eric Nitcher to fill Bondy’s role. Nitcher has a lengthy history with the oil giant, having previously acted as group GC of BP America and senior associate GC for disputes and regulatory matters.
- Worldpay has promoted Ruwan De Soyza to group GC following the exit
of Mark Edwards after two years in the role. De Soyza was previously GC of global ecommerce at the fintech company and has also held roles as interim head of franchise development and management. He will lead Worldpay’s 35-strong legal team.
- Waste management company Biffa has hired a new GC and company secretary, taking on GlaxoSmithKline’s interim assistant company secretary Rachael Hambrook. Hambrook has worked for a number of FTSE and blue-chip companies, including BT, Compass Group, energy company Ruspetro, Centrica and DHL Express UK.
- Google’s longstanding UK and Ireland legal chief Emma Jelley has departed the search engine giant for a role as GC at tech start-up Onfido. Jelley oversaw Google’s legal affairs for the UK and Ireland for the past eight years and headed the legal team for the region.
- Standard Chartered has recruited a senior lawyer from Barclays’ legal team, with regulatory lawyer Chris Allen joining the investment bank as its new GC for clients and products. Allen will oversee legal across the bank’s main business units, including corporate and investment banking, commercial banking, private banking and wealth management. He was global head of regulatory policy across Barclays’ investment bank, retail bank, corporate bank, wealth management and Barclaycard.
- Mishcon de Reya employment lawyer Helen Croft has joined communications agency Mission Media as its chief operating officer and GC. Croft joined Mission Media in November last year where she is now tasked with leading the company’s legal unit. Founded in 2004, the company has offices in London, New York and San Francisco, and is currently a client of Mishcon’s.