Profile | Autumn 2017
Within a month of Mark Cooper joining National Grid (NG)’s in-house team in 2015, things became very busy very quickly. UK general counsel Rachael Davidson told him that one of the businesses he was looking after – NG’s gas distribution network – was going to be sold off.
‘You can certainly say there was a steep learning curve!’ says Cooper, who went on to become GC and company secretary of that spin-off, which officially became Cadent Gas in March 2017. He cites it as one of the most complex and rewarding pieces of work he has handled during his career. The transition from NG to Cadent not only involved selling the gas distribution business, but also disbanding all its support teams (including legal) and then setting them all up again. Cooper was pressed to separate out all of these business branches by October 2016. In addition, he was tasked with working out the support the gas distribution company was getting and what it needed going forward. ‘Getting it right was the most rewarding part,’ he says.
Cooper began his career at Wragge & Co in 2002, where he qualified as a projects lawyer, mostly working on public-private partnership deals. During his time there, he was sent out on an 18-month secondment to the Ministry of Defence, assisting with legal matters at its commercial directorate in Whitehall. He highlights the placement as a key influence in his decision to move in-house. ‘One of the great things about private practice is trying to work out what the client wants, but when you go in-house you’re there working day-to-day with the client, so you get a much better idea. Helping the business achieve what it needs makes the job really rewarding. When you move in-house you need to get involved in a lot of different areas. It pushes you and makes you develop.’
After six years at Wragges, Cooper took a corporate counsel role at IT company RM Education and stayed there for three years. In March 2012, he joined Rolls-Royce as the lead lawyer for its energy business and was therefore heavily involved when that business was sold at the end of 2014 to Siemens for £785m in cash.
Last November, a building contractor went through some pipes and cut 6,000 customers off. If you don’t work with the other teams around the business, the job won’t get done.
Following the sale, Cooper shifted focus to Rolls-Royce’s defence and aerospace businesses, but it was not long before an opportunity at NG arose and Cooper was tempted by the role of ‘legal business partner’, as he was interested in providing the lead support to businesses.
Upon arrival, Cooper found himself at a company heavily in transition, with NG selling a majority stake in its gas pipe network to a consortium led by Australian bank Macquarie in a deal worth around £13.8bn. Cooper describes the sale as a ‘Groundhog Day moment’, with very demanding time constraints, but adds: ‘It actually turned into a real opportunity. It gave me the chance to be the general counsel of the gas distribution business and work with a great leadership team.’
The majority of the Cadent team were in place by the end of October 2016, but Cooper says NG still owned 100% of the company until March this year, so there has been plenty of transitional support in the run up to the launch of the new business. By the end of 2016, Cadent was fully responsible for running all its own processes and now boasts a legal team of nine in addition to one legal executive, two risk specialists, three support staff and a business graduate on a six-month placement.
The team is considerably smaller than the legal team at NG, but there is an upside. ‘The benefit of having just one team means working more closely and getting decisions made quicker,’ he says. Whereas at NG every team needed to be prepared to help all areas of the business, Cadent’s pure focus on gas distribution allows for even more streamlining: ‘When all the support teams focus on one business, it makes a huge difference.’
While Cooper’s small group of in-house lawyers can be described as ‘jacks of all trades’, it does comprise specialists in different areas of law, such as procurement, human resources and property. ‘I’ve got a number of people in the team who have got those specialisms but are happy to do some of the additional work. Each day can bring us something new and exciting to look at.’
A lot of the day-to-day work consists of routine contracts and procurement, but Cooper highlights the very tangible risks that are prevalent in the industry. ‘We’re there to transport gas safely, to make sure people are kept safe and warm and connected to the network. Last November, a building contractor went through some pipes in Bedfordshire and cut 6,000 customers off. If you don’t work with the other teams around the business, the job won’t get done.’
Cooper is also under pressure from the energy regulator, Ofgem. In addition to acting as a consumer watchdog, Ofgem sets the price controls for Cadent, and so Cooper’s interaction with the body is important. ‘Ofgem challenges us, but it challenges us appropriately.’
The external legal panel arrangement at Cadent is currently mirrored to NG and, until Cadent makes its own provisions, all supply contacts at the company are the same as at NG. As a result, following a recent NG panel reshuffle, a roster of 12 firms, including Herbert Smith Freehills, Linklaters, Addleshaw Goddard, DLA Piper, Dentons and Norton Rose Fulbright currently make up Cadent’s external counsel.
Cooper’s relationship with external counsel is based on a collaborative and open approach, but he also has a sharper focus on fees and pricing. ‘We don’t expect any surprises there. Having upfront discussions about what a matter is going to cost is necessary.’
He favours fixed-fee arrangements for the majority of cases, but on large transactions capped daily rates are seen as an alternative. As a result, Cooper has turned to Halebury and Eversheds Sutherland’s Agile in the past for their more receptive approach to alternative fee arrangements. That said, he has observed that more traditional firms have been ‘quite open’ to alternative structures on recent work.
Once Cadent has bedded down it would be logical to expect some internal reshuffling, but Cooper is looking to stick rather than twist. ‘I don’t see the team changing radically by this time next year. We’ve got a good balance. The advantage of having our panel law firms means when we get that upswing in work we can outsource it.’
I don’t see the team changing radically by this time next year. We’ve got a good balance. Having our panel law firms means when we get that upswing in work we can outsource it.
He concedes, however, that Cadent is in need of appropriate IT infrastructure: ‘As part of the separation from National Grid, Cadent has a number of temporary support agreements (TSAs) in place for areas such as information systems for a limited period of time. Information systems are key to the successful separation of a business. My team are working with our information services colleagues to put in place alternative arrangements and contracts before the various TSAs come to an end. This is a really important project, as we need to act quickly, and minimise any disruption to our IS services and our business.’
Clearly conscious of the wider impact of his business, Cooper suggests that the future of gas as an energy source is an overriding consideration for him and for Cadent’s business strategy in the long term. This is in part due to the ‘energy trilemma’, a framework designed by the World Energy Council to organise a strategy for energy sustainability. The trilemma is based on three core dimensions: energy security, energy equity and environmental sustainability.
The environmental sustainability aspect is focused on the development of renewable and low-carbon sources of energy. ‘If you look at our generation and its peak power, it’s around 55GW, which is the equivalent of around 55 million kettles on at the same time. Peak heat demand in the winter is over 300GW.’ He adds that the controversial proposed nuclear power station in Somerset, Hinkley Point C, will generate 3.2GW. ‘It’s a privilege to look at what the future role of gas will be over the next few years – that’s the big picture.’
Ultimately, however, Cooper is focused squarely on ensuring that his legal team is central to how Cadent develops in the short to medium term: ‘We’re very focused on how we can support the business. We are not the department of “No.”’
At a glance Mark Cooper
- 2002 Associate, Wragge & Co
- 2008 Corporate counsel, RM Education
- 2012 Legal counsel, Rolls-Royce
- 2015 Legal business partner, National Grid
- 2016 General counsel and company secretary, Cadent Gas
PwC UK – key facts
- Size of team Nine
- External legal spend £1.5m
- Preferred advisers Addleshaw Goddard, Berwin Leighton Paisner, Bircham Dyson Bell, CMS Cameron McKenna, Dentons, DLA Piper, Eversheds Sutherland, Halebury, Herbert Smith Freehills, Irwin Mitchell, Norton Rose Fulbright, Linklaters, Shakespeare Martineau