corpcounsel.com ❘ October 2013
The Business Magazine For In-House Counsel
Who represents america’s biggest companies
are they...
Janice More, GC of H.J. Heinz
plus: from lehman to small niche firm
• directors gone Wild
corpcounsel.com ❘ October 2013
The Business Magazine For In-House Counsel
who rePresents america’s biggest comPanies
...driving...
Dan Fitz, GC of British Telecom Group
Plus: from lehman to small niche firm
• directors gone wild
corpcounsel.com ❘ October 2013
The Business Magazine For In-House Counsel
Who represents america’s biggest companies
...him...
Bruno Cova of Paul Hastings
plus: from lehman to small niche firm
• directors gone Wild
corpcounsel.com ❘ October 2013
The Business Magazine For In-House Counsel
Who represents america’s biggest companies
...crazy?
We take another look at the changes
in client–laW firm relationships
by anthony paonita
Massimo Mantovani, GC of Eni
plus: from lehman to small niche firm
• directors gone Wild
Cover story
who represents
America’s Biggest Companies
Welcome/Willkommen/Bienvenue/Benvenuto to the latest edition of our survey of
companies and the law firms that represent them. You’ll find our customary wealth
of charts in these pages, but this year law firm mentions have expanded, thanks to a
broader survey of court documents.
We like to do something different each year as we examine that close client–law
firm relationship. Last year we stayed home and talked to U.S.–based companies
and firms. This year we decided to cross the pond to see if Europe’s continuing financial woes have sparked a reappraisal of how legal work is done. We wanted to know
whether the crisis has left in-house lawyers—the clients—dictating the terms when it
comes to fees and staffing and such. Lawyers over there had much to say.
Inside This special report and survey
Paul Dilakian
Overview: seeking a new normal page 70
the most-mentioned law firms page 81
Who represents IP america? page 82
the big Chart page 85
who represents America’s Biggest Companies
By Anthony Paonita
In search of
normal
While U.S. law departments struggle
to find their footing, Europe’s lawyers
lead the way.
Even casual readers of the financial media
may have noticed a certain pattern lately. With every
new report about unemployment, factory utilization, or
home/auto sales, forecasters and pundits alike seek to
reassure us that we’re out of the Great Recession, which
began in 2008. Is it back to normal yet?
In the United States, at least, the signs are somewhat
promising. The sickening skid in real estate prices has
been arrested, the auto industry is on track to sell some
17 million vehicles this year, and the employment market is stabilizing, if not keeping up with the pool of
people who want jobs.
The jury’s still out about the legal industry, however.
A couple of prominent law firms (Howrey and Dewey
& LeBoeuf) folded under heavy debt burdens, while
Photograph By Johann Sebastian Hanel
70
october 2013 ❘ Corporate Counsel
bruno cova says
that new gcs aren’t
bound by traditional
law firm ties.
who represents America’s Biggest Companies
clients—Corporate Counsel’s readers—continue to be
pressured by their C-suite colleagues to find ever more
creative ways to cut legal spending. That pressure was
always there, as Bruno Cova, managing partner at Paul
Hastings’s Milan office, says, but the crisis accelerated
the call for new client–law firm relationships.
Sounds like it’s time to come up with a new normal.
In this issue, we take stock of who is hiring whom
for legal work. We conduct this survey every year, and
it provides a good look at which prominent law firms
are getting the business of America’s largest enterprises [see “How We Do It,” page 85]. The charts speak
for themselves; by and large, marquee names dominate. They often change places in our most-mentioned
lists, gleaned from court filings. But these firms have
the savvy, guts, and firepower to put out, well, most
litigation fires.
And overall, this year’s top mentions go to Ogletree; Littler Mendelson; Jackson Lewis; Morgan, Lewis
& Bockius, and Seyfarth Shaw, all of which were at or
near the top last year [see They’re the Top,” page 81].
But while America Inc. tends to hire Big Law, the
way that global companies engage firms is undergoing
fundamental changes. It’s more a fitful evolution rather
than full-on revolution, but the change is unmistakable.
Convergence has become a best practice, and all sorts of
alternative fee arrangements are, if not commonplace,
at least a common part of the discussion.
Our survey has another use. It provides a convenient reason to take the pulse of the client-firm relationship. Last year, we examined how the industry in the
U.S. was morphing into a different beast. This year, we
decided to look overseas, to Europe. The Eurozone crisis is ongoing, with an almost daily Greece deathwatch.
Will it exit the common currency and take the rest of
the continent down with it, much as Lehman Brothers
threatened to do in the United States back in 2008?
On our own beat, the world of corporate counsel,
we are getting word that in Britain, innovative firms
and legal departments are engaged in a concerted
campaign to transform the legal industry. It might be a
different continent, with different legal traditions and
infrastructure, but the question remains the same: Has
the economic crisis brought about a permanent shift in
the client-law firm relationship?
The answer seems to be yes. While corporate chief
legal officers have always been under pressure to
reduce costs and boost efficiency, the economic crisis
has brought a new sense of urgency. “I’d have to say
that the crisis has made the need more pronounced,”
says Simon Davies, managing partner of London-based
Linklaters. “There’s a great deal of pressure to make not
only cost reductions, but sustainable cost reductions.
That involves not only a tightening of belts, but also a
changed relationship with clients.”
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october 2013 ❘ Corporate Counsel
Another observer is more blunt. “Across the Eurozone, it’s been carnage,” says Tony Williams, a principal at Jomati Consultants LLP, a London legal consultancy. Williams, former managing partner of Clifford
Chance, adds that transactions across the continent are
way down, and there’s a surplus supply of top-quality
legal talent in Europe. M&A activity in Europe, in fact,
is down so far this year by 43 percent from 2012, according to Thomson Reuters. As a result, “the better general
counsel are canny, far more than in the U.S., in their
“We wanted to access the
resources the larger
firms have, and which
larger law departments
have.”—Janice more
demands,” he says. “If you’re not offering fixed-fee
pricing” in Europe, Williams adds, “you’ve got to have
a bloody good reason. U.S. firms have gotten away
with slight discounts, but then they say, ‘Please leave
us alone.’ ”
That pressure applies to the continent as a whole.
But some of the most innovative responses have come
from companies in the U.K. One of the revolutionaries
is Janice More, general counsel of the U.K. division of
H.J. Heinz Company. She heads a 10-lawyer department. With such a small department, she thought she
could leverage its reach and power by that fashionable
solution, the law firm panel.
Her department once retained some 60 law firms;
that has been slashed to two tiers. Three multinational,
across-Europe firms, Eversheds, Freshfields Bruckhaus Deringer, and Herbert Smith, represent the top
tier; and the company uses four local firms in various
jurisdictions.
The process took over a year. “We wanted to do it in
three months,” says More, a soft-spoken lawyer who
comes across as anything but a firebrand. The chosen
firms went through several gruel­ing steps, from beauty
contests to RFIs and finally RFPs.
But Heinz’s reason for winnowing down was more
than a desire to have fewer firms do its work. “We
wanted to access the resources the larger firms have,
who represents America’s Biggest Companies
Martin Hunter
Corporate Counsel ❘ october 2013
73
who represents America’s Biggest Companies
The London market for
outside counsel has been
under pressure . . .Most
companies are taking a
tougher line.”—dan fitz
and which larger law departments have,” More says.
“We’re not as big as Shell or the banks.”
So the special relationship involved caps on fees, and
some freebies. More’s lawyers now get training (some
free; some at a reduced rate) and specialized white
papers on food law. They have access to private areas
on the firms’ websites, with relevant information. “We
don’t get bombarded with email alerts,” says More.
And the closeness goes both ways, she adds, saying that
because it’s such a small panel, More and her team have
schooled the firms on the ins and outs of their business.
The changes, however, aren’t limited to who gets the
74
october 2013 ❘ Corporate Counsel
squeezed them out. More work is done in-house, says
U.K. general counsel Christopher Fowler. “I’d never
use external lawyers, for example, for negotiations,” he
says. And big firms like Freshfields, says Fowler, still
charge a premium for pension advice. His solution?
Have in-house lawyers do it.
When BT does go outside, it often farms out pieces of
the work, to be coordinated in-house. Offshoring figures
big in BT’s menu of outsourced work. And, adds Fowler,
he never agrees to an hourly rate.
BT also is trying out new arrangements, says group
general counsel and corporate secretary Dan Fitz. For
contract work in the U.K., the company puts jobs on
an online portal. A BT lawyer does triage, and the jobs
usually go to legal process outsourcing outfits (LPOs).
Large contracts (more than $150 million) go to firms,
says Fitz, who adds that his goal is to increase the percentage of work going to LPOs.
Is there any resistance? “Not at all,” says Fitz. “The
London market for outside counsel has been under pressure, due to the economic crisis. Most companies here
are taking a tougher line on the rates they’ll pay.”
Martin Hunter
business. It’s also in how the work is done. And in some
ways, European general counsel are embracing new models of procuring and delivering legal services. “Initially
clients weren’t managing law firms any differently, just
demanding big discounts,” says Leigh Dance, executive
director of the Global Counsel Leaders Circle, an organization of senior global in-house counsel. “Over time the
typically lean in-house legal teams in Europe have borrowed each other’s ideas and become far more sophisticated in how they gain value from their law firms.”
British Telecommunications plc, for example, is taking to heart the gospel of disaggregation, as espoused by
legal futurist Richard Susskind. His latest book, Tomorrow’s Lawyers, talks about such innovations as virtual
courts, Internet-based global firms, online document
production, commoditized services, and legal process
outsourcing.
But for BT, tomorrow is already here. The legal
department of the $14 billion business (with 90,000
employees) has taken a hard look at how it does its
work, and where it found extra costs, it ruthlessly
Lorenzo Pesce
who represents America’s Biggest Companies
Sounding slightly New Age (in the Susskind sense),
Fitz talks about his philosophy as a client. “We’ve abandoned the concept of the market as being inside versus
outside counsel,” he says. “It’s much more stratified. My
job is to get the best quality at the best price, and we’re
part of the supply chain.”
The result? “In 2010 we were spending about $1.5 million on external fees,” says U.K. GC Fowler, speaking of
fees in that country. “Now we’re struggling if we spend
$150,000.”
Many British lawyers interviewed for this article say
they’re way ahead of their continental counterparts. But
those counterparts aren’t necessarily sitting still, either.
“It’s basic market forces,” consultant Williams says.
“You’ve got oversupply, and the buyer says, ‘I’ve got the
buying power.’ ”
Massimo Mantovani heads the legal department of Eni
S.p.A., Italy’s preeminent energy company. As such, he’s
general counsel for a department of 400-plus lawyers, the
76
october 2013 ❘ Corporate Counsel
“You can find a big man in
a small firm in Italy [who]
provides a cheaper rate.”
—Massimo Mantovani
largest department in Italy. The department occupies a
space in Italy’s in-house community akin to that of General Electric Company in the United States. Besides taking
advantage of its enormous market power, it acts as an
incubator for Italian and international legal talent.
Mantovani’s chosen weapons right now are second-
who represents America’s Biggest Companies
ments from firms and being a choosy, bargain-seeking
shopper. (He’s a true believer in the old adage “you hire
lawyers, not law firms.”) He says that with the surplus of
talent on the law firm side, he can take in a lawyer to work
at Eni as a secondment (right now, there are eight) on a
contract basis for anywhere from 18 months to two years.
Plus, when he does hire a firm, he looks for a “professore,”
a prestigious legal authority not necessarily attached to a
big firm, with big-firm hourly rates. “You can find a big
name in a small firm in Italy,” Mantovani says. “He’s in a
boutique firm, and provides a cheaper rate.”
Still, given the global nature of Eni’s business, Mantovani still hires Big Law for certain legal work, mainly
international transactions and arbitration. But he calls the
reduction in his use of outside firms “significant”—limited to once or twice a year.
Big firms aren’t sitting still, either. They’re adapting. Paul Hastings’s Bruno Cova, a former general counsel of automaker Fiat S.p.A., says that in Italy, for example, 90 percent of corporate legal work is on a fixed-fee
basis.
The global law firm Linklaters, too, is getting with the
program. The firm has reorganized into industry segments, rather than the traditional legal practice areas,
says managing partner Simon Davies. And, ever mindful
of costs, Link­laters has established a shared legal service
team in Colchester, a lower cost centre, about 60 miles
northeast of London.
Are lawyers resisting the move? No, says Davies. “People make a lifestyle choice, and they avoid the high cost
of living in London,” he says. Other firms are looking at
Northern Ireland and Scotland for satellite locations. That
way, they avoid both high office rents, and the higher costs
(salary, etc.) of having attorneys living and working exclusively in expensive London.
In general, the crisis has proved to be an opportunity,
as much as a time to hunker down and hope that the worst
is over. When winnowing their outside firms for a panel,
Davies and others say, savvy GCs have gotten more flexible, naming top-tier firms for big matters, but also adding boutiques to the mix for smaller, more discrete work,
like IP.
Heinz’s More says the pressure has given her a chance
to examine how even big matters are handled. “You can
commoditize matters beyond repetitive contracts,” she
says. “You can slice and dice litigation into different parts
and do different deals for different segments.”
What’s next? Companies will continue doing what
they’re doing. Some of the change, says Cova, is demographic. The old guard is passing, and a newer crop of
younger general counsel across Europe isn’t tied to the old
way of doing things—or tied to historical relationships. “It’s
good for me,” he says, “and it’s good for corporations.” ■
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