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In-house Lawyer: The power of straight talking

 

Richard Wiseman, Chief Ethics & Compliance Officer, Royal Dutch Shell Plc

Richard Wiseman, Chief Ethics & Compliance Officer, Royal Dutch Shell Plc

Author: Leigh Jackson

Published: 10/07/2008 03:10

Richard Wiseman is well on his way to becoming an institution as far as in?house lawyers are concerned. After all, very few corporate counsel have been in the job as long as the straight-talking Royal Dutch Shell lawyer.

Wiseman has spent 33 years in-house with the energy giant, dating back to a point when, in Europe, the concept of a career for a lawyer within a company had barely evolved. But while the world around him has changed, his enthusiasm for the role has not.

Being able to work closely with the commercial side of a large global corporation has obviously provided Wiseman with a range of legal challenges. Such challenges have included the £100bn restructuring three years ago, which united the Royal Dutch and UK-based Shell side of the business into a single corporate entity.

He explains: “The thing that kept me here is variety — there is virtually no part of the business I have not worked in and no skill I have not been able to use.”

Into his third decade with the company, Wiseman fulfils a dual role as general counsel for M&A and project finance, as well as recently taking on the position of chief ethics and compliance officer.

The latter role was created in 2005 following the Shell reserves scandal — when the company overstated its gas and oil reserves — and is a testament to the company’s place in the public eye.

Only last month, Shell became embroiled in fuel strikes after drivers of haulage companies Hoyer and Suckling, contracted by Shell to deliver fuel to its filling stations, staged a four-day strike affecting hundreds of garages across the country.

Shell has further been propelled into sometimes uncomfortable public scrutiny, thanks to the dramatic rises in oil prices over the last 12 months, with oil last week breaking the $145 (£72) a barrel mark.

Such factors underline Shell’s role as one of the most influential companies of the modern era and the challenges of protecting its reputation. Its status is reflected in the strength and depth of its legal team. Worldwide, the company employs around 700 lawyers.

The main bases of operation are the UK, where more than 100 lawyers operate, the Netherlands, where there are 116 in-housers and the US, which plays host to 122 Shell lawyers.

Recently the company has sought to bring the legal function closer to the business, with Beat Hess, its group general counsel, handed a role on the executive committee back in October 2007. And with the work of the in-house counsel important to the company, Wiseman is keen to ensure that Shell’s lawyers have the right qualities to be a success. “An in-house lawyer should have a mixture of technical excellence, judgement and communication skills,” he says. “If you cannot decide what is important or cannot deliver practical solutions, you are useless, but if you have communication skills and no technical skills, you are equally useless.”

Working alongside the legal team are Shell’s external firms, ranging from its global panel, including magic circle practices Slaughter and May, Allen & Overy, Clifford Chance and Linklaters, to a number of smaller regional firms.

In the US, the company relies heavily on Wall Street leader Cravath Swaine & Moore, while its Dutch business has close ties to national giant De Brauw Blackstone Westbroek. Other advisers on its global panel include Denton Wilde Sapte, Simmons & Simmons and US firms Debevoise & Plimpton, Baker & McKenzie and Vinson & Elkins.

Wiseman comments: “None of our firms have a monopoly and they know that. In my personal opinion it would be irresponsible to use magic circle firms for certain types of low-value work.

“Selecting law firms is not a brand-led process — we have good local knowledge. We can ask locally if we need to find a good team in Taiwan.”

As such, Wiseman says Shell remains ready to look beyond the globally-established brands of major international law firms to get the right service. He adds: “Niche practices can be impressive; the biggest challenge for large firms is distinguishing themselves from one another.”

And while diversity is a hot topic among many of the large firms, Wiseman suggests that his panel firms will not be chosen purely due to their equal opportunity hiring practices. “Top performers should be drawing from the widest pool of skilled people, including ethnic minorities and women, but we will not impose diversity as a quantitative measure,” he says.

The same approach is taken with regards to law firm pro bono work, an issue about which Wiseman remains largely cynical. “I am sceptical of pro bono work,” he says. “There is a difference between firms sending stacks of trainees to the East End and larger firms giving cash to small firms to enable them to provide the services they are best at to people who could not otherwise afford to go to a lawyer. You do not hear much about the latter.”

Recently, the familiar debate over charge-out rates returned to the fore when a Legal Week survey revealed that a fifth of partners at leading City firms believed that clients could face above-inflation fee rises this year, despite the global slowdown that is putting pressure on clients’ profits.

While some of his counterparts have been looking at ways to increase value — Tyco’s Trevor Faure handed the majority of European work to Eversheds and ITV’s Andrew Garard is moving to phase out charge-out rates in the broadcaster’s current review — Wiseman believes the key lies with practicality.

He says: “We look for an ability to provide a service and to get the job done with the least possible fuss. Cost is important but it is not at the top of our list. Firms must have the ability to deliver realistic solutions.

“You cannot throw countless lawyers at the problem and muddle through. It requires careful planning. What skills are provided and how they work with the in-house team are crucial.”

While Wiseman agrees that the chargeable hour is not an ideal formula, he argues that the development of viable alternatives needs to move beyond the talking shop if they are to become a practical alternative.

“There is a greater emphasis on ability in private practice to bring in clients; there is pressure in some firms to work ridiculous hours. It is not effective; if you look at billable hours it is clear that nobody can work at that length over any length of time. It is a rough and ready measure — some do relatively little in an hour. It is a mixed-ability class.”

He adds: “Alternative billing measurements are like teenage sex — every-one talks about it, but no-one knows what’s really going on.”

With Wiseman intent on building partnerships with his panel, avoiding a conflict of interest is crucial. Just last month, JPMorgan dropped Linklaters as an adviser due to the latter’s role litigating against Bear Stearns, which JPMorgan acquired earlier this year.

Asked how he would feel if Shell became embroiled in litigation with one of his advisers, Wiseman says: “I would be extremely annoyed. We are much more concerned about real conflict, not commercial conflict. It is important that firms remain loyal. A firm we were giving work to decided to act for a major competitor in a transaction we knew could get nasty without asking us — or even telling us. They came to the conclusion that they were likely to get more work from them than us. They got 100% more work from them, as it turned out.”

Loyalty is clearly one of Wiseman’s qualities for a successful corporate relationship — not only between firm and client but also between company and general counsel — after all, 33 years is a long time in business.

legalweek.com article

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