Working in-house becomes an exciting option for lawyers

Lawyers’ power of pure legal innovation translates to creating commercial opportunities
Digital medicine: Novartis’s Matthew Owens

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The in-house legal role has seen a dramatic transformation over the past 10 years. Once seen as the poor relation to private practice, working in-house has become the exciting option for lawyers with an interest in innovation. The 2015 rankings show how the innovations of in-house practitioners reflect the rapid rate of change in some industries such as pharmaceuticals, healthcare and energy.

The pharmaceutical industry is adapting to “outcomes-based” medicine, where the price of drugs is based on their performance. in-house lawyer Matthew Owens is helping Novartis get to the forefront of digital medicine. His role is to enable the collaboration of the pharmaceutical and technology industries, which will in turn create products such as microchipped pills that track patients’ adherence to their prescriptions, as well as contact lens technologies that detect blood sugar levels in diabetics. For Novartis, these products mean new partnerships with technology companies such as Proteus Digital Health and Google.

Mr Owens is trying to forestall the problems facing the union of these two industry sectors. David Morris, global head of development for Novartis, says: “The lawyers are changing the mindset in the industry. They are seeding an ecosystem for the development of new products and supporting partners in the process with a more collaborative approach to intellectual property.”

The need for lawyers to form new-style commercial partnerships was also evident in the work of Nick Maltby at Genomics England, the UK government-backed organisation building one of the world’s largest genetic databases. Mr Maltby was part of the start-up company and now has other corporate responsibilities besides being the in-house lawyer.

He was instrumental in negotiating a critical joint venture with Illumina, the US genetic technology company that will sequence the genomes. The favourable terms mean that the UK has access to cutting-edge technology and the relationship between Genomics England and Illumina has moved from a standard purchaser-supplier relationship to a partnership.

Lawyers who find themselves at the intersection of law, science and business have an unprecedented opportunity to be more than legal innovators.

The team at PayPal is involved in product design and has an active role making the company’s new offerings successful. Commercial colleagues credit the UK legal team with a direct contribution to building PayPal’s increase in market capitalisation.

Being able to contribute to both gross revenues as well as net earning is a hallmark of all the teams in the 2015 FT ranking. Some teams were seen by commercial colleagues as direct revenue generators and others more as revenue facilitators.

But none were seen as cost centres. This marks a significant shift for the in-house branch of the profession. In the 2007 FT ranking of in-house lawyers, only a handful of legal departments could claim to drive economic value for their companies.

Innovation for in-house lawyers is not just the preserve of those working in the high-tech industries. The ranking also include some value-driving initiatives from lawyers working for Nordea private banking in Finland and for Mercer, the insurance company.

However, one of the more startling examples of the power of pure legal innovation to create commercial opportunities comes from the London team at CME (Europe), the options and futures exchange. The lawyers were instrumental in creating a new cocoa futures trading contract denominated in euros. Their work did not stop at winning regulatory approval. The lawyers also realised that there was a way to improve how physical cocoa warrants moved between parties trading on the exchange. The solution was simple and straightforward but had never been done before. Instead of using a third party or a bank, CME uses space in its own office to print off the warrants once a sale had been concluded without compromising the integrity of the legal transfer process for the cocoa. This new in-house depositary system and warrant management process has ramifications for other CME product lines and has the potential to change current practices in this niche but global market.

Proactive: Dan Fitz leads the BT Group legal function

The 2015 winning team shows how a mainstream corporate legal function can excel at in-house innovation. Given a directive to cut its budget by 5 per cent every year, BT Group’s legal function took a sweeping approach to improving its services to the business while cutting costs. It took a leaf out of fellow corporate functions and set up BT Law, its own limited liability claims management business that now generates £5m in revenues, acting for BT and other clients.

The legal function at BT Group incorporates many of the significant developments of the legal profession of the past 10 years. Dan Fitz, group general counsel and company secretary, says: “We have a comprehensive legal services business here and my role is very much to lead and manage it.” The BT Group function is an entire legal business that fields specialist lawyers and works with top law firms. It is itself a proactive in-house adviser to BT on risk and strategy, has its own alternative business structure in BT Law, and has integrated disruptive suppliers such as Axiom into the department’s everyday work. It shows the value of necessity as a spur to innovation.

Individual in-house lawyers

Matthew Owens, Winner
Global head legal, strategic partnerships and digital medicine, Novartis Pharmaceuticals
Mr Owens plays a critical role in forging relationships with technology partners to turn Novartis’s vision of digital medicines into a reality. He is changing attitudes in the industry to embrace a way of working that does not focus on ownership of intellectual property.

Tom Brown
Head of legal UK & Ireland, PayPal UK
By encouraging his team to lead products from inception to market, Mr Brown has turned his lawyers into business leaders and project managers. He has had direct input into building the UK business and creating value in the company.

Nick Maltby
General counsel and company secretary, Genomics England
Part of the team set up to deliver the sequencing of 100,000 genomes by 2017, Mr Maltby is shaking up the UK’s approach to health. In his legal role he is forging partnerships, pricing outputs and aiming to enhance the company’s capability.

Lisa Tolaini
Chief legal counsel UK, Mercer
Ms Tolaini implemented a programme to enable the legal department to assist in Mercer’s expansion. Initiatives include an internal contract management system, setting up risk registers and an overhaul of relationships with outside counsel.

Sakari Wuolijoki
Chief legal counsel, Nordea Private Banking
Mr Wuolijoki helped create a wealth planning service. By combining that with an overhaul of the legal operation, he has transformed the team of lawyers into business partners.

Mohsin Zaidi
General counsel, Pride in London
Mr Zaidi, Pride’s first in-house counsel put in place the structure needed to bring the breathe new life into the organisation. A full-time solicitor at Linklaters, he shows exceptional commitment in this voluntary position.

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