About

Team size: 330

Major legal advisers: Allen & Overy, Bryan Cave Leighton Paisner, CMS Cameron McKenna Nabarro Olswang, DWF, Freshfields Bruckhaus Deringer

The in-house legal department at BT has been through a seismic shake-up over the past two years. First, group GC Sabine Chalmers joined from Anheuser-Busch InBev in April 2018, replacing the widely-admired Dan Fitz. Then, the leadership team was restructured to mirror the shape of the wider business before, finally, a high-profile managed services deal with newly-listed law firm DWF was unveiled.

The result has been a rejigged structure that frees up its lawyers for strategic work – 84% of low-value deals were managed by a legal process outsourcing team of 34 in Belfast and Wroclaw – and a 10% reduction in the total cost of legal for 2018/19 to about £70m. A team of 43 covering insurance and real estate work also switched to DWF on that five-year, multimillion-pound managed legal services arrangement.

The changes happened in two stages. GC reports were lined up with each of the business and corporate units: GC of corporate, Bruce Breckenridge; GC of technology, Chris Fowler; the GCs of each of the business units: consumer, Russell Johnstone; enterprise, Jeff Langlands; global, Liz Walker; Openreach, Nigel Cheek; company secretary Rachel Canham; and director of transformation, Dave Hart. Fowler had served as head of operations alongside his day job until Hart was promoted from litigation in 2019, following the completion of the DWF deal.

‘Phase two is working with the leadership team and their direct reports to further align the strategic priorities for the function and the business and how we want to deliver them,’ Chalmers comments. ‘There were a number of areas core to business in which we definitely require deep internal expertise and business partnerships. Then there are other areas that are less bespoke where a better way to deliver services and build careers for the talent involved, and take advantage of technology and best practices across different industries, was to partner with someone like DWF.’

Fowler was tasked with finding the right partner for the managed services deal and began by establishing the overall cost of BT’s function – there is just one budget for legal now, whereas as recently as 2017 there were six. BT also surveyed its internal customers at the executive committee, from which the feedback suggested legal’s accountabilities needed to be clearer and the service model consistent.

The path to DWF took at least a year, assessing 26 potential providers before being whittled down to a shortlist of four. That included traditional law firms, New Law players and the legal arms of the Big Four accounting firms, as well as ‘consortium’ approaches between providers playing in each of those fields.

‘We spent a good part of 2018 engaging with people and understanding what it is they could offer, what they had now and where they were going,’ Fowler comments. ‘The biggest change we noticed was how certain firms engaged with us. Some were clearly embracing this as part of their strategy and some clearly weren’t, but what was most encouraging for me was that firms had clearly worked out they needed to modify and change their offerings.’

While still early days, Fowler says taking the time to properly establish the baseline cost data and the importance of constant communication are two of the key lessons he has learned: ‘You can’t flirt with managed services, it’s a long-term relationship.’

All of this has been led by changes in the wider business. In May 2018, BT announced plans to cut about 13,000 jobs over the next three years in a bid to save £1.5bn in costs. Then, a month later, chief executive Gavin Patterson surprisingly resigned after five years in the top job. His replacement, Worldpay’s former co-head of payment processing, Philip Jansen, took over in 2019.

Hart now leads a team of 15 tasked with building on Fowler’s foundation and dedicating full-time resource to the ‘transformation agenda’: the evolving opportunities for the function being brought by technology and alternative service providers, talent retention and management, and managing budgets. Having tidied in-house, a full panel review is the next order of business.

‘BT is in a constant state of change and probably will be for some time to come,’ Hart comments. ‘With that in mind, having somebody who is dedicated to helping manage that change and ensure the legal function has the right operating model and systems to be able to keep up with the changing demands of the business is now a full-time role.’