Penny Dudley
BUPA
Team size: 174
Major law firms used: Herbert Smith Freehills, Slaughter and May, White & Case
‘There is now a broader role for legal risk management.’
International healthcare company Bupa had a busy year for M&A in 2018. The company sold 22 of its UK care homes to Advinia Healthcare; disposed of its medical alarms business, and sold 12 care homes and four retirement villages in New Zealand; and made key acquisitions of a fertility business in Spain and insurance business in Turkey.
But for chief legal officer Penny Dudley, appointed to the top legal role in April 2016, M&A was far from her legal team’s main focus. She leads an in-house function across 13 countries, with the largest parts of the team in the UK, Australia and Spain. The team is organised against each of Bupa’s four main geographies, reporting to Dudley and the chief executive of each region, while a privacy function was also added with the appointment of group data protection and privacy director Heike Norris in May 2017.
One of her key objectives is ensuring her team is working effectively with other functions in the group, such as compliance and corporate affairs, particularly in areas like brand and reputation. She also wants her lawyers to broaden out their experience through exposure to other functions and skillsets. ‘There is now a broader role for legal risk management,’ she comments. ‘It requires considering risk through a reputational lens, so along with “can we do something?”, also asking “should we do it?”’
Sean Roberts
GSK CONSUMER HEALTHCARE
Team size: 55
Major law firms used: Addleshaw Goddard, Allen & Overy, Baker McKenzie, Bird & Bird, CMS Cameron McKenna Nabarro Olswang, Kirkland & Ellis, Simmons & Simmons, Slaughter and May
‘We’re not going to be relevant if we don’t learn about the digital space.’
At the end of 2018, GlaxoSmithKline (GSK) and Pfizer announced a global joint venture that will, subject to regulatory clearances, create the world’s largest over-the-counter medicines company. The agreement sees the pair combine their consumer health businesses, with GSK retaining a 68% interest in the company, with an estimated annual turnover of £9.8bn.
The deal is expected to complete in the second half of 2019. Within three years of closing the transaction, GSK intends to separate the joint venture via a demerger of its equity interest and a listing of GSK Consumer Healthcare on the London Stock Exchange, separating it from its pharmaceuticals and vaccines businesses. It comes a few years after GSK and Novartis combined their consumer units as part of a major three-stage transaction that ultimately saw GSK buy Novartis’s 36.5% stake for $13bn in May 2018.
All that makes for a phenomenally busy year for general counsel Sean Roberts and his 55-strong team. Roberts led on the due diligence over a short four-week time frame, with Slaughter and May and Kirkland & Ellis advising the company. Roberts’ division has dedicated legal staff but can also access the wider GSK team – which is about 650-strong globally – in areas such as litigation. The Pfizer deal will most likely mean a bigger, standalone legal function will need to be created within consumer healthcare, however, before any demerger takes place.
‘I have a genuine excitement about this deal, which is ultimately designed to create two world-class companies. We have a unique opportunity to shape a future standalone company in line with the values we want to bring to it, but without any doubt, the focus at the moment is on integrating and delivering the Pfizer business.’
Roberts’ team has been at the forefront of training initiatives within the business, dubbed the ‘Digital Academy’, to upskill its lawyers. The academy began in the consumer healthcare division a couple of years ago but has since expanded to the wider GSK enterprise. ‘As I said two years ago, in three years we’re not going to be relevant practitioners if we don’t learn about the digital space. The academy has made a difference, but you never learn as much as when you do the work itself, so most of the learning is on the job.’
Simon Farrant
JOHNSON MATTHEY
Team size: 120
Major law firms used: Baker McKenzie, Herbert Smith Freehills
Simon Farrant at Johnson Matthey is described as an ‘under the radar’ GC. ‘He’s forward thinking and championed flexible working in his team long before it was fashionable to do so,’ says Stephen Wilkinson, a partner at Herbert Smith Freehills.
Farrant’s legal career has been largely shaped by the 25 years he has spent at Johnson Matthey: ‘I joined the business in 1994 as senior legal adviser, but I’ve known Johnson Matthey since the late 1980s – they were a client when I worked at Taylor Wessing.’
Over the last two and a half decades, Farrant has helped steer the company through several major shifts in its focus from former businesses in gold and silver refining, ceramics materials and electronic materials to producing emissions control technologies, catalyst technologies and pharmaceutical materials.
Farrant has grown a substantial global legal team, which includes approximately 60 lawyers and teams in ethics and compliance, intellectual property and company secretarial work. Instilling best practice around health and safety procedures in the workplace is a priority for a large company. ‘[Our] employees sometimes do dangerous work on manufacturing processes, so we all play a role in creating a culture where people can speak out if there’s a problem, even if it halts production,’ Farrant says.
The legal team also spends a fair amount of time protecting the company’s intellectual property, while an important market the company has evolved into in recent years is clean air and emissions control technologies. ‘There is regulatory guidance to be observed here because Johnson Matthey and others in the market are trying to provide solutions to meeting emissions standards, which are mandated by legislation. I don’t do any lobbying myself but lobbying does go on in this area.’
Last year, Johnson Matthey sold its automotive battery systems business to power generation manufacturer Cummins, before the two formed a strategic partnership to develop battery technology. ‘My lawyers have to move quickly in this competitive market and the team has to be good to do business with. The company partners up a lot and we play our role in renewing and maintaining those partnerships.’
Daniel Toner
SPIRE HEALTHCARE
Team size: Ten
Major law firms used: CMS Cameron McKenna Nabarro Olswang, DAC Beachcroft, Freshfields Bruckhaus Deringer, Kennedys, Pinsent Masons, RPC, Wedlake Bell
‘What’s expected from GCs across all businesses is much greater than it used to be.’
Daniel Toner, GC of Spire Healthcare, features in the 2019 Powerlist after successfully battling increasing responsibilities and regulations. Toner, who joined Spire in 2007, has seen his role change significantly in recent years. Firstly, in 2014, the company listed on the London Stock Exchange, with the listing bringing an increased workload. As a result, he says ‘there’s obviously more investor relations involved, and my role is more meetings and governance’.
But in a trend not unique to Spire, Toner has also been forced to get to grips with an ever-rising wave of regulation, a force that has changed his industry. The healthcare sector used to rely much more on local cottage hospitals, but Toner notes: ‘It’s much more highly regulated now. As a lawyer, part of your role is to deal with any change in the business. It’s really interesting to reinvent yourself. What’s expected from GCs across all businesses is much greater than it used to be. But with great responsibility comes great reward.’
A point of pride for Toner is the way his team procures legal services. He describes them as ‘a reasonably sophisticated legal team from private practice’, who ‘know the market pretty well’. Rather than operating any kind of formal panel, the Spire legal function will go directly to a trusted individual when needed. ‘It’s horses for courses really.’
Despite noting the increasing sophistication of in-house legal, Toner is bullish about the size of his own team. With a modest ten lawyers, Toner is comfortable: ‘We have a good balance with our resources and we have reached our optimal point in terms of value for money.’
And, as for a return to private practice, he emphatically rules it out: ‘The money isn’t as good, but you can find the intellectual challenge if that’s what you’re into. I would certainly never do anything else.’