Insider view – Interview with Dan Fitz, General Counsel at BT
In our latest blog we speak to Dan Fitz of BT Group. As Group General Counsel and Company Secretary, Dan is no stranger to innovating and talks to us about doing more for less, the issues arising from the traditional law firm model and his plans to develop BT Law, the ABS launched by the Group in 2013.
How are you driving value for BT Group through the legal team?
For over four years we have been moving our lawyers up the value chain by utilising their skills in-house on higher risk and greater value work. For lower risk and lesser value work we outsource to a Legal Process Outsourcer. From 1st February this year, our LPO provider is Axiom. This arrangement is also valuable when we have unexpected peaks, allowing us extra support when needed at a variable cost.
For more complex work we also bring in a number of trusted partners, like Halebury, who give us flexible resourcing coupled with impeccable commercial credentials. We get comfort from the fact that many of their lawyers have worked in-house and Halebury’s real USP is that they know the corporate environment. They offer highly experienced and flexible lawyers without the high overhead costs.
You reengineered your law firm relationships, what did you do and why?
As no one firm can cover all jurisdictions and matters, we moved from a global legal panel to maintaining regional relationships with firms. Instead of dictating from London which providers should be used around the globe, we found that our local regional lawyers have a far better sense of who will serve our local needs best.
What do you look for in a law firm?
You can take it as read that we expect quality, integrity, diversity and inclusion. We also like firms that are willing to sit down with us to discuss innovation and new ways of working. After all, you don’t just engage the firm, you engage the people. Chemistry is very important and our legal services providers have to relate to all of our people, from our sales managers, to the legal team, right up to the CEO.
Fast-forward five years; how do you think law firms will have changed?
The trend for new entrants will continue. There is no reason why you need a law firm to carry out many of the tasks that traditional firms have previously carried out. This represents a big threat for small and medium sized firms. The partnership model and ensuing costs base make it difficult for them to copy new entrants. Those firms need to place an increased focus on quality and look much more widely at the way their whole business is run, including the number of trainees they hire. The reality is that they may no longer need the number of trainees they once did if they move away from lower value work. There will always be demand for the services the top firms provide for bet-the-company matters.
When you talk to other General Counsel, what is the consensus about how law firms are innovating?
Speaking specifically about the US/UK markets, the consensus is that legal services are innovating rapidly and that law firms are finding it difficult to capitalise.
In defence of law firms, it certainly is not a question of will. They’re often constrained in their options by the traditional law firm economic model. However, assumptions are slowly changing; just as Rome wasn’t built in a day, it’s important to note that it too will take time for firms to evolve and adapt.
Quality firms won’t have a problem and it is good to see some firm’s experimenting. However, no one really knows what will happen or what success will look like in the future. I think we all agree that it’s a disruptive time for the provision of legal services but also a very exciting time.
You received your Alternative Business Structure (ABS) licence last year, how is that going and what future plans do you have?
BT Law Limited is in its infancy. It handles small tort claims arising from visits by our 30,000 engineers – mainly bumps, scrapes and breakages. The majority of claims are handled by highly experienced tort claims handlers (often recruited from customer services), managed by a team of three solicitors, and so know exactly how to deal well with people. As a result the claims are now concluded far more quickly.
Other businesses have also shown an interest in this service, so we are now offering this as a B2B service for others. Already we have a handful of medium sized businesses on board and are tendering to a number of larger businesses.
We’re also beta testing how we can use our excellent employment law team and all the experience they have in handling tribunal work, counselling senior managers and dealing with a wide range of complex HR issues. There are lots of businesses that could benefit from expert help of this nature but which may not be able to afford their own in-house provision, so we think there is potential here too. Our philosophy is that as long as the risk and potential liabilities aren’t too high then we’ll give it a try and see what happens.
What will be the single biggest challenge for you in 2014?
It might sound clichéd but it will be continuing to do more with less. We may be coming out of a recession but there is an expectation that the cost disciplines enforced on us during these stringent times will continue.