LEGAL DIRECTOR (UK): Ready for change: “Speaking to Legal Week, Shell head of legal, Beat Hess, said that since the reserves crisis in April this year, the majority of changes he wanted to make to improve the position of lawyers within the company have now been made.”: The crisis will, however, have given the proposed reforms added impetus, given Shell’s public recognition in the wake of the scandal that its in-house lawyers needed a higher profile within the company.”: “UK head of legal Richard Wiseman said the corporate restructuring would only have a "small effect" on the company’s UK legal department as Hess was already based in The Hague along with the bulk of the company’s legal team.” (ShellNews.net) 11 Nov 04
In the wake of Shell’s historic decision to restructure, head of legal Beat Hess talks to Sophie Evans about the changes that have taken place in his team and the role his lawyers will play in the corporate shake-up
Shell’s top lawyer has finalised his shake-up of Shell’s giant legal team — well ahead of the largest corporate restructuring in Royal Dutch Shell’s history.
Speaking to Legal Week, Shell head of legal, Beat Hess, said that since the reserves crisis in April this year, the majority of changes he wanted to make to improve the position of lawyers within the company have now been made.
Hess had started his review of Shell’s in-house department when he succeeded Pieter Folmer as legal director to the group in June last year.
And his recommendations had already won the backing of Shell’s powerful committee for managing directors before the oil reserves crisis broke.
The crisis will, however, have given the proposed reforms added impetus, given Shell’s public recognition in the wake of the scandal that its in-house lawyers needed a higher profile within the company.
One headline reform is the appointment of senior in-house lawyers to the executive committees of the company’s various divisions, including exploration, production, gas and power.
For his part, Hess is present at all meetings of Shell’s main executive committee. He is also a member of Shell’s disclosure committee, a change that he said took place almost immediately after the reserves crisis.
"Being a member of this committee is part of a whole series of actions that have taken place to better position the legal function to give the right legal advice whenever it is needed," he said.
Hess has also been working on improving communications between all lawyers in the legal team around the world.
"Previously a lot of communication was limited to lawyers in Houston, London and The Hague. Communication to the entire legal community is very important to me, as is better dialogue," he said.
Hess said these changes — along with a drive to improve career development within the legal team — would help pave the way for the restructuring.
"We have prepared our new group structure and are well prepared to fit into the new company structure," he said. "There will not be any more significant changes."
Indeed, Shell’s legal team has been playing a key role in the formulation and implementation of the oil giant’s restructuring.
The shake-up was announced at the end of October when Shell pledged to unify its British and Dutch boards, as well as merge the two separately quoted companies of the oil giant, Royal Dutch and Shell Transport & Trading.
Hess has instructed a trio of firms to advise on the restructuring: Slaughter and May, Dutch leader De Brauw Blackstone Westbroek and top New York firm Cravath Swaine & Moore.
The deal is valued at about Ł100bn, making it one of the UK’s largest ever transactions. Hess said much of the legal work for the transaction was being done in-house — while the bulk of the work associated with implementing the changes would be done by Shell’s legal team. He said he expected all the changes to be approved by shareholders at an ordinary general meeting scheduled for April 2005.
"We hope to be ready by then; it is an organisational challenge, and we have defined the specific work streams to deal with this," Hess said.
Once this major cross-border merger is complete, the company is expected to move its headquarters from London to the Netherlands, while keeping its primary listing in London.
The past year has seen significant numbers of the Shell legal team, which numbers more than 600-worldwide, move to The Hague.
Hess said he did not expect any more major transfers of London-based lawyers to the Netherlands, although he could not rule out a small number of lawyers relocating to The Hague.
He added: "I would say this is substantially done. There may be one or two changes, but I do not expect any significant number of London lawyers will move."
UK head of legal Richard Wiseman said the corporate restructuring would only have a "small effect" on the company’s UK legal department as Hess was already based in The Hague along with the bulk of the company’s legal team.
While the final committee structure of the merged company has not been put in place, Hess says he is confident the re-positioning of the legal team means he will have access to a committee’s work "whenever I think it is advisable or appropriate. I do not see any barriers in the way".
"I think that the structure of the entire function is pretty much in place — there may be minor adjustments here and there, but I am confident with the changes," he said.
Author: Sophie Evans
Source: Legal Director