Daniel Szeszler is the Group Legal Director of Magyar Telekom. His first role after graduating from law school was with White & Case Budapest, where he focused primarily on disputes and regulatory matters. His tenure with the firm was interrupted to carry out an LLM at University College London and an internship with the ICC International Court of Arbitration (Paris). In 2010, Szeszler joined Magyar Telekom in a senior expert role where he was soon exposed to “very stimulating matters, including an out-of-court settlement with U.S. government agencies over FCPA investigations relating to Telekom and a lawsuit against the Hungarian telecoms regulator over the market entry of a new, state-owned mobile operator.” In January 2013 he took on the role of Head of General Legal Department – one of the then three legal departments at Magyar Telekom – and was appointed the Group Legal Director effective July 2014.
Magyar Telekom was the first company with which you took up an in-house role. Did the company itself play a part in your decision to move in-house or did you simply decide it was time to work in-house?
D.Sz.: After five years in private practice, I was striving to do something different. You know, in private practice, you rarely have the opportunity to see the big picture. In contrast, if you step closer to the business and go in-house, your job consists of more than merely advising business decisions: you are often an integral part of the decision making process. I thought I would enjoy this working style more and I have not been disappointed.
The opportunity I got from Magyar Telekom came at the perfect moment and was simply unrefusable. I got the chance to work with the top management of a company which operates in a number of exciting markets: mobile and fixed-line telecommunications in all customer segments, IT, media, energy retail, and other distinct fields such as e-health or e-payment solutions. This company is huge, diverse and inspiring, and it allows you to learn, to grow, and to show off your talent. Telekom has invested EUR 8 billion in Hungary through the past twenty years, serves nine million customers and employs over twelve thousand people. It is a majority shareholding of Deutsche Telekom Group but is a publicly-listed company. It has several subsidiaries abroad and in Hungary, including Origo, a major media company and T-Systems, a leading provider of B2B ICT services. I guess all this explains why accepting a job offer from such a stimulating company was a no-brainer.
In July 2014, you took on the role of Group Legal Director. How is the role different and what new responsibilities did you take on from your previous role?
D.Sz.: As the head of the department, I managed a team of six, responsible for procurement/contracting, real estate, commercial litigation, and a number of other areas. As the Group Legal Director, I am responsible for all legal work of the company (except for labor law). In addition to the topics I just mentioned, our service portfolio includes supporting all of the company’s product development, marketing, and sales activities, providing sector-specific legal advice concerning all of our markets, as well as advisory in corporate and M&A, internal regulations, and privacy.
Do you report to the local board of Magyar Telekom or to the GC of Deutsche Telekom? When interacting with your Board Members, how do you find it is most efficient to communicate potential legal risks?
D.Sz.: I report to Magyar Telekom’s Chief Legal and Corporate Affairs Officer, who is a member of our Management Committee.
There are a number of ways to communicate about legal risks and any available mitigation possibilities. On the formal side, I have to pre-approve any decision our Management Committee takes, a process that gives me and my team the opportunity to review all management-level decision materials and signal any risks relating to proposed decisions. Yet I find the in-house lawyers’ informal, everyday consultative role to be even more crucial. This role is best fulfilled if the working relationship between business and legal is open and builds on trust and mutual acknowledgment of common goals. Legal must go beyond signaling risks. We must be able to think together with the business and to be valued partners, to be engaged in joint efforts to arrive at solutions where business goals are best fulfilled while legal risks are mitigated to the extent possible. This requires the ability to listen to and – more importantly – to actually hear each other.
How is your legal team structured? Do you tend to specialize your team members or try to rotate them?
D.Sz.: We have two legal departments within the Group Legal Directorate. The Service Support Legal Department advises Telekom’s customer-facing units. This team deals with all business and product development, marketing, and sales activities in all relevant industries where we operate. The Corporate Governance and General Legal Department is responsible for all other legal activities, including M&A, corporate, internal regulations, procurement, real estate, and commercial disputes. Data privacy, as a separate function, reports directly to me.
Most of our lawyers are specialists in their respective fields. There is very limited room for rotation; therefore, my lawyers often work as teams and consult one another, while one specific colleague often acts as a one-stop shop to our internal clients.
Do you have dedicated compliance/regulatory departments, or are these functions integrated in your legal team? Do you supervise them directly, or do they have different reporting lines?
D.Sz.: Both are distinct functions, independent from Legal. Traditionally, Regulatory has been a separate unit within the organization (Magyar Telekom operates in a highly regulated industry). The Regulatory Directorate is our key interface to legislative and government bodies. Compliance, on the other hand, is an independent control-and-advising function reporting to the Audit Committee of the Company.
When you do decide to outsource legal work, what are the main criteria you use in picking the firm(s) you will be working with?
D.Sz.: In Hungary, there are so many excellent lawyers and firms that making a choice is often quite tough. The most important factors influencing our decision are professional credibility, track record, and specialized knowledge in the relevant practice areas and sectors. If we have good experience with a particular lawyer or firm, we of course like to engage them over and over again. On the other hand, I have to say we are extremely price sensitive.
We do have a pool of around ten major Hungarian law firms whom we regularly work with, but we occasionally engage firms beyond this pool. As a general rule, we pick external lawyers for any specific engagement through highly selective procurement tenders.
What challenges do you expect to face during the next year or so?
D.Sz.: There are a number of internal and external challenges impacting our work. Magyar Telekom recently announced sizeable headcount cuts to be implemented by the end of this year. Not surprisingly, these cuts hit the legal team quite hard. At the same time, the ever-accelerating and vibrant market environment in which we operate requires the legal team to be more and more adaptive, innovative,and responsive. This tension between diminishing resources and rising bars urges us to rethink who we are and how we operate. We as the legal function are working on our new identity, our revised vision, and our modus operandi. I and my heads of department have to find novel ways to motivate our teams and to make our colleagues see the glass half full rather than half empty. Naturally, this change-management process is challenging, and requires patience and persistence for all those involved.
At the same time, we as a company face a number of challenges which of course greatly impact the legal function. There is a clear global trend of integration and market consolidation in telecommunications. In Hungary, a new player is about to enter the mobile market. Telekom is engaged in intense fixed-line and mobile infrastructure development. New products and innovative solutions are being developed on existing technology platforms. These trends of course have a clear impact on the legal function. On another note, legislation in Hungary has been quite unpredictable lately; based on experience over the last few years, we must be able to move fast, to interpret and implement radically new legislation and adjust our corporate processes and practices over surprisingly short periods of time.
On the lighter side, when you get a chance to get out of the city for a weekend get-away, what’s your favorite destination and why?
D.Sz.: When I have a long weekend, I enjoy visiting European cities. My ever favorites are the two cities I used to live in: Paris and London. Of course I also like to target new destinations to diversify my “portfolio” of life experiences: last year I visited Istanbul, this year I may easily spend a few days in Oslo for instance. On “regular” weekends I often drive to Lake Balaton to spend a few days at a nearby wine hill or to go sailing with friends and family.
What about when you don’t get the opportunity to escape the city?
D.Sz.: I am a big theatre fan and I go to see movies at least twice a month. During the last year or so I took up regular physical exercise again. For instance, I do Kangoo Jumps, which is a real endorphin booster and perfect way to let off steam. Also, when the weather is nice, I like to run; a great personal challenge this year will be my first half marathon, which I plan to run at the annual Telekom Vivicitta race in April.
This Article was originally published in Issue 2.1. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
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