Ferdinand Trauttenberg has been the Head of Legal at .A.S.A. Abfall Service since November 2014. Prior to joining .A.S.A. Abfall he was Head of Legal – M&A at Raiffeisen Centrobank between May 2012 and December 2014, and Head of Legal and Compliance at Raiffeisen Investment for almost a year and a half. Earlier experience included working as the General Counsel of Welser Profile.
You mentioned to us that you love working as in-house counsel for an industrial company. Why is that?
F.T.: After graduating from law school in Salzburg, I started my career with DLA Piper. After a couple of months I pursued my desire to work in an industrial company (I wanted to be close to production) and spent about five years in the automotive industry. I spent some time working for a steel profiling business, during which time I also passed my MBA and after which I joined the Raiffeisen Group, where I worked primarily on the M&A side but ended up returning to my original “love” of working for an industrial company. I just think you cannot beat the feeling of actually seeing the end product towards which you are advising internal clients.
You have spent almost your entire career working as an in-house lawyer. Was the idea of working in private practice ever attractive?
F.T.: Indeed, I only worked briefly for DLA Piper and after a very short time I moved out of the private practice world. I have remained on this side since – and never looked back – because I found it to be far more challenging to be a part of the full production cycle of a company rather than acting as a pure advisor.
Why was that?
F.T.: For me, the interaction with all the different departments and different people made the real difference. You need to be able to interact with both, with management at all levels as well as all the different functions of the company, which means you need to cover a very broad base of drivers, and I always enjoyed and found it challenging to have to merge both the legal side and the business/commercial side of things.
I see this even in my approach in managing the legal function. When we hire someone in-house, it is important for me that any lawyer we bring on has a certain commercial/industrial knowledge and affinity, whereas in the cases where I retain external counsel, I tend to look a lot more for some form of specialization. It is true that, in today’s legal world, any lawyer from a law firm expecting a mandate needs to know the industry he/she is pitching, but specialized knowledge is still key.
You mentioned you graduated from an MBA program. How do you find such a degree adds value to an in-house counsel?
F.T.: I think it influenced my approach and sharpened my knowledge and personality to handle the daily business. As a lawyer I was trained to focus on detecting and mitigating risks, but with an MBA and the strategic exposure it offers, you get a broad understanding of what is needed in a company – meaning you can understand the different needs and the broader context of the other functions, and it makes you a bit more solutions-focused rather than only seeing things from a legal perspective. I think the latter in particular is critical since, in a daily business setting, it’s not just about the risks incurred but possible solutions to issues faced. I think it is important to understand the bigger picture, and an MBA offers that insight.
You are currently responsible for legal matters in eight jurisdictions. Did you opt to hire local in-house counsel outside of Austria or rely on external counsel?
F.T.: Within the group we’ve used both solutions. In some ways, that is related to the history of the company. In others it is linked to specifics on the ground.
For example, in Bulgaria, we acquired the company approximately seven years ago and decided to keep the counsel both out of a desire to keep the existing expertise and because it made sense from a budgeting perspective. In Serbia, the specific legal framework, related to providing services to individual households, pushed us into needing an in-house lawyer simply because of the regular workload. The Czech Republic counsel was one we hired after my joining. The rationale in that case stemmed from the fact that when I first joined the company, one of my initial duties was to analyze the external legal costs in each country. The Czech Republic (which is the biggest operation in our group) seemed to have rather high costs. At the same time, we figured out that a lot of expenses were used for basic general and corporate legal work (such as contracts or other standard corporate procedures), so we decided we could cover all these internally. Of course, there is a cost incurred in hiring an employee as well but aside from lowering costs overall, the flexibility of having a dedicated in-house counsel was also weighed.
What about the other four countries – what was different there that made you stick with external support only?
F.T.: In Poland and Slovakia for example we found that the legal work executed by external firms ended up being very efficient from a cost side. We use a mixture of global and local law firms and lawyers and they also use a lot of templates for corporate work in place, which kept costs below the needed threshold for us. At the same time, the feeling that we have reliable external counsel that know us and our needs well was also factored in when opting to continue to rely on external counsel only. There was also a logistical factor. Slovakia is not far from Vienna, meaning I can easily coordinate lawyers there.
In your experience, what are the pros and cons of the two approaches?
F.T.: As I mentioned, it is a cost factor of course to even have someone on the payroll but, if you take a lot of external work, it balances out.
Another distinction is that, if you hire an in-house counsel, you will likely not hire a specialist – rather a generalist who will be able to handle most small matters that pop up. This offers great flexibility within the company not just in terms of addressing issues as they arise but also because it offers a “sparring partner” for management which makes their lives a lot easier in terms of pushing the business forward while mitigating risks.
Of course, that’s a double-edged sword, since the lack of specialization does mean that you still depend on external advisors on specific/more complex issues.
How do you ensure quality control over the work executed by firms in jurisdictions where you are not qualified?
F.T.: It is indeed difficult at times and there are situations (especially in more complex or higher risk projects) where we work with more than one firm and thus have two opinions if needed. There are plenty of situations however where we only work with one firm, but I think it comes down to building relationships of trust and relying on your selected counsel – otherwise, why select them to work with?
Does the professional liability insurance policy matter to you – do you ask about its coverage?
F.T.: For bigger projects, yes, definitely. For smaller/less important ones it is of course less important.
What best practices have you developed in terms of managing a virtual team? How do you communicate and coordinate on ongoing matters?
F.T.: For me it is important, besides writing e-mails and asking for reports, to use the phone. It’s rather irregular – once or even a couple of times a week – but I do need to talk with my team live.
Face-to-face time is also critical, and I make sure I go to every country to meet the people and discuss how to coordinate best, how to structure our communications.
As I mentioned, this is fairly unstructured – we don’t have a “formal call set up every Friday” type of approach, but I do think that personal touch is needed to be able to liaise well on an ongoing basis – not just when issues come up.
When you will be looking to hire new local in-house counsels, what are the main attributes you will look for in candidates?
F.T.: Similar to what I described earlier, a business approach is critical but I think it will always comes down to experience and technical knowledge. If they come from private practice, I will be on the lookout as to whether he or she has specialized, and has experience in, fields that are relevant to our industry.
How do you find it easier to assess these?
F.T.: When it comes down to an interview it really is more of a matter of having a free discussion and talk about various scenarios and situations and see how the candidate approaches different situations by taking into consideration not only legal aspects. A free-flowing talk also allows me to get to know them and assess the critical aspect of their communication skills and the overall chemistry – which is always subjective of course.
In the jurisdictions where you rely on external counsel only, do you have a steady firm/set of firms you work with or do you pick them on a case-by-case basis? What are the criteria you use in selecting which firms you will be working with?
F.T.: We do work with several local firms on an ongoing basis. Since in some countries we do not operate in the capital we are therefore not in the position to have the legal support of international law firms. However I do find that, in most situations, local counsels are more than capable of providing excellent advice. The one thing that I do make sure happens is a personal meeting with all we will be working with on an ongoing basis.
The other aspect I am keen in seeing from the lawyers I will work with – and this is applicable in all instances, not just where we do not have in-house counsel – is an ability to provide a quick “hands-on” approach in terms of offering answers. I like the ability of simply calling up a lawyer, run them through the issue at hand, and get a broad quick answer. Of course, for complex projects that is not expected, but I do prefer quick advice where possible over a full brief of hundreds of lines hours later.
This Article was originally published in Issue 2.4. 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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