In-house interview: David Taylor, Pension Protection Fund

When general counsel David Taylor joined the Pension Protection Fund (PPF) in 2005 the organisation contained four legal professionals. Some 11 years on the team has grown to 15 and plays an integral role in a business that controls £23bn of assets.

The PPF was created in 2005 to protect people with defined benefit pension schemes in the event that their employer should go bust and leave their scheme underfunded.

In recent years companies have moved away from offering their employees final salary pension schemes, but there are still around 12 million people in the country who have defined benefits pensions.

If a company does fail the PPF takes over its pensions scheme and in the majority of cases pays out compensation to those workers affected. Since its creation the public sector organisation has worked on a number of high-profile schemes including those at MG Rover and Woolworths.

In Taylor’s words, the PPF acts as “the pensions lifeboat”.

A team for “a creature of statute”

Taylor also describes the PPF as a “creature of statute”, as it was formed after the introduction of the Pensions Act 2004. As a result of this the PPF’s legal team has a fundamental role in the organisation. It is split into sub-teams specialising in various aspects of the business, such as pure real estate or investments. However, Taylor understands the importance of each lawyer having some knowledge of areas beyond their specialism.

“We’re encouraging people to broaden their skill sets,” says Taylor. “I suspect it’s something every legal team has to wrestle with. On the one hand you want to give your internal clients a personalised service and make sure you have some people on point but on the other hand you want the lawyers to have as broad experience as possible and be able to be flexible when needed.

“We’re cross-skilling our lawyers to make sure that they can help with anything that’s thrown at them.”

Training is integral to structure

Head of legal Dana Grey is in charge of the internal training programme, which has become integral to the way the legal team is structured. Training is carried out in a variety of ways including formal training sessions, knowledge-sharing exercises and work shadowing. The PPF also asks its external advisers to carry out training sessions with the in-house team.

Lawyers are encouraged to carry out work outside their normal specialist area. Although this can mean the work sometimes takes longer to carry out than would otherwise be the case, the organisation takes this into consideration when allocating a timescale for each piece of work.

This system means training can be carried out without being rushed, allowing lawyers to fully understand the issues they are dealing with.

Despite the PPF being a public sector organisation Taylor looks to run his team as if they were working in a competitive business environment.

“We often talk about the fact that we, as an organisation, try to combine a public sector ethos with private sector efficiency, so what we’re doing is clearly useful to society,” says Taylor. “At the same time, the quality and interest of the work we do is every bit as high as it is in the places we’ve all come from.”

“We try to combine a public sector ethos of doing something useful for society with private sector efficiency”

The in-house legal team is such an integral part of the PPF that Taylor has been appointed to the organisation’s main board as an executive member. As a result, his responsibilities have expanded to include business strategy as well as the running of the organisation’s levy, which is the main way it is funded.

Sitting in such a prominent position within the organisation, Taylor is able to increase his own knowledge so that he can improve the advice he provides.

His position on the board also serves the company and allows him to steer the business based on the risks that present themselves during its running.

Despite the legal team’s close working relationship with the business the legal team does not sit within other departments. Instead, Taylor chooses to have it sit independently as a separate division.

“A question that in-house legal teams often wrestle with is: should we be a single team or should we be embedded within the business?” explains Taylor. “We’ve always stuck to the ‘single team’ model. So we basically have 15 people sitting and working together and being able to share expertise and know-how, but also going out and getting involved in the day-to-day activities of the organisation.”

Secondments

The PPF uses a large number of firms to carry out its external legal work.

According to Lawyer Market Intelligence, PPF runs a core legal panel along with an insolvency and corporate panel, a specialist and reserve panel, and an assessment period panel.

Across these four rosters the PPF employs 26 firms for its external advice including Addleshaw Goddard, Allen & Overy, Clyde & Co and Nabarro. As part of its arrangement with external firms the PPF has a tradition of requesting that its advisers provide secondees to work alongside the in-house team.

“We’ve had a successful secondment programme since we started,” says Taylor, “which, as you can imagine, started on a fairly ad hoc basis. We found it worked well for us in terms of getting good people in, as firms tend to send you their good people.

“More recently, we’ve formalised the secondment programme and asked for it as part of our panel process. So people are asked, as part of getting on the panel, to supply secondees from time to time.”

Secondees usually spend six months in-house and Taylor believes this is the minimum amount of time it takes to understand the business due to its complicated nature. Although, this means that the law firm has to lose one of its lawyers for at least six months, the secondees on their return are able to provide an extra level of insight into how the PPF operates.

All the PPF’s legal panels are due to be reviewed this year so if law firms are interested in winning a spot they may be forced to lose a talented lawyer for six months.