Paul Gillard's career includes international law, academia, private practice, and key in-house roles, including Telecom New Zealand during its privatisation, General Counsel at Fletcher Forests/Tenon, and Assistant Company Secretary at Genesis. As President of the New Zealand Corporate Lawyers Association in 1996 and Corporate Lawyer of the Year in 2005, his contributions to the legal profession are well-recognised.
As Paul approaches retirement, we had the privilege of speaking with him and celebrating a distinguished career that has been instrumental in shaping the in-house legal profession in Aotearoa, New Zealand.
Could you start by telling us about your early career experience and how it led you to your first in-house role?
I’ve been around for a while. I graduated in ’78 and then started out by gaining academic experience with the Law Faculty at Victoria University. I wanted to see if I could do it and if I liked it, but I quickly realised that it wasn’t for me, so I moved on. I followed that up with a couple of years at a Wellington commercial firm, dabbling in a variety of work and ended up working in a law firm in Washington, DC, when my father was a diplomat there. I was there during some historic events, like when President Reagan was shot, and I spent time working on Capitol Hill, which was a unique opportunity. I remember writing reports and talking to staffers about various issues—it was a great introduction to how law intersects with government and policy.
After my time in the U.S.A, I returned to New Zealand and joined a private practice firm in Wellington, where I eventually became a partner within about nine months. At the time, it felt like quite an achievement, but soon enough, I realised that I hated it. One of the main issues I faced was that I didn’t receive any formal training so I found myself in a situation where I was expected to perform at a very high level without guidance or support, and it became clear to me that this wasn’t sustainable for health reasons. I think you need to know when to call it quits and when it’s time to move on.
In 1989, I got a phone call from a headhunter asking if I would consider working for Telecom. Back then, in-house roles were mostly in government or SOEs and were regarded by people in private practice as very much second-rate work, very much looked down on. When I interviewed at Telecom, the then-CEO told me they were privatising and deregulating the telecommunications industry and putting everyone under the ESOP, the executive share ownership plan, which was pretty big. So I took a pay cut to move in-house, but I enjoyed my life a lot more. I didn’t have to work all night, even though it came with its own set of stresses. I would rely on outside lawyers to do the "hard yards". The pay definitely improved, but not to the stratospheric heights senior roles like that now enjoy!
Being a manager is very different. One of the struggles then, and throughout my career, was to try and avoid doing all the work myself because I am very much, as most lawyers are, a perfectionist and think everything has to be done perfectly. The temptation is to try and do it yourself, as opposed to, if you've got the budget, just paying for someone else to do it and checking their output.
What are some of the most significant moments in your career, and how did they shape your approach to your work?
Early on, proving that I could 'foot it' against Ivy League law prodigies in the USA.
Another moment was at Telecom, and I can talk about this because it's public now. Within three months of joining Telecom, I became aware that we were having some problems with the 111 service—calls were dropping out and people were getting a bit antsy about it. At the same time, I found out that we were having some problems with the “Everyday” phone, which was in use throughout the whole country because Telecom was a monopoly at that time. The manufacturer had crimped rather than soldered the wire correctly, so a small number of these phones would drop a call every now and then.
I put two and two together, and went to see the operations guy, the number two in the company. In those days, Telecom had thousands of employees, one of the biggest employers in New Zealand. I said, 'We’ve got to pull all these phones, we've got to do a full recall because someone’s going to die, someone’s house is going to burn down. We’re going to kill somebody. And you’re going to have to explain to the media why we knew about these phones and did nothing.'
He thought about it for a while and said, 'Yep, I agree. Tell me what we need to do.' We set it all up, and it was all fixed. But I had horrendous pressure from within the company not to do it. But they just couldn’t see what I could see. In other words, they weren’t taking a commercial and risk management approach.
Another significant moment was my work on the opportunity cost competition law policy. During, I think it might have been the first or second year of my employment at Telecom, they sent me off to Canada with a bunch of business people in the middle of winter to look at an acquisition. I remember sitting in my hotel room and I called up the lawyers and said, 'Send me some regulatory stuff to read; I’m bored stupid.' They sent me reports and right in the middle of one of the reports, in some obscure little place in the middle of nowhere, they were talking about this 'opportunity cost' regime. Opportunity cost is all about not giving up profit by letting someone else access your facility to resell it at a profit. In other words, what you should allow is for them to price and make a profit on the bit that they provide to the customer, not the bit that you provide. It’s just a way of looking at economics.
I came back and said, 'This is what we should do,' because we were in negotiations with a competitor interconnect company to provide access to our fixed wire network.
I got huge pushback from everybody, 'No, no, we can’t do that.' So I kicked up a big fuss.
In the end, they got some experts from the U.S. who said, 'Absolutely’. We also got expert legal opinions to back this up. This went all the way to the Privy Council, and we won it. It was huge and it set the initial framework for negotiating access to our network. It was worth hundreds of millions of dollars to the company. And it felt good because no one else was pushing it, only me.
How have you seen the role of in-house legal evolve over your career?
As I mentioned, when I joined Telecom, in-house roles were really regarded by people in private practice as very much second-rate kind of work, very much looked down upon, and in my opinion, some of those comments were quite true at the time. I think a lot of it was because in the early years, particularly because the commercial sector was, at the time, largely regulated, so all the senior roles tended to be in Government and Wellington, and they hadn’t had anybody training them properly.
What I’ve detected, particularly amongst the very large corporates, is a tendency to go for safety. For example, a very large corporate that’s been experiencing some issues might hire a senior partner out of a law firm as opposed to promoting in-house, so over time, the requirement to be absolutely on the top of your game to get a top job is becoming more and more important. Whereas going back 30-odd years or so when I went in-house, it probably wasn’t as important.
Now, you’ve got to be as good as the law firms you’re briefing to function well in the corporate environment, you need to know the answers. You can’t just dump it all on your outside law firm and walk away. You need to be on top of it.
What are some character-defining moments in your career, and what did you learn from them?
Working in the forestry sector with Fletcher Forests was a defining period. The company faced massive challenges, with half of its businesses in receivership. I was brought in to help clean up the mess. Fletcher Challenge had been the biggest company in New Zealand, and when it was split up, Fletcher Forests was one of the parts that had to be managed through a tough period. My job was to deal with the issues and help tidy things up. On my first day on the job, I had to help front a press conference where we announced one of the biggest corporate write-offs in NZ History. I was told I would be there for 18 months, and I ended up being the last person to turn out the lights 17 years later when, after selling off and returning all the company’s capital and all the company’s assets to the shareholders, I put the company into voluntary liquidation. It was a bittersweet moment, but I’m proud of the work I did to return value to the shareholders.
Another defining experience was during the global financial crisis of 2007-2008. The company I was working for at the time, was heavily invested in the U.S. housing DIY market, which was hit hard by the crisis. We faced years of declining revenues—same-store declines in revenue of 10% per annum, year after year, while our fixed costs more or less stayed the same. It was my job to help the company navigate through those tough times. I wasn’t as busy with other work during those years, so I told the board, 'You’re overpaying me, why don’t you just make me redundant, and I’ll go?' But they wanted to keep me on board because of my experience, so I stayed and balanced my role there with a part-time job as General Counsel for another smaller, listed company, which I only relinquished last month.
As you look ahead to retirement, any advice you’d like to pass on?
First and foremost, you have to maintain your integrity. There will be times when you’re under immense pressure to make decisions that might not sit right with you, but you have to stand up for what you believe is right. It’s easy for the in-house counsel to say yes to something when they shouldn’t or to simply ignore or let some important advice pass them by. And once you’ve done that, you’re history. You’ve set that precedent.
If you’re working for a big company and something goes wrong, you better make sure none of it sticks to you. If there’s an opportunity to blame the lawyer, 'they' will always blame the lawyer. Always. So, you need to balance the interests of yourself against the interests of the company. At the end of the day, you’re there to do a job, and you'd better make sure you do your job by the book. For example, if you’ve got a major court case, you'd better make sure you haul the KC in front of the board because if you don’t and you lose that case, you’re going to get blamed or, worse, fired.
You need to be tough when you’re the boss of an in-house legal department. When I was at Telecom, I had 30 lawyers, and I was told I had to reduce the department by 50%. So, you’ve got to make the hard decisions. If someone’s not performing, you’ve got to deal with it. Equally, if someone else in the organisation is having a go at one of your staff members, you’ve got to protect them, because they’re not in a position to do that themselves. You have to tell the other manager to back off, and you can deal with the individual concerned in your own time, even if it’s the CEO. You have to trust that your people are doing good work, but you also have to have their backs.
In summary, if you want to make the big bucks, then you’re going to take the big stress. There’s no easy way to make good money. And, you know, there’s no substitute for experience. It’s something that’s really valuable, and I think companies now recognise that. Securing a new part-time senior role at Genesis in my early sixties proves that!