Transparency on fees is vital – Siemens

Siemens expects its outside counsel to work with integrity and always be clear on the fees they are charging, says Fernando Ortega

When Fernando Ortega, General Counsel at Siemens in Spain, appoints outside counsel, he expects nothing but the best. “We always want the best lawyer and our top priority is which lawyer has the most integrity because when they work with us they are representing Siemens and they are our business partners,” he says. “We also consider quality and qualifications, clarity and conciseness. External firms must additionally always show that they carefully consider the impact of their legal advice on our business – they should also be clear on legal fees.”
Ortega has led the Spanish legal function – and served as Secretary of the Board of Directors – at Germany-based Siemens since 2011, following his move from the Spanish subsidiary of the Italian cement company Italcementi Group.
In his current role, he oversees the legal and compliance matters for the company and its subsidiaries throughout Spain. His seven-lawyer team is part of the wider legal and compliance department at Siemens, which is led by Andreas Christian Hoffmann, who was promoted to General Counsel at the start of this year.
Ortega explains that Siemens, both locally and globally, is organised into four sectors: industry, energy, healthcare, and infrastructure and cities – there are further divisions within each sector. “Our time is spread fairly evenly between the four sectors and corporate legal matters and this makes for very diverse coverage, meaning the in-house team works across a range of disparate matters,” he says.
As an indication of the scope, Siemens – which has worldwide revenues of €75.882bn and 360,000 employees – is involved in local matters including: developing the power transmission interconnection project between Spain and France across the Pyrenees; operating the lab at La Paz University Hospital in Madrid; the contract to maintain the Airbus plant in Illescas; and the contract from AENA, the Spanish airport authority, to renew the scanners that inspect hold baggage and integrate them into the automatic baggage handling systems at ten Spanish airports.

Different approaches
Ortega says that such a spread means different legal approaches are needed. In the case of infrastructure and cities, as well as healthcare, a major focus is on public procurement law because the customer base is principally public authorities. For the industry and energy sectors, private and commercial law and international contracts get the most attention because the customers are mainly in the private sector.
“One day we will be working on drawing up an international agreement for the provision of electrification or signalling solutions in the rail sector and the next day it will be dealing with an IT solution for the industry sector or maintenance and service contracts for the energy sector,” Ortega explains. “Even so, the emphasis of the in-house function is mainly commercial and corporate law.”
Indeed, Ortega prefers to keep the core commercial work within his team at Siemens. He says that because commercial matters are so important to the company, the in-house team must be very good commercial lawyers within their own right. This also helps to support Siemens’ board of directors.
Siemens, instead, prefers to outsource specific legal matters. Ortega cites three typical situations: specialist niche areas of law; litigation; and lack of capacity. “Areas like antitrust, environmental or criminal law are not our specialism so we prefer to call on external counsel,” he continues. “It is also not efficient to have the in-house team go to court either, and when we do not have the in-house capacity to handle a large matter, we will look to law firms for support and secondments.”
Regarding external counsel, Siemens has two legal panels – a global panel and a local Spanish panel. The legal team can appoint a firm from either panel, though Ortega prefers not to mention the names of the firms.
The legal team will be monitoring the new codes expected in both criminal and commercial law as well as possible alterations to the Companies Act during the course of the year.
“Siemens is a large company and we have to make sure we are aware of how changes in legislation and regulation may impact on the business,” Ortega summarises. “The new criminal code relates to the criminal responsibility of a company, so will require us to confirm if our compliance systems are aligned with new regulation. The commercial code and Companies Act will also have an impact on how businesses operate, although it is not clear what the changes will be yet.”

Fernando Ortega is General Counsel at Siemens in Spain.