When Snam's management laid out ambitious plans to become a leading gas enterprise, general counsel Marco Reggiani knew he had to transform the company's legal department to meet the challenges ahead. The GC talks to E Leigh Dance about the dramatic changes he implemented

In 2012 Italy's domestic natural gas market leader, Snam, became a public company independent from Eni, its parent company. A new regulatory structure that took effect the same year opened the door for Snam to compete in new markets, and corporate leadership embarked on a bold strategy to become a leading pan-European gas hub. 

Marco Reggiani, general counsel of Snam, recognised that the legal team was not ready for the new demands that lay ahead. He saw dramatic change as the only means to ensure that Snam's in-house legal function could effectively support the business' growth strategy and future needs. After bringing executive leadership on board with his vision, in late 2012 Snam's legal, compliance and corporate affairs department embarked on a journey that Harvard Business gurus call 'disruptive innovation' and others may refer to as 'transformation'.  

"To align with the requirements of Snam's business, it was clear that our legal, compliance and corporate affairs function needed to do more than make improvements here and there. We needed to change fundamentally on many levels," says Reggiani. "This is not a project. It permeates our culture – it touches everything about how we think and what we do, every day." 

Reggiani and his team call this journey Road to Excellence. By any measure it is a rigorous process, with short, mid and long-term goals and regular reporting on qualitative and quantitative measures. The intent is to change both the approach and skills of the department with the help of every person in the legal function, as well as Snam's leaders and internal business clients. External providers including law firms are also involved. 

In short, Snam wants to be one of the best legal departments in Europe – with the company believing that legal and compliance excellence will be an important asset to it as it grows. "We're partly there and it won't be a short trip," Reggiani adds. "We're taking a giant leap forward to become vital to the business, and to remain vital in the future."

A fired-up team

When I met Snam's legal, compliance and corporate affairs leadership team, what immediately stood out was the individuals' energy, not to mention their young average age. I asked compliance head Rozemaria Bala how she described Reggiani's leadership. "It is the way he shares the responsibility with all of us, and counts on us," she explains. "Individually and as a group, we know it is up to us to make this happen. We wouldn't be here if we didn't accept the goals and the hard work." 

Reggiani is convinced that a strong, empowered and accountable leadership team is fundamental to succeed. "I couldn't go far without it," he says. "We also focus a lot on young talent, encouraging progress by creating opportunities for visibility and rewards. They are the present and more importantly the future of Snam, and we must create the conditions for them to grow and learn."

The disruptive innovation at Snam began with a detailed look at what needed to change in terms of in-house lawyers' skills, services and processes, as well as compliance capability and methods. The review involved input from legal team members as well as from internal business clients and Snam's top management. "It is essential for internal clients and collaborators to feel confident and to see motivation as we go through this change," says Reggiani.

The legal team engaged Boston Consulting Group (BCG) to help in this transformation: a long-term assignment to bring in new ideas from other industries and help with best practices and implementation structure. BCG began by working with the in-house team to understand how internal clients and peers rated their satisfaction with Snam legal services and the team's ability to meet business requirements. 

After this 'deep dive' was completed, Snam designed an approach to reach specific objectives in the legal team's three areas of responsibility: legal affairs, corporate affairs and compliance. The design is a matrix of these three areas with five key components on the Road to Excellence: organisational design; people and behaviours; processes; systems and tools; and vendors and sourcing.  

Prepare for an intense journey 

The change management plan doesn't rely on a single initiative, such as reducing external costs or improving compliance methods. Like many legal departments, there is effort and progress on a number of fronts at one time. What is distinctive in the Snam transformation is its intensity. The various areas and components involved in the process are overlapping and integrated. Organisation and reporting take significantly more time, but the pay-off seems to be the broad buy-in and motivation achieved. 

Everyone in the in-house function participates in designated working groups that set targets and identify ways to track their various efforts. Above and beyond the many initiatives is the ever-present objective to be seen by internal clients as true partners to realise their business goals. It is a stress test that is repeatedly used: if a behaviour, process, structure or system does not support that objective, it is questioned. "I'd like our people to stop thinking like lawyers," Reggiani says with a smile. 

"Sometimes it is a struggle," adds Snam in-house lawyer Bruno Clerico Titinet. "But there is really no alternative. With all the change in the business and the markets, we simply could not continue as we were before. We knew we had to change too."  

Excellent lawyers are not enough

Reggiani explains that to be able to deal with a highly complex industry environment in different geographies, team members need new capabilities: to be excellent managers who can face a multitude of issues; to skillfully handle relationships with numerous external parties; and to act as ethical role models inside and outside the company. "We want internal clients to call on us to be an active partner in all stages of business development," he says.

The Road to Excellence project itself often pushes those accustomed to the typical corporate counsel role outside their comfort zones, which Reggiani believes is great preparation for the future. The project demands involve building new skills, using new reporting processes, asking more questions to better understand client requirements and moving out of silos to collaborate better among lawyers and staff.  

Early results of disruptive innovation 

Reggiani reports tangible results in 2013 including: 

• a new organisation structure designed to bring legal and compliance closer to the business; 
• a more coherent and practical set of internal processes to guide the Snam legal and compliance team's daily work (collected in a handbook); 
• several new hires bringing new skill sets, experience and ideas;
• a new vendor management system for the legal function to select, rate and provide feedback to suppliers;
• the implementation of a 360