Everybody likes a bargain and Simon Tuxen, group general counsel at Westfield Group, is no different when it comes to legal services, reports Olivia Collings

Westfield. It’s a brand synonymous with shopping, Australia and the Lowy family. From humble beginnings in western Sydney the Westfield Group has grown into a multinational organisation worth more than A$59 billion.

Late last year the organisation proved yet again how shrewd it is, breaking up the group to create a separate retail trust on the ASX. Leading the legal aspects of the project was group general counsel Simon Tuxen. “It was a very complex, intensive process,” recalls Tuxen, a lawyer with more than 25
years experience. What started as an idea at the start of 2010 became the Westfield Retail Trust WRT) worth A$12 billion by December 23. “It was very intellectually difficult for six months, coming up with an acceptable structure,” he says. “The last six months were the slog, coming up with all the documents, establishing a new board, briefing them, getting licences, it was never ending.”

The Westfield Retail Trust now owns 54 of the Westfield Group properties across Australia and New Zealand and according to chairman Frank Lowy, creates a geographic and asset specific investment vehicle that provides investors the opportunity to partner with Westfield Group in the ownership of retail real estate in Australia and New Zealand.

“The group is always very active on a capital management front; they are always looking at optimising the capital structure of the group, to make sure that it is the best we can achieve for the shareholders,” says Tuxen of the move. Indeed, in 2004 Westfield merged separate trusts into one to form the Westfield Group and by 2010 it was taking them apart and creating a new entity. This, says Tuxen, is one of the exciting aspects of working for the group, along with its extensive international portfolio. “The part that people don’t realise is just how international we are – the size of our business in the United States, our offshore business is just as big as our Australian business, if not bigger,” says Tuxen.

And it’s getting bigger. Just last month the group announced a foray into two new markets, Italy and Brazil, adding onto interests in the U.S., UK and New Zealand. “The constant scouring of the world for opportunities creates enormous interest, but challenges as well,” says Tuxen. “We make very large capital investments in the centres, so we are very conservative with our capital because shopping centres are not mobile.” A majority of the overseas business is in the United States, but more recently Westfield has developed the largest shopping centre in Europe, Westfield Stratford, near the 2012 Olympic site in London set for completion later this year.

Preparing for Westfield

Like many general counsels, Tuxen has had a career rich in corporate work and international experiences. He began his career at Mallesons Stephen Jaques as a finance lawyer, and spent more than 10 years at the firm including five years as a partner. At the end of 1992 he decided it was time to do something different and took on a secondment role in at the Jardine Matheson Group in Hong Kong. He went on secondment on the understanding that afterward he would join the Mallesons Hong Kong office, but he enjoyed his secondment so much, he stayed. “I called Tony D'Aloisio the managing partner at the time and said ‘I don’t think I will be coming back’,” recalls Tuxen.

When asked what appealed to him about staying in-house Tuxen jokes “a lack of time sheets”, but he concedes it’s much deeper than that. “Being in the thick of things, having a true involvement in the corporate objectives, it’s very different from the detachment you have to have as an external lawyer,” he states.

The diversity of an in-house role also appealed to Tuxen, who even during his time in private practice
jumped from IP to tax to banking and finance and a variety of other practice areas. “Law firms and practices are evolving; people are becoming more and more specialised. I think your real opportunity to be a generalist is in in-house,” he says.

Tuxen’s current role is definitely diverse. Along with capital restructures, Westfield regularly undertakes new projects, redevelopments, purchases and joint ventures. But despite all of this he
likes to have a close involvement to the deals being undertaken– wherever that might be. “I like to have a very close involvement on the major transactions the group is doing, as a lawyer,” says Tuxen. “I see that as part of what I bring to the company.”

His role also requires him to oversee the team of plus 35 lawyers spread across Australia, the UK and
United States. “We run comparatively small teams in each country but we staff them with senior people. The expectation is that the lawyers we have in-house are of partner quality and senior enough to be able to contribute significantly on the transactions they are working on,” he says.

While some of the more standardised work the company requires, such as 20,000 plus leasing agreements, is outsourced Tuxen expects his team to be on top of all strategic legal work. “Our philosophy is never to just bundle things up and give them to external lawyers,” he says. “The expectation is that whenever something needs to be explained, whether to senior management or the board, either I or someone in the team will be able to explain it. Not an external lawyer.”

As general counsel Tuxen also sees it as his role to have input on regulatory changes that will affect the company. “General counsels in Australia really need to play an active role in not only briefing people on the legislation being produced, but being more active in making sure governments hear the views of major corporations before legislation is introduced,” he explains. With regards to the mining tax and carbon tax Tuxen says companies have had success in influencing legislation but less so in the areas of remuneration reform and tax reform.

“We got very little notice on those. The last round of remuneration reforms, we were given only three weeks over Christmas,” he says. “I think maybe general counsels could do more to make themselves heard.”

Shopping around

As with any general counsel, it’s also important for Tuxen to manage the relationships and allocation of legal work to external law firms and lawyers. There is no set legal panel in any of the jurisdictions and work is generally allocated to firms or individuals with whom the company has a long relationship. “We are very loyal to the people that have worked with the group for a long time, but we are a very demanding client,” he states.

While Mallesons were the lead lawyers on the WRT restructure, Tuxen insists work is not limited to the big end of town. “We have tremendous relationships with big and small firms, and individuals in firms, who have earned our trust and respect,” he says.

In fact, as with the retail trust, Tuxen says he will regularly use a variety of individuals from across the country to complete projects for him. “It [WRT] was a great example of how we like to work with our firms and a great opportunity to deal with many firms at the same time,” he adds. Other firms included HWL Ebsworth, Russell McVeagh, Grenwoods & Freehills, Gilbert + Tobin and Watts Legal Consultants.

“Tom Watts is highly regarded by the company, he’s a specialist in the M&A property work, and it’s a one partner firm,” explains Tuxen. However, it’s not all bad news for firms not yet on the Westfield books. “Because some of our relationships are based on individuals, they sometimes move on - that creates opportunities for others,” says Tuxen. If someone shines in their field Tuxen is equally open minded, because, at the end of the day he wants the best people doing the work. “We want work that is going to deliver a cost efficient high quality service to the group,” says Tuxen. “It’s not just hourly rates; it’s very much about the service we get, the problem solving abilities, the creativity.”

Despite being an increasingly global company, Tuxen says he is unmotivated to shift work to the
growing number of international firms in the market. “We are confident enough in the relationships we have to not think that the international one-stop-shop is really what we need. We do a lot of research when we go into a new market to find the right firms to deliver the expertise we want,” says Tuxen. “That’s not to say that the international firms would not be good, but rather, that we would look at those firms at a market by market basis.”

What next?

In recent months the global economy has been turbulent to say the least and a high Australian dollar is having a significant impact on the local retail sector. Yet, despite all of the current market issues, the Westfield Group pushes on, investing, buying and building in new centres across the world. “The big challenge is for the company is to continue to take risks,” says Tuxen. “We are conservative when market conditions demand it, but as we showed when we developed and opened Westfield London and Westfield Sydney, in pretty poor times, we are prepared to take a long view and say: ‘we believe in the projects we are doing that what we are doing is the long term best interest of the group.” 

With someone like Tuxen to guide them along, it’s no wonder Westfield can make spending money look so good. ALB