As group general counsel at Barclays, Mark Harding is a powerful man about the City. The drama of the last two years has left his company in a strong position: Barclays declined the government’s offers of direct financial assistance, while Royal Bank of Scotland accepted a 70% taxpayer stake and Lloyds accepted a 43% taxpayer stake. Today, one Barclays share is worth around three and a half Lloyds shares, and around seven RBS shares.

Barclays’ failure to acquire ABN AMRO in 2007 turned out to be a blessing in disguise. The Dutch bank was acquired later that year by a consortium led by Sir Fred Goodwin’s Royal Bank of Scotland, but by 2009, the acquisition had cost RBS £20bn in goodwill writedowns – the fat end of the record £28bn in losses that RBS reported in January.

Barclays also weathered the storm by raising more than £5bn in October 2008 through the sale of a 32% stake to the Abu Dhabi royal family and two Qatari investors.

But the financial crisis hardly left Barclays unscathed. Harding says he has been at the coalface, advising the bank’s senior management on every major decision and on any potential fallout. To ease his workload, Harding created a new role of chief of staff, hiring Sue Brooks, formerly chief operating officer at Barclaycard Technology. Most importantly for law firms, she has taken responsibility for running Barclays’ mammoth panels.

But right now, peering out across the glass metropolis of Canary Wharf, one could be forgiven for thinking that little has changed. Standing outside Barclays’ 32-storey glass headquarters on a hazy summer afternoon, it is hard not to compare their solidity with the state of the once all-powerful Lehman Brothers.

In the lift up to the 29th floor, financial news flickers on a screen, below which is stuck a sheet of A4 paper displaying Barclays’ morning share price. Sharply dressed men and women carrying foolscap folders and Starbucks cups go quietly about their business.

We pass darkened, glass-fronted meeting rooms, filled with solemn faces, before sitting on brown leather couches in our own glass cube. Harding is not alone for this interview: Brooks sits next to me, while a press officer sits opposite, notebook at the ready. Harding reclines nonchalantly.

A Cambridge graduate, Harding says he knew from a ‘very early age’ that law was the right thing for him. However, academic study of the law came after a year reading French and German. ‘I got my year doing the fun thing, and then did the serious stuff,’ he says. ‘I was very interested in everything to do with the law: the ceremony of it, and the idea that the law is something that holds the fabric of society together.’

His three years at Cambridge were followed by law school in Guildford, then articles at Coward Chance in 1980. He recalls his first day at the firm: ‘I remember all of us – about a dozen trainees, or articled clerks as we were called then – being collectively carted around all the floors. Gradually, as we were introduced to the places we were going to sit, we peeled off, so the numbers got smaller and smaller. The group would leave somebody in a room with a senior lawyer or a partner, and as we walked off, our guide would occasionally say "ooh, bad luck mate".’

Harding landed in the firm’s conveyancing department with two senior solicitors. ‘One of the two went on holiday the day after I joined and just dumped all his files on me,’ he says. ‘I remember thinking at the time: what am I supposed to do with all of these?’ Despite the steep learning curve, he benefited from the responsibility: ‘It was a great way of learning very quickly.’

Seven years on from his first day at Coward Chance, Harding recalls a vivid memory: ‘On a Monday morning, I remember being called into a room by one of the senior partners [Nigel Fox Bassett, later senior partner at Clifford Chance, who died last year]. He said: "I have two pieces of news for you. Firstly, the firm has agreed to merge with Clifford Turner. Secondly, you’re going to be invited to become a partner of the firm when it merges." I was only 29.’

Nine years on from the merger, and after turning down several in-house job offers, Harding became UK general counsel of the Union Bank of Switzerland. A few months later he was Europe general counsel. When the Union Bank of Switzerland merged with the Swiss Bank Corporation to become UBS in 1998, he became group general counsel for the investment bank side. ‘After 10 years as a partner at Clifford Chance, I got to the stage where I was looking for a new challenge,’ he says. ‘I had to decide whether I wanted to get into a heavyweight management role at Clifford Chance or go in-house at UBS. The rest is history.’

But Harding did go back to Clifford Chance, in 2000. ‘Organisations change as they go through mergers, and sometimes you feel comfortable with it, and sometimes not,’ he says of UBS. ‘I knew by that point that being part of a business where you’re not in the headquarters was not what I wanted to do. I wasn’t at the heart of the decision-making process. I knew that if I was going to go in-house – which I knew by then that I infinitely preferred – then only a very rare in-house move would be possible.’

Harding says he spoke to Barclays Capital at the time, but decided against a move because the role wasn’t at company HQ. ‘I decided to go back into private practice because all the UK banking GC jobs were taken,’ he said. But after three years back at Clifford Chance, Barclays came knocking with that rarest of jobs. ‘It was too perfect not to explore,’ he says.

‘I’ve no doubt that I’ve done the Barclays job better than I did the UBS job,’ he adds. ‘This is partly down to maturing. Gaining the respect of the business people, [but] at the same time being able to saying "no" or "not that way", is a difficult balance. At a senior level, to be effective, you have to have well-honed skills.’

Rather than take government bail-out money, Barclays raised new capital. Harding says that he played a part in the capital raising, while also managing litigation risks, and driving some litigation – although he says he doesn’t see litigation as ‘the solution to anything’. He and his in-house team have been ‘as close to the front of developments as we’ve ever been’ – and he is called upon by John Varley, Barclays group CEO, to have his say in every major strategic decision: branching out into new countries, developing and closing down lines of business, reorganising the structure of the bank, or doing an acquisition or divestment, such as the sale of Barclays Global Investors, the bank’s investment management arm, to American investment management firm BlackRock.

‘I now have a much broader set of responsibilities than just legal,’ he says, pointing to his chairmanship of the bank’s group operating committee and the group governance control committee, which is the main oversight committee of the bank. ‘I’m very much involved in the day-to-day operation of the bank, but also the governance oversight of the risk. I do still practise law, but it’s a much, much broader management role now.’

With this mounting responsibility, a new face was necessary to ease the workload. Since the start of the year, Brooks has, in her own words, worked as a ‘catch-all’ in Barclays’ legal department, running the operational side of the general counsel role. Leading a special operations team, one of her key tasks is administering Barclays’ burdensome panel selection process – although Harding has the final say on which firms make the cut. He says in no uncertain terms that Barclays’ legal spend will be cut this year.

The bank runs a general advisory panel consisting of eight heavyweight commercial law firms. But, of course, with the bigger firms comes the prospect of more conflict problems. Harding says that the question is less about whether a conflict exists, and more about how the law firm manages conflict. ‘We’re very clear with all firms,’ he says. ‘If they go anywhere near a conflict and don’t talk to us about it, they’re in trouble. It has happened, although it’s usually an administrative cock-up. Law firms have to speak to us at the earliest opportunity. I tend to be fairly reasonable about conflicts, but we do expect a degree of loyalty from our major firms. If they decided of their own volition to put some other client first, then we’d be having a discussion.’

Apart from the general advisory panel, Barclays runs 11 specialist panels comprising some 103 seats for law firms, although many firms work across multiple panels. ‘The range of legal work the bank generates is much bigger than most corporates, hence we have specialist panels,’ says Harding. ‘We need panels to cover commercial banking business in Leeds, for example, so we’re not going to use the main panel firms there.’

Harding has asked all panel firms to ‘come up with innovative ideas about how we might get our lawyering done differently’. However, he declines to go into detail on his own ideas in this regard, saying that details are yet to be finalised. ‘There were quite a lot of ideas,’ he says. ‘Many are a variation on the theme of fixed pricing. If we’re looking at giving a whole line of routine business to one law firm, we ask: would we get a better deal out of them? As a law firm, you can predict fairly well the volume of work that you’re going to get over the year, so we ask them what that would do for pricing.’

For the panel selection this year, Harding has continued a diversity pilot he began in 2008, where he asked firms on the general advisory panel for information on their diversity policies. ‘If we’re going to make a difference, then we have to send a signal to law firms that we care about [diversity],’ he says. ‘We’re certainly not inclined to grow a relationship with a law firm that shows no interest in the subject. But actually, we’ve found the opposite – law firms are very interested.

‘You do small things, and hopefully over time they make a difference. But the root causes of the lack of diversity in banks, or indeed in law firms, are societal causes that have been present for a long, long time.’

Barclays is also rolling out a new e-billing system, which has to be integrated in all panel firms over the next six months. Harding says he wants to ensure he is capable of producing better management information, and is ‘only being charged for the things we’ve agreed to be charged for.’ He says the main purpose ‘is not to reduce legal spend,’ but admits that such a system ‘does have that effect because it keeps law firms on their toes about what they do and don’t bill’. On the upside, law firms should get paid more quickly. ‘The purpose is to create better information for us and improve efficiency,’ he says. ‘It will also enable us to identify whether there are particular types of repeat work that we can handle in a different way – either in-house, or outsourced.’

Harding has already piloted a number of outsourcing projects, including one in New Zealand – although he says that this particular pilot ‘hasn’t developed hugely’ because of a lack of commercial contract work in recent months. In any case, he says outsourcing has not sparked a revolution in lawyering at Barclays. Brooks adds that, in a number of instances, Barclays’ in-house team in London has done work that may have been outsourced at a lower cost.

‘We haven’t decided definitively what the right model is for us,’ says Harding. ‘The bigger prize of outsourcing is the standardisation of documentation, which we’ve gone in for big time, because you don’t need a lawyer involved at all. If you’ve set the templates up right, you’ve got electronic version control and all that, then it’s ultimately a better solution because you eliminate the legal cost.’

Despite an ever-increasing workload, Harding maintains an active role in the GC100, which represents the interests of general counsel and company secretaries at FTSE 100 companies. The GC100 unsuccessfully applied to intervene in the long-running Akzo Nobel case, where the European Court of First Instance held that, in cartel investigations, legal professional privilege does not extend to communications between in-house lawyers and other company staff. Harding, who sits on the GC100 executive committee, says it will continue to fight on because the issue is ‘very important’. He says the GC100 will support interventions by the European Company Lawyers Association and American Corporate Counsel Association, as well as the Council of Bars and Law Societies of Europe and International Bar Association.

Most corporate general counsel acknowledge their roles are changing: they can no longer act as private practice lawyers in a business, because their businesses require them to be business people. In using the freedom that Barclays has always given him, and by bringing in a chief of staff to take over the day-to-day aspects of his role, Harding has carved out just enough space to make this difficult crossover.