Lace will take over the seat left vacant by Smith, who was ousted from his post after just a year in the job, which someone close to the agency described as a "poisoned chalice".
Smith was seen as being hired in a hurry to replace Steve Blamer, who returned to the US to run the network's flagship New York office. This time, with the search weighing in at almost 18 months, the agency has taken its time.
Lace joins Grey after four-and-a-half years at TBWA. He joined what was TBWA Simons Palmer in April 1998 from Euro RSCG Wnek Gosper to become the agency's new head of account management.
He was appointed as joint managing director alongside Johnny Hornby in March 2000, before ascending to the chief executive's role last May at the same time that Trevor Beattie was promoted to chairman of TBWA\London.
Lace has been appointed by Carolyn Carter, president of Grey Worldwide Europe, the Middle East and Africa, and John Shannon, president of Grey International, who led the search to replace Smith.
His appointment follows a number of senior UK hirings at Grey. Richard Bagnall-Smith, the former Wunderman Cato Johnson managing director, joined to fill a newly created role spearheading the network's pan-European new-business drive and Paul Lawson, the former WCRS client services director, joined as a managing partner with responsibility for running the Crookes Healthcare Clearasil account globally.
While Grey has done well internationally of late, winning accounts such as Cisco's $60m (£39m) global business and DoubleClick's $25m ad account, as well as Volkswagen in China and, importantly, more work from Mars following D'Arcy's dismissal, its performance in the UK has been less impressive. The agency has failed to broaden its client base, which is made up largely of staid multinationals such as Mars, Procter & Gamble and GlaxoSmithKline.
While Grey has not been losing much UK business, it is not seen as a dynamic London agency. Lace joins from a highly successful and creative agency, whose creative work on PlayStation2, Holsten Pils, French Connection, New Labour and Nissan is among the UK's most talked about.
Lace will be well aware that his brief is almost identical to that given to Smith two and half years ago, when Campaign reported that "he was hired to boost the agency's creative product and its profile". One year on, having failed to do so, the former Bartle Bogle Hegarty deputy chairman left abruptly.
Lace joins Grey from a similar kind of agency to the one Smith came from. Grey must be hoping second time lucky in what has proved an unfortunate long run without a leader at the UK agency.
Key to Lace's success will be establishing a rapport with Tim Mellors, Grey's chairman, chief creative office and managing partner. A poor relationship between Mellors and Smith was cited as one of the reasons for his speedy departure. Mellors was sure to have been involved in the search for the new chief executive.
Prior to TBWA, Lace spent three years at Euro RSCG. He started his career as a graduate trainee at Saatchi & Saatchi, where he worked on Castlemaine XXXX. From there, he went to Young & Rubicam for 18 months. He then joined Abbott Mead Vickers BBDO to work on Cellnet and Pizza Hut, also for 18 months.
Both Grey and Lace refused to confirm or deny reports of his move to the agency.
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