Legal Business

Q&A: Heineken UK’s Graeme Colquhoun and DLA Piper’s John McKinlay talk sole adviser mandates

legal-business-default

Having appointed DLA Piper as principal legal adviser this month (January) in a bid to cut down on external spend, Heineken UK’s head of legal Graeme Colquhoun (pictured) and DLA Piper IP/IT partner John McKinlay talk to Sarah Downey to discuss the perks of having a one-stop-shop and its possible extension.

Graeme, what did the review entail?

We started internally getting our ducks in a row around April. Senior commercial lawyer Lynsey Nicoll did the main bulk of the work. I was the architect and she was the builder. At the end, six firms were invited to pitch and five ended up pitching – one was conflicted. But we got procurement advice internally and spent a lot of time defining exactly what it was we were doing. I spoke to other legal heads in drinks companies. Our tender document was 20 pages; it had lots of KPIs and specifications – we did it in a slightly fuller on way than most do.

It was much more work than I would have ever believed. I was really conscious that I wanted to give everyone as much information as I could to allow them to put their best foot forward. You try to be honest about the challenges and opportunities. People responded to that. The issue was, it took so much time to get the information together at our end and then speak to all the different firms. That was one of the key learning points for us – to not underestimate how much time it takes. With a multi-faceted business you’re trying to find out where the touch points are between the external lawyers and my colleagues. We ended up finding out a lot more about our business than we knew at the start.

What did you want to achieve besides cost efficiency?

GC: We wanted a long term relationship rather than a transactional one with our lawyers. I want to see synergies, and the knowledge that we give in one instruction to be applied on others. For instance, I had a meeting with DLA’s property lawyers and talking about how what they’ve learned on say legislation issues, can be applied to our leasing issues on a day-to-day basis. We can better share that knowledge now.

JM: What attracts us is being able to take the holistic view of the client relationships you’re freed up from billing on a project by project basis. It’s just a more natural and comfortable way of working.

Graeme, what cost savings are you expecting to make?

I would say for three years, using our historic numbers, we will save a seven-figure sum – not a tiny seven figure sum. It’s a material sum.

John, what has been your relationship with Heineken?

Graeme and I used to work together at legacy McGrigors – we’ve known each other for 15 years. DLA Piper also did a lot of work for Scottish & Newcastle (now Heineken) and then laterally as one of a number of advisors for Heineken as well. It’s been an ongoing relationship.

How many at DLA will be involved in managing this relationship?

JM: There’s a small core team made up of myself and litigation partner Hazel Moffatt who will provide the central management role, plus the department heads in the larger work streams such as real estate and litigation to speak to the client very regularly. That will span out to individual people. At the moment we identify a team of 30 people that will be involved in doing this. That will expand and contract depending on the flow of work over the course of the three year appointment.

Can this mandate be rolled out across other jurisdictions where Heineken operates?

GC: This agreement is an obvious thing for Heineken UK to do – we do a lot of commoditised work which allows us to go to law firms with the proposition of guaranteed work. Other Heineken companies may not have that churn of work. I expect, however, this arrangement will become more popular. You can be sure every head of legal for every company across the land is being given the same challenges about managing external cost and getting value for money. We will see a lot more.

What are your key objectives going forward?

GC: Obviously we want to see this work and manage that closely – this will be successful if DLA win it next time. Having a law firm that is actually proactive and feels really part of the team…it was the distance that I felt sometimes between us and the advisers. It shouldn’t have been like that.

sarah.downey@legalease.co.uk

Legal Business

Profile: Graeme Colquhoun, Heineken UK

legal-business-default

Global brewer’s UK head of legal on his no-nonsense approach

It’s a terrible cliché to invoke the plain-speaking Scot, but Heineken’s UK head of legal Graeme Colquhoun does rather fit the bill. The intellectual property (IP) and antitrust specialist turned in-house counsel is certainly candid about his strengths and how a legal team in a major global company should operate.

‘My skills are broad but shallow. I am much better qualified to be the lawyer for a corporate than provide corporate/property/litigation advice in a law firm. I’m direct – I don’t like to flannel around the issue.’

Legal Business

Heineken UK in talks to appoint sole legal adviser

legal-business-default

The UK arm of global cider and beer producer Heineken is actively considering going down the one-stop-shop route for the bulk of its legal work, appointing a sole legal adviser in a bid to cut down its external legal spend.

Heineken’s company secretary and UK head of legal Graeme Colquhoun anticipates that one of the firms with which the brewer already has a relationship would be best placed to serve in the role, meaning that firms including Freshfields Bruckhaus Deringer, Allen & Overy, Shepherd and Wedderburn, TLT Solicitors, Morton Fraser, Irwin Mitchell, Osborne Clarke, CMS Cameron McKenna and Pinsent Masons could all be in line for the windfall instruction.

While Heineken does not currently operate a formal panel and tends to keep much of its commercial and procurement work in-house, key relationship partners to Heineken include Freshfields corporate partner Sundeep Kapila, who previously advised brewer Scottish & Newcastle (now Heineken) on the £7.6bn takeover offer by Heineken and Carlsberg, as well as Heineken’s 2011 acquisition of the Galaxy pub estate from The Royal Bank of Scotland for over £400m.

Equally, longstanding adviser Shepherd and Wedderburn has previously acted for the former Scottish & Newcastle over competition matters, including obtaining European Commission clearance for its distribution joint venture with Kuehne + Nagel. The Scots firm also provided Heineken UK with advice on high-value debt recovery, insolvency and guarantee enforcement matters in Scotland.

Colquhoun has previously gone on record to praise the firm, stating: ‘The firm is our first port of call for corporate transactions in the UK and we have an excellent relationship.’

A sole supplier appointment would cover Heineken’s UK conveyancing, licensing, debt recovery, property and litigation work, with corporate deals appointed ad hoc, although in the expectation that the sole supplier would be in pole position.

Speaking to Legal Business, Colquhoun said: ‘Given the strategic importance of the role, it’s hard to imagine going with a firm that we didn’t already know very well. We haven’t yet decided whether to go down this route, but would expect to make a decision over the next few months.’

The single-supplier advisory model has gained modest traction in the market since 2006, when Eversheds announced its market-leading, annual fixed-fee retainer with Tyco International.

However, March this year saw Eversheds win its largest-ever primary services provider contract with the International Air Transport Association (IATA) across 158 countries.

Other high-profile recent examples include Pinsent Masons’ second exclusive fixed-fee contract with energy giant E.ON, which last year appointed the top 20 UK firm as sole legal adviser for general matters.

Other similar deals to have been forged include Baker & McKenzie’s three-year contract with Unilever in 2007 to service its global trade mark and IT work for £10m a year. Bakers then went on to sign an open-ended £10m-plus a year deal with Carlsberg in December 2010 for corporate, commercial and disputes work, followed by a £3m three-year contract with Colt in Europe in January 2012.

Colquhoun added: ‘Our business is very fragmented and distributed – there’s lots of touch points between the business and external firms. Cost is a huge issue and so is control.

‘From Edinburgh it’s quite hard to get a grip on that other than through our system where we can see how much money is being paid but we can’t stop it before it happens. We think we might have better control through having a sole supplier – a one-stop-shop.’

sarah.downey@legalease.co.uk

Legal Business

Heineken UK in talks to appoint sole legal adviser

legal-business-default

The UK arm of global cider and beer producer Heineken is actively considering going down the one-stop-shop route for the bulk of its legal work, appointing a sole legal adviser in a bid to cut down its external legal spend.

Heineken’s company secretary and UK head of legal Graeme Colquhoun anticipates that one of the firms with which the brewer already has a relationship would be best placed to serve in the role, meaning that firms including Freshfields Bruckhaus Deringer, Allen & Overy, Shepherd and Wedderburn, TLT Solicitors, Morton Fraser, Irwin Mitchell, Osborne Clarke, CMS Cameron McKenna and Pinsent Masons could all be in line for the windfall instruction.