Client profile: Paul van Reesch, Coca-Cola Enterprises

The soft drink giant’s top European lawyer talks about value and facing pressure from the sugar lobby.

As a young man six months into his European travels, Coca-Cola Enterprises (CCE) legal chief Paul van Reesch realised he literally had a cent to his name.

Fortunately he was offered a job as a temporary lawyer at CCE and never needed the funds to move back home to Australia. Now he’s worked for the soft drink giant’s UK manufacturing and distribution business for more than a decade.

Looking back on a career spent almost entirely in-house, van Reesch says the perception of the role has irrevocably changed for the better. He tells Legal Business: ‘Ten years ago you felt a bit isolated if you started on that journey.

But the belief that good lawyers didn’t work in-house started to change. Since then, those forging a career in-house are trying to and are succeeding to be business partners. In some ways there’s more respect for general counsel – we’re no longer the poor cousin.’

Since joining CCE – the marketer, producer and distributor of Coca-Cola products in western Europe – in 2004, van Reesch has held multiple roles at the NYSE-listed business, rising through the ranks from a stint as senior legal counsel for Europe in 2007 to vice president for legal in 2011, where he now oversees a 30-strong team. Work varies from operations to packaging, and supply and advertising, including major consumer-focused projects, such as the sponsoring of the London Eye.

‘The company has a long-running policy where its soft drink brands and the marketing behind it do not associate with children. We’re working hard to do the right thing.’

Van Reesch recently finalised a Europe-wide three-year plan for the legal function in October. Part of the plan is to conduct a strategic review of the legal function, but commencement has been pushed back by a major deal. In August, it was announced that three European bottlers would combine to form the world’s largest independent Coca-Cola bottler in a tripartite merger that included CCE, Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke. United, the new company will serve over 300 million consumers across 13 countries, with net revenues of $12.6bn. The new business has an estimated value of around €28bn. The merger is expected to close in the second quarter of 2016 subject to approvals.

Notably the CCE team takes a strong line on managing work in-house, with an above average 80% retention rate and only resourcing externally for complex, niche advice, such as competition law, or for a risk assessment of work the internal team has completed.

High up on van Reesch’s agenda is driving value for the business through greater management of external legal spend. Ranging between £500,000 to £1m, the budget is expected to tighten by 10% after van Reesch ‘deeply reviewed CCE’s external counsel offering for the first time this year’. Finalised in April, law firms on the revised UK panel include Ashurst, RPC, Lewis Silkin and Shoosmiths.

‘We won’t kill you on fees. That, combined with building relationships, means there’s lots of personal interaction between my team and external counsel. Everyone trusts each other.’

‘We tried to get a sense of how they’re thinking about our industry and the business,’ says van Reesch. ‘We’ve tried very hard to be open and honest about what we need. We won’t kill you on fees. That, combined with building relationships, means there’s lots of personal interaction between my team and external counsel. They know each other well; everyone trusts each other because they know we’ll be fair. We get this effective relationship and that translates on to the executive.’

And while the trend from general counsel (GCs) over the past five years has been to criticise private practice firms and attack their billing methods, van Reesch accepts there needs to be more acceptance of respective needs if both are clear on expectations. He comments: ‘We wanted the best fees they could offer, but not a race to the bottom. Rather than using 20 different firms and negotiating fixed fees 20 times, we have a couple we use and know what to expect. With billing guidelines set, we’re clear on what we will pay for and what we won’t, and how a piece of work should be resourced. Everyone is on the same page and we drive a lot of value through that.’

Notably, van Reesch also awarded civil and commercial set Devereux Chambers a spot as its preferred legal provider at the Bar, after inviting several sets to tender, in a bid ‘to drive value through direct access to the Bar’.

More than just delegators of work, there are plenty of issues for CCE’s in-house team to tackle. Recalling the most interesting work he has done, van Reesch cites the company’s high-profile $2bn acquisition in energy drink-maker Monster Beverage Corporation in 2014, in a deal to better ‘align each of their product portfolio and distribution abilities’. Other significant mandates include CCE buying The Coca-Cola Company’s bottling operations in Norway and Sweden, while gaining the right to buy the Swedish bottler’s stake in its German bottling operations, resulting in savings and additional revenue opportunities of $350m over four years.

The in-house team has further increased its efficiencies through several technology deals, including a sizeable agreement with Novatus under which repeat contracts, including sponsorship contracts, trading contracts and non-disclosure agreements, will be automated. The deal extended in the latter half of this year to provide customers with an online negotiation portal, enabling trackable changes to be made securely without the need for a chain of e-mails. Now, all of CCE’s contracts are to be loaded on to the system and made available online.

On the contentious side, the company has an uphill battle ahead in overhauling its image to increasingly health-conscious customers. In 2014, the amount of fizzy drinks Coca-Cola sold across the world fell for the first time in 15 years and that drop was particularly significant in much of the UK, with sales in Great Britain falling by more than 10%. In October this year, the beverage company reported a 5% decline in net revenue to $11.4bn for the third quarter.

But where fizzy drinks manufacturers have come under pressure from the medical profession and campaigners like chef Jamie Oliver to tackle the link between high sugar-content drinks and obesity, van Reesch says the company is actively engaged in addressing concerns. ‘This is where we face the greatest challenge in our industry, but we run a lot of initiatives around our portfolio and engage with stakeholders on that debate. There will always be a focus on how we engage our consumers, particularly those under 16. The company has a long-running policy where its soft drink brands and the marketing behind it do not associate with children. Our policy is not to talk to children – that is a conscious policy decision. We’re working hard to do the right thing.’

As for the team itself, van Reesch says the goal is to ensure it remains ‘at the top of its game’ through proper structuring, technology initiatives and the potential to resource day-to-day work to alternative providers to concentrate on more complex matters.

Van Reesch believes the in-house role has moved towards demonstrating real leadership skills and corporate-facing management. He says: ‘I hope the intersection of being a lawyer and an adviser continues to close. GCs are straddling a role that says: “I’m your lawyer, but I’ll also give you general advice, which goes beyond legal and commercial legal.” We want to be in place as a trusted close ear to the executive and the board via a wide range of methods. Chief executives will come to rely on GCs as people who will give them a sensible viewpoint when they’re mulling over strategic decisions.’

And, as the most seasoned GC will attest, van Reesch says the drive to be commercial shouldn’t be at the expense of influencing your ethical compass, which will inevitably remain an in-house lawyer’s most important tool. He concludes: ‘Perhaps I’m naïve, but good lawyers will understand success will only be if the business acts in the right way. Therefore, if you build up credibility and integrity, being the independent voice to the business, you will always be appreciated.’

sarah.downey@legalease.co.uk